The Nigerian Content Development and Monitoring Board (NCDMB) has unveiled plan to launch a $50 million fund for the Nigerian Oil and Gas Parks Scheme (NOGAPS) product manufacturing line.
The parks, which would be commissioned and operational and made operational in the 4th quarter of 2022, is designed to support oil and gas firms that would operate in the oil and gas parks to be established by the board in Bayelsa and Cross River states.
Dropping the hint about the parks while speaking at a valves assembling facility in Port Harcourt, Rivers state, NCMBD executive secretary, Engr Simbi Wabote said the proposed parks would incubate the manufacturing of equipment components utilized in the oil and gas industry and create an estimated 2000 jobs in each park.
He said the NCDMB understands the challenge associated with manufacturing, especially the reluctance of banks to extend loans to manufacturers, because of the long repayment period for such facilities.
According to him the NOGAPS Manufacturing Fund will soon be launched and will be managed by the Bank of Industry (BoI) to address the identified challenges. “The new fund would be a stand-alone product line with distinct fund allocation and special eligibility criteria and collateral structure.
“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 endeavour, 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”, he said.
He disclosed that the valve assembly plant now possesses the capacity to handle shut-off and control valve testing, test pressure safety bunker operations, valve assembling, and disassembling.
He called on the other service companies to emulate the company to invest in manufacturing and promote the development of services that will benefit the Nigerian economy.
Chairman of the company, Dr. Okey Ukaegbu, appreciated the support he had received from the industry through the implementation of the Nigerian Oil and Gas Industry Content Development Act 2010.
With the new valve assembling plant, the company, he said, will be able to serve other sectors of the economy. “The plant is a great opportunity to showcase a Nigeria company’s capacity and we are poised to continue to meet the industry needs and demands with timely delivery and at the right cost,” Ukaegbu said.
The Board established the NCI Fund in 2018 with the purpose of financing Oil and Gas companies to increase capacity and grow Nigerian content in the industry. Presently, the NCI Fund has five product lines that are being managed by the Bank of Industry.
They include – Manufacturing Finance -$10m; Asset Acquisition Finance -$10m; Contract Finance -$5m; Loan Refinance -$10m and Community Contractor Finance – N20 million. The Board also has a $30 million Working Capital Fund for oil and gas service companies and $20m Fund for Women in Oil and Gas Intervention Fund. Both facilities are administered by the Nexim Nigerian Export-Import Bank and the agreements were signed in mid-2021.
The ES stressed that the manufacturing sector is central to the overall initiative of the federal government and NCDMB to develop the economy and create indigenous capacity in the supply chain.
By Chibisi Ohakah, Abuja
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