The Nigerian Content Development and Monitoring Board (NCDMB) and the Bank of Industry (BOI) on Thursday signed a Memorandum of Understanding (MoU) for the implementation of a $200 million (about N61bn) funds accessible by qualified indigenous oil and gas companies.
The fund which is to be lent to the companies under the Nigerian Content Intervention Fund (NCI Fund) to be managed by NCDMB will be disbursed directly by the BOI at single digit interest rate and repaid within five years.
The goal of the facility is to address funding and capacity challenges faced by local oil and gas players in Nigeria.
Speaking at the launch of the fund to commence its implementation, Minister of state for petroleum Resources Dr. Ibe Kachikwu said his ultimate target is for the fund to hit $1 billion soon.
He said that his expectation for the fund is that it must be geographically spread, disbursed to cutting edge innovations and cut across all the sectors in the industry.
Whereas there were various intervention funds for other critical sectors of the economy like agriculture, aviation, mining and others, there was none for the oil and gas sector before now.
The NCDMB and BOI launched the NCI Fund in July 2016 with $100m but it suffered delayed implementation.
The NCI Fund is sourced from the statutory NCDF which is funded from one percent that is deducted from the value of all upstream contracts.
The NCDF is underpinned by Section 104 of the Nigerian Oil and Gas Industry Content Development (NOGICD) Act, which provides that the funds be used for developing capacity in the oil and gas industry.