NLNG initiates $1bn finance scheme

Niger Delta Bonny Islands oil terminals01 December 2013, Port Harcourt — The Nigerian Liquefied Natural Gas, NLNG, has initiated a finance scheme that would enable contractors and vendors access $1 billion credit facility from five banks.

Managing Director of the gas company, Mr Babs Omotowo, signed, in Port Harcourt over the weekend, a Memorandum of Understanding, MoU, with representatives of Access Bank, First Bank, Standard Chartered Bank, United Bank for Africa and Zenith Bank.

The scheme is part of the Nigerian Oil and Gas Industry Content Development Act of 2010 which encourages full participation of local companies alongside their foreign counterpart.

Omotowo said the credit would enable the NLNG register contractors and vendors, and speed up delivery of goods and services to the nation’s oil and gas industry.

He said, “Banks in Nigeria often find it challenging acceding to loan applications from local contractors with little or doubtful assurances of repayment. Local enterprises, which have little track record, credit history or liquid collateral are often refused finance because banks perceive them to be risky.

“Today, the NLNG is taking a major step in bringing both potential lenders and borrowers together to bridge the financing gap that exists locally. This scheme will alleviate funding challenges of vendors, reduce operating cost, improve project delivery timeline and drive the growth of Nigerian vendors.

“The success of any local contractor will also benefit larger and smaller businesses around them and contribute to the nation’s economic growth.”

Omotowo said the federal government’s gas masterplan, together with NLNG Train 7 and Brass LNG, on completion, would create thousands of jobs for Nigerians. The Train 7 project specifically, he said, would create economic opportunities for local companies and address the nation’s capital and infrastructural challenges.

He advised the beneficiaries and banks to strictly play by the rules to guarantee the success and sustainability of the scheme.
*Victor Edozie, Daily Trust

About the Author