$5 billion fund to ease access to loans by local contractors in Nigeria
Shell Petroleum Development Company (SPDC) and five banks have signed a Memorandum of Understanding (MoU) to create a $5 billion fund to ease access to loans by local contractors.
The company said the initiative tagged, Shell Contractors Support Funding Scheme, is aimed at placing its contractors at the frontline for service delivery to the oil and gas industry and actualise the Nigerian local content target.
Speaking during the official launch of the scheme, weekend, Managing Director of SPDC, Mr. Mutiu Sunmonu, said Shell would continue to support local vendors through the award of contracts and capacity development.
He noted that five of its partnering Nigerian financial institutions, namely, First Bank of Nigeria Plc, Citi Bank, Access Bank Plc, Fidelity Bank Plc and Standard Chartered Bank, would each contribute $1 billon to the fund, while David L Ross Associates would be the technical partners.
He said: “The scheme we are launching today is worth much more than $5 billion. So I will therefore expect that we stretch our delivery and performance far beyond what was achieved by the Americans when they landed on Mars.
“I want to see Nigerian contractors build the first floating production storage and offloading vessel in Nigeria. I want to see Nigerians undertaking daunting technological challenges,” noting that the skills abound in the country.
The SPDC boss explained that with the scheme, financing of projects, which presents a major challenge to contractors’ growth and participation in the delivery of goods and services to the oil and gas industry, would be greatly reduced.
“The banks have committed to relaxing the collateral security requirement, reducing interest rates and shortening the processing time. The lower interest rate should enable contractors to establish their competitive advantage and become global players,” Sunmonu said.