The Nigerian Content Development Fund has grown to $350m and is now being accessed by Nigerian service companies, the Executive Secretary, Nigerian Content Development and Monitoring Board, Mr. Ernest Nwapa, said in a statement on Wednesday.
Nwapa, who was quoted as saying this at the 2013 Practical Nigerian Content Workshop in Yenagoa, Bayelsa State, called on more indigenous firms to take advantage of the fund.
He confirmed that the fund had been accessed successfully by two Nigerian service companies, while some other companies are at various stages of processing their applications.
Nwapa said the board was working with the fund managers (BGL) to fine-tune the conditions to be met for prospective beneficiary companies so as to make it more accessible.
“We are not satisfied with the level of access to the fund and we are working to review the administration process,” he said.
He, however, clarified that the delays emanated mostly from the processes in the banks and how the companies packaged their proposals.
He explained that some conditions were introduced to ensure that beneficiaries were serious service companies, who had bankable plans.
Nwapa said the board decidedly appointed a fund manager and constituted an advisory committee, which comprises representatives of international oil companies, Petroleum Technology Association of Nigeria, Oil and Gas Trainers Association of Nigeria and Bank of Industry, in an effort to create a structured and transparent process for accessing the fund.
According to him, the current conditions require the benefitting company to make an arrangement with its bank for a facility meant for financing the acquisition of assets and ensure that it draws down the loan and services successfully.
“The fund will then kick in to offset 50 per cent of the interest charged by the bank,” he said.
The Nigerian Content Fund was established by the Nigerian Content Act and is pooled from one per cent of all contracts awarded in the upstream sector of the oil and gas industry for use in developing the supply chain and building local capacity in the industry.
Seventy per cent of the pool, according to Nwapa, is to be used to provide guarantees for single-digit and longer-tenure lending by banks and funding institutions to Nigerian service companies seeking to acquire critical assets.
“Thirty per cent will be applied for direct intervention by the board in critical infrastructure development and training programmes,” he said.
The Contracting and Procurement Global Local Content Manager, Shell Exploration and Production International Ltd, Mr. Simbi Wabote, advised the board to publicise the procedures and requirements for accessing the NCDF and use feedback from the exercise to improve the administration process.
He counselled against letting the NCDF go the way of the moribund Nigerian Content Support Fund, which could not be accessed by any service company.
Towards ensuring compliance by service companies, Wabote said the board needed to revamp its monitoring process, noting that the Nigerian Content Act did not allow for non-compliance by local service companies.
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