The Central Bank of Nigeria (CBN) aim to reduce the unemployment figure in Nigeria by three million if the grant of N250 billion fund for Gas Intervention is duly executed. In 2021, the Apex bank introduced an Intervention facility worth N250 billion in partnership with the Ministry of Petroleum Resources to energize finance and interest investors for sustainable business development in the gas value chain within the country. This intervention, in other words, aid to promote investment, promote private financing access and improve gas-based industries.
Nigeria, despite its cubic feet of gas reserves at 208 trillion standard, enough to make it a leader in worldwide gas supply business, still struggle to address domestic needs as a result of poor and unavailable infrastructure for transportation and production. Lack of investment has caused a slow down in meeting local and global demand which further makes CBN build the domestic gas expansion programme through the financing facility. The CBN stated that the facility will speed up adoption of Compressed Natural Gas (CNG) for power generation and transportation, while Liquefied Petroleum Gas (LPG) will function as fuel for transportation and domestic cooking among others.
Manufacturers will gain access to periodic loan facilities.
Eligible activities that will benefit from the intervention funding in downstream and the midstream gas sectors will be the development and establishment of small scale gas plants at range from gas cylinder manufacturing, Liquefied Petroleum Gas retail skid tanks, Liquefied & CNG regasification modular systems, compression stations and others. Access to this fund is through NIRSAL Microfinance Bank (NMFB) and deposit money banks (DMB). Credit appraisals are done by these participating banks that ensure easy access to the CBN intervention funding for their customers.
Consistent monitoring of project fund is controlled by the CBN, participating banks and the Ministry of Petroleum Resources. There are levels of execution to provide intervention funding for the manufacturers, distributors, wholesale distributors, processors, and smaller SMEs. Under the Power and Airline Intervention Fund (PAIF) and the aegis of the existing Power, DMBs will fund the former, while NMFB will fund the retail distribution and the SME’s under Agribusiness/ Small And Medium Enterprises Investment Scheme (AgSMEIS). Under PAIF, the manufacturers, wholesale distributors and aggregators will gain access to periodic loan facilities of N10 billion per obligor and N500 million per obligor for working capital facilities.
While LNG provides 750,000 jobs, CNG provides 250,000 jobs.
Statistically, the interest rates range from 5% to 9% per annum on these facilities and 5 years to 10 years for the maximum term loan tenor. Technical Adviser to the immediate past Minister of State for Petroleum Resources, Chief Timipre Sylva, Ms. Brenda Attaga, addressed newsmen in Abuja that the expectation of the scheme is to promote job creation through the volume of funding and spread of businesses. She stated that the Liquefied Natural Gas (LNG) sector initiative on job creation is focused on 750,000 jobs creation and a target of 250,000 jobs in Compressed Natural Gas (CNG) sector.
Also, CNG sector jobs like kit centre operations where vehicles using petrol can be adjusted to using CNG, giving opportunity for new fueling stations to subsequently build up. Stakeholders from various oil and gas sectors implore operators to judiciously develop the highly required infrastructure, using the CBN N250 billion intervention facility. Dr. Billy Gillis-Harry, the President of the Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN), asserted that the access to the N250 billion funding facility provided by the CBN is constricted.
Operators are urged to judiciously implement the N250bn fund.
Dr. Gillis-Harry said that there would be collaboration between the CBN and associations in the sector to foster the agenda of domestic gas utilisation. He added that Nigeria has enormous gas resources to stop the import of LPG. Dr. Gillis-Harry stated that if Nigeria concentrates on export market alone it will be unwise. Habeeb Jaiyeola, PricewaterhouseCoopers’s Associate Director of Energy, Utilities, and Resources, said that it is enough and due time for the government to stop exportation. He affirmed that CBN’s N250 billion intervention was particularly meant to achieve the government’s objectives. He also urged all operators to wisely use N250 billion CBN intervention facility advantageously.
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