Modupe Gbadeyanka
By Modupe Gbadeyanka
The Central Bank of Nigeria (CBN) on Monday released the modalities for the implementation of an intervention facility worth N250 billion for the National Gas Expansion Programme (NGEP).
In order to make Compressed Natural Gas (CNG) the fuel of choice for transportation and Liquefied Petroleum Gas (LPG) the fuel of choice for domestic cooking, captive power and small industrial complexes, the government introduced the NGEP.
Under the NGEP, the CBN is providing N250 billion loan to help stimulate investment in the gas value chain.
According to the apex bank, large-scale projects under the intervention will be financed under the Power and Airlines Intervention Fund (PAIF), in line with existing guidelines regulating the PAIF, while small-scale operators and retail distributors will be financed by the NIRSAL Microfinance Bank (NMFB) and/or any other Participating Financial Institution (PFI) under the Agribusiness/Small and Medium and Medium Enterprises Investment Scheme (AgSMEIS).
The CBN said those who qualify for the credit facility are operators in the gas processing plants business as well as gas cylinder manufacturing plants sector.
Also, those interested in doing the business of L-CNG regasification modular systems, autogas conversion kits or components can apply for the loan.
The central bank stated that the loans would be given with an interest rate “not more than 5.0 per cent p.a. (all-inclusive) up to February 28, 2021, thereafter, interest on the facility shall revert to 9 per cent p.a. (all-inclusive) effective from March 1, 2021.”
It said for manufacturers, processors and wholesale distributors, the term loan “shall be determined based on the activity and shall not exceed N10 billion per obligor [with a maximum] working capital of N500 million per obligor.”
Also, for SMEs and retail distributors, the term loan “shall be determined based on the activity and shall not exceed N50 million per obligor [with a maximum] working capital of N5 million per obligor.”
It said applicants must submit applications through any Participating Banks (PBs) to the CBN with documents, including relevant endorsements and permits from the Ministry of Petroleum Resources (MPR) for the project.
Upon approval, the CBN will conduct an internal review of the application to ensure compliance with the guidelines before the release of the loan within five working days.
However, the CBN stressed that there would be periodic monitoring of projects financed under the scheme jointly with the PB and MPR.
View the full guidelines HERE
