• Set $5m investment cap for oil firms

The Nigerian Content Development and Monitoring Board (NCDMB) and the Bank of Industry (BOI) have inaugurated the Investment Committee of the Nigerian Content Equity Fund (NCEF), a $100 million financing vehicle designed to provide long-term capital to indigenous oil and gas service companies.

The initiative, which has an investment limit of $5 million for each beneficiary, is expected to deepen local participation in the oil and gas industry by providing equity financing to businesses that might otherwise struggle to secure conventional loans.

Speaking at the inauguration in Lagos at the weekend, the Executive Secretary of the NCDMB, Felix Omatsola Ogbe, said the committee’s inauguration marked the commencement of a new financing window under the Nigerian Content Intervention (NCI) Fund.

Unlike conventional lending arrangements, the NCEF will provide financing in exchange for equity holdings in beneficiary companies. According to the board, the initiative is intended to reduce the cost of locally produced oil and gas goods and services, create an additional source of income for the NCDMB and attract more private investment into the sector.

The board added that the fund would target oilfield service companies, fabrication yards, manufacturers operating within the oil and gas value chain and related businesses. It is estimated that the intervention could generate about 12,500 direct jobs and 7,000 indirect jobs.

The NCDMB explained that the fund is the latest addition to the NCI Fund, established under Section 104 of the Nigerian Oil and Gas Industry Content Development (NOGICD) Act to address financing constraints faced by indigenous companies.

According to the board, five NCI Fund products managed by the BOI and two administered by the Nigerian Export-Import Bank (NEXIM) have provided debt financing to qualified companies over the last decade through facilities carrying interest rates of eight per cent and repayment periods of up to five years.

Ogbe charged members of the committee to ensure due diligence in selecting beneficiaries, stressing that the initiative should not be regarded as a grant scheme.

“Our top priority should be identifying people who will use the fund properly and, most importantly, return our funds to us so that we can continue the programme for other deserving beneficiaries,” he said.

The Managing Director of the BOI, Olasupo Olusi, described the development as a major milestone in the partnership between both institutions, which began nearly a decade ago with the administration of the $350 million Nigerian Content Intervention Fund.

According to him, the new financing structure addresses a critical gap in the industry’s funding framework, particularly for companies with strong growth prospects but lacking the collateral required to obtain conventional loans.