The Nigerian Content Development and Monitoring Board (NCDMB) and the Bank of Industry (BOI) have launched a $50-million fund for the Nigerian Oil and Gas Parks (NOGAPs) manufacturing product line.
The fund, according to a Press Release issued yesterday, Thursday, March 9, 2023, by the NCDMB, was to incentivise companies that would operate in the NOGAPs and engage in the manufacturing of equipment components used in the oil and gas industry and linkage sectors.
Speaking at the signing ceremony in Lagos, the Executive Secretary of NCDMB, Mr. Simbi Wabote, said the fund would support oil and gas companies that would operate in the oil and gas parks developed by the board in Bayelsa and Cross River States.
Wabote reiterated that the fund would only be accessed by companies that take up spaces in the park to procure equipment or build their manufacturing shopfloor within the park.
He pointed out that the NOGAPs manufacturing fund was different from the initial $300 million fund being managed by BOI with five product lines, which aims at supporting Nigerian businesses that contribute their one percent to the Nigerian Content Development Fund.
He said the new fund would be a stand-alone product line with distinct fund allocation and special eligibility criteria and collateral structure.
According to Wabote, “the decision of the Board to establish the product was informed by the peculiarities of the manufacturing sector, which include infrastructure challenges, long gestation, long lead time before returns, low margins on products, and high risk attached to the endeavor, in addition to the reluctance of commercial banks to lend to the sector and application of stiff collateral and eligibility criteria where loans are extended.”
On the criteria for accessing the NOGAPS manufacturing funds, the Executive Secretary hinted that unlike the Nigerian Content Intervention Funds which require companies to be contributors before they could benefit, the NOGAPS fund could be accessed by companies that would be domiciled and manufacture their products within the parks.
