Posted by Paul Carsten | 25 August 2017 | 1,660 times
Nigeria launched the Nigerian Content Development Fund (NCDF) on Thursday with an initial value of $200 million to support local oil and gas firms. According to the Ministry of Petroleum Resources, the fund is part of a government drive to improve access to low-cost credit across the economy.
The Ministry explained that the fund would be financed through allocating to it one percent of the value of all contracts awarded in the upstream oil and gas industry.
Oil sales make up about two-thirds of national revenues in Nigeria, which is in its first recession in 25 years largely caused by low global crude prices.
The new fund would offer finance to energy firms setting up manufacturing facilities or acquiring assets such as oil rigs, Ministry officials said. It would also offer project financing and help refinance existing loans, they said.
“I would like to see this fund going to cutting edge, tech-driven businesses,” Minister of State for Petroleum, Emmanuel Kachikwu said at an event to launch the fund in Abuja .
The goal was to increase the size of the fund to $1 billion, he said, without giving a timeframe.
Firms would be able to borrow up to $10 million for a single project or investment at single digit interest rates over five years, officials said. Typically, a commercial bank would charge double digit interest rates in Nigeria.
The Nigerian Content Development and Monitoring Board (NCDMB) would manage the fund alongside the state-run Bank of Industry, officials said. (Reuters)
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