Shell’s contractor support fund hits $2.4 billion
The Shell Petroleum Development Company of Nigeria Limited (SPDC) has upped its contractor support fund with $200 million in an effort to boost the financial capacity of vendors and suppliers in Nigeria’s oil and gas industry. This latest move brings the fund size to $2.4 billion.
Shell, in 2016, had signed a $2.2 billion MoU with seven Nigerian banks that have since then disbursed around $1.5 billion loans to about 372 small- and medium-sized Nigerian suppliers and vendors in the oil and gas industry.
SPDC’s Director and General Manager, Government and Business Relations, Bashir Bello who signed the $200 million Memorandum of Understanding (MoU) with the United Bank for Africa (UBA) in Abuja recently, in a statement, described the initiative as a product of the continuous effort by SPDC and its joint venture partners – NNPC, Total and Agip – to enhance Nigerian content and local participation in the nation’s oil and gas value chain.
The fund provides support for contractors to finance projects executed for Shell companies in Nigeria in line with the aspirations of the Nigerian Content Act.
To access the fund, the contractors must have a valid purchase order and meet the bank’s risk assessment criteria.
“Findings indicate that lack of access to capital hinders many Nigerian companies from competing for and executing contracts effectively” said Bello who signed the deal on behalf of SPDC. “This funding will enable us to achieve our community content ambition of increasing participation of host communities in the SPDC value chain.”
The General Manager Energy Bank of UBA, Ebele Ogbue, said the bank was committed to providing support to Nigerian companies through its partnership with SPDC JV. Ogbue, who signed the MoU for UBA, commended the Nigeria and community content efforts of Shell companies in Nigeria, noting that UBA was ready to provide the needed financial backing that would empower Nigerian companies to play more active role in the country’s energy sector and beyond.
The Shell Contractor Funding Scheme started in 2011 with the Shell Kobo Fund, which gave rise to the Shell Contractor Support Fund in 2012.
The scheme has been redesigned to address the current economic exigencies and to align it with stakeholder needs by merging the two initial initiatives.