Log in
E-mail
Password
Remember
Forgot password ?
Become a member for free
Sign up
Sign up
Settings
Settings
Dynamic quotes 
OFFON

4-Traders Homepage  >  News

News

Latest NewsCompaniesMarketsEconomy & ForexCommoditiesInterest RatesHot NewsMost Read NewsRecomm.Business LeadersCalendar 

$600m NCDF: Why only 2 local firms benefitted in 6 years

share with twitter share with LinkedIn share with facebook
share via e-mail
0
02/13/2017 | 05:45am CEST

Stories byAdewale Sanyaolu

Except stiffer sanctions are meted out to defaulters of the one per cent statutory remittance for oil and gas contracts executed in the upstream sector, the gains of the Nigerian Oil and Gas Industry Content Development (NOGICD) Act of 2010 would continue being eroded.

The (NOGICD) Act of 2010 gives the Nigerian Content Development and Monitoring Board (NCDMB) the mandate to manage the Nigerian Content Development Fund (NCDF) and deploy it for projects, programmes and activities directed at increasing Nigerian content in the oil and gas industry.

The Act equally provides that one per cent of every contract in the upstream sector of the Nigerian oil and gas industry shall be deducted at source and paid into the fund.

The NCDF, according to the Executive Secretary of NCDMB, Mr. Simbi Kesiye Wabote, is currently going through some restructuring that will ensure that operators reap the benefits inherent in the fund.

Minister of State for Petroleum Resources and Group Managing Director, Nigerian National Petroleum Corporation (NNPC), Dr. Ibe Kachikwu, had at the Nigerian Content Investment Forum (NCIF) organised by SweetCrude in partnership with the NCDMB in Houston, Texas, United States, said the fund had grown to $600 million from $500 million, adding that the management of NCDMB, the Central Bank of Nigeria (CBN) and commercial banks, are reviewing its guidelines to ease access by indigenous players in the oil service industry.

He also said the Federal Government plans to review tariffs in oil and gas sector that hinder competitiveness of locally manufactured goods and extend fiscal incentives to all investors that have oil and gas facilities close to rural oil producing communities.

Addressing Nigeria’s Small and Medium Enterprises (SMEs) and Houston’s Original Equipment Manufacturers (OEMs), he said specific areas of focus for local content development include infrastructure, fiscal incentives, funding, addressing long contracting cycle, and in-country processing of hydrocarbon resources.

NCDF under BGL

The NCDF never recorded the much growth it ought to have achieved under the erstwhile financial advisers – United Capital and BGL Limited.

In actualising the NCDF’s mandate, the Act also empowers the NCDMB to engage financial advisers to define modalities for the fund’s utilisation as well as identify and attract other sources of funds to augment the aspiration.

Stakeholders had wondered why, despite being in operation for seven years, only Lagos Deep Offshore Logistics Limited (LADOL), Starz and Vandrezzer have so far received some facility from the fund out of the thousands of local operators in the oil and gas sector.

It was learnt that the fund, which has United Capital and BGL Limited as advisers may have further toughened its guidelines to make it difficult for some operators to scale through the conditions for accessing loans.

This is even as one of the financial advisers, BGL, is going through a very difficult time, which has forced the Securities and Exchange Commission (SEC) to ban its Managing Director, Albert Okumagba, and his Deputy, Chibundu Edozie, from participating in capital market activities for life infractions.

$100m Bol/NCIF to the rescue

The appointment of Wabote may, however, signal some light at the end of the tunnel for the NCDF with the board signing a $100 million Memorandum of Understanding (MoU) with the Bank of Industry (BoI) under the Nigerian Content Intervention Fund (NCIF).

The NCDMB boss explained that to enhance accessibility to the fund, the board, in July 2016, signed an MoU with BoI to establish NCIF.

NCIF provides long term facilities to contributors to NCDF on the basis of all-in 8 per cent interest rate.

He said, ‘‘As soon as we finalise the process for release of the initial $100 million (N31 billion) to BoI for the pilot phase, contributors to the fund with manufacturing proposals in the oil and gas industry can approach BoI for the NCIF facility, which has a single obligor limit of$10 million and tenor of up to five-10 years.”

He explained that the revised operating model also has provision for other managed fund schemes for asset acquisition, project finance and contractor finance (especially for community contractors).

These schemes, he said, are to be executed through other development institution(s) and commercial bank(s) including the proposed Development Bank of Nigeria.

The NCIF is a pool made available by NCDMB to meet the funding needs of manufacturers, service providers and other key players in the Nigerian oil and gas industry.

Acting Managing Director and Chief Executive Officer (CEO) of BoI, Mr. Waheed Olagunju, for his part explained at the MoU signing ceremony that the need to build in-country capacity informed the decision of BoI to partner NCDMB in the management of the fund.

Olagunju said it remained regrettable that 60 years after Nigeria discovered oil in Oloibiri, a small community in present day Bayelsa State, it is still largely import dependent. The NCIF, according to him, will attract a single digit interest rate of 8 per cent with a tenor ranging from one to 10 years, a maximum moratorium of 12 months (from date of loan disbursement), $10 million maximum obligor limit and assurance of speedy processing.

Giving further insight into the NCIF, the erstwhile Acting Executive Secretary of NCDMB, Mr. Daziba Patrick Obah, said as part of the operating model for utilisation of NCDF, two Special Purpose Vehicles (SPVs) were incorporated to oversee the fund’s administration while an NCDF Advisory Committee comprising industry representatives (IOCs, PETAN, OGTAN, BoI) was inaugurated to provide oversight function and guide the board on utilisation of the fund.

‘‘Fund’s utilisation was anchored on the principle that it should not be depleted within the short term taking into consideration the feedback from the industry, a case was made for a redesign of the operating model in favour of direct on-lending to Nigerian Oil and Gas Service Providers (NOSPs)

The NCDF model has now been reviewed and the key features of the revised operating model include compliance with Treasury Single Account (TSA) policy of the Federal Government, direct on-lending to beneficiaries under competitive terms while leveraging on experience of BoI in development financing,’’ he had said.

Making remittance to NCDF

According to Wabote, the introduction of the TSA policy by the Federal Government and the need to deepen accessibility of the fund for critical activities created the need to re-engineer the operating model of NCDF.

He explained that the board has fully complied with the TSA policy by opening naira and foreign currency accounts in CBN, into which all NCDF remittances are to be made, stressing that NCDMB does not operate account in any commercial bank, advising contributors to pay all remittances into the NCDF accounts in CBN.

Payments can be made into the NCDF naira, euro, dollars and pounds accounts of NCDMB with the central bank.

Operators should equally note that payment into the account would be based on the currency under which it was signed. If a contract was executed with the dollar currency, an operator cannot pay in naira or euro, hence, the different currency account with CBN.

On the other hand, operators shall include the following information on the NCDF remittance form – vendor’s name, registered company’s address, contract award date, contract description, contract reference no, gross value of contract, ledger payment date, currency, invoice amount, 1 per cent deduction amount.

--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Benin Disco graduates 200 technician trainees

Operators efforts to enhance customer service delivery received a boost recently as the Benin Electricity Distribution Company Plc (BEDC) has inducted 200 graduate trainees and technicians under the 2nd set of its Graduate Trainee Programme (GTP) scheme under its Technician Trainee Programme (TTP).

Managing Director/CEO of BEDC, Mrs. Funke Osibodu, while unveiling the new set of graduates explained that BEDC was the first Disco to demonstrate commitment in using young trainees to change the face of the power sector.

She explained that the objective of the scheme was to train and groom existing and newly recruited young engineers, computer scientists and other analytical graduates as well as non-graduate technicians for BEDC on the knowledge and best technical practices for meeting and exceeding the expectations of the customers in the power industry.

Osibodu hinted that the trainees were well rounded, knowledgeable and fit to lead the revolution expected in fulfilment of the core objective of the power sector privatisation, adding that the programme was the end result of a fruitful partnership between Vigeo Power Academy, a core investor in BEDC and Elizade University, Ilara-Mokin, Akure, Ondo State.

“On our part as a company, we have implemented series of network improvement initiatives and resolved the backlog of metering requests at takeover having installed close to 150,000 meters and added new injection substations to provide relief to overloaded network, resolved a lot of customer complaints and provided several distribution transformers with dedicated distribution lines for high end customers.’’

In his goodwill message, Edo State Governor, Mr. Godwin Obaseki, lauded the target of BEDC to train 2,000 technicians within the next four years as part of efforts to complement the state government’s creation of 2,000 jobs.

“We like what BEDC is doing. We will like you to consider expanding the programme by collaborating with the Benin Technical College (BTC). The state government will provide the facilities for the training of a minimum of 2,000 technicians over the next four years.”

Share

(c) 2017 The Sun Publishing Limited. All Rights Reserved. Provided by SyndiGate Media Inc. (Syndigate.info)., source Middle East & North African Newspapers

share with twitter share with LinkedIn share with facebook
share via e-mail
0
Latest news
Date Title
11:12p INFINITY PHARMACEUTICALS, INC. : Entry into a Material Definitive Agreement, Financial Statements and Exhibits (form 8-K)
11:12p EBAY INC : Submission of Matters to a Vote of Security Holders (form 8-K)
11:12p AMKOR TECHNOLOGY, INC. : Other Events, Financial Statements and Exhibits (form 8-K)
11:12p ELITE PHARMACEUTICALS INC /NV/ : Entry into a Material Definitive Agreement, Completion of Acquisition or Disposition of Assets (form 8-K)
11:12p CARIBBEAN DEVELOPMENT BANK : CDB announces USD4.2 million loan for transformation of the energy sector in St. Vincent and the Grenadines
11:12p CARIBBEAN DEVELOPMENT BANK : CDB finances climate risk and vulnerability assessment for roads in St. Kitts
11:12p CARIBBEAN DEVELOPMENT BANK : CDB approves support to improve climate resilience of electricity sector in St. Vincent and the Grenadines
11:12p CPFL ENERGIAS RENOVAVEIS : Notice to Debenture Holders - Payment of interest and Amortization
11:12p ITALEAF : The Board of Directors approves the 2017 update of the strategic development plan. Focus on holding activity to create value
11:11p ARCONIC : Company Regains Senses, Submits To Paul Singer In Nick Of Time
Latest news
Advertisement
Hot News 
-31.34%JBS : Brazil federal prosecutors say leniency deal talks with J&F resumed Monday
6.47%AEGON : to Sell Majority of U.S. Runoff Businesses to Wilton Re
-2.23%AMGEN : Another Gloomy Day for Amgen
3.45%CLARIANT : Chemicals groups Huntsman, Clariant set to announce merger - sources
6.34%LafargeHolcim hires Sika boss as next CEO
Most Read News
01:11p AKZO NOBEL : Shareholders go to court seeking to oust Akzo chairman
01:07p GOLDMAN SACHS : Saudi Arabia, Iraq agree oil output cut needs nine-month extension
04:40p Ford names Hackett as CEO to tackle car rivals, Silicon Valley
07:26a Ahead of Exxon's annual meeting, climate activists gain ground
05/21 CLARIANT : Chemicals groups Huntsman, Clariant set to announce merger - sources
Most recommended articles
05/15 JPMORGAN CHASE : buys Dublin building with room for 1,000 staff
04:41p Ford names Hackett as CEO to tackle car rivals, Silicon Valley
04:40p JAMES HACKETT : Ford names Hackett as CEO to tackle car rivals, Silicon Valley
04:35p WEICHAI POWER : Kion raises 603 million euro to partly refinance Dematic deal
04:23pDJS&P 500 Logs Third Straight Session of Gains as Tech, Industrial Sectors Rally