By SundiataPOST, Abuja
The Nigerian Liquefied Natural Gas (NLNG) on Thursday initiated a finance scheme which would enable contractors and vendors to access 1 billion U.S.-dollar credit from five banks.
The Managing Director of NLNG, Mr Babs Omotowo, made this known in Port Harcourt when he signed a Memorandum of Understanding (MoU) on the scheme with representatives of the banks.
The banks are Access Bank, First Bank, Standard Chartered Bank, United Bank of Africa and Zenith Bank.
Omotowo said that the credit would enable NLNG registered contractors and vendors to speed up delivery of goods and services to the nation’s oil and gas industry.
He said that the scheme was part of the Nigerian Oil and Gas Industry Content Development Act of 2010, which encouraged the full participation of local companies alongside foreign companies.
“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 illiquid collateral are often refused finance because banks perceive them to be risky.
“Today, 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 costs, 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 it and this will contribute to the nation’s economic growth,” he said.
Omotowo said that the Federal Government’s Gas Master Plan, NLNG Train `7’, and Brass LNG, on completion, would create thousands of jobs for Nigerians.
He noted that the Train `7’ project would particularly create economic opportunities for local companies, while addressing the nation’s capital and infrastructural challenges.
Omotowo called on the beneficiaries and banks to strictly transact business in line with the laid-down rules so as to guaranty the success and sustainability of the scheme.