The Central Bank of Nigeria on Friday released guideline for implementation of intervention facility for the national gas expansion programme.
In the guideline, the apex bank set N10 billion as the maximum loan an obligor can access under its N250bn intervention fund for the gas sector.
Part of the term loan conditions for manufacturers, processors, wholesale distributors, was that the term loan, “Shall be determined based on the activity and shall not exceed N10bn per obligor; “Working capital is maximum of N500m per obligor.”
The CBN said it introduced the N250bn intervention facility to help stimulate investment in the gas value chain as part of its efforts to stimulate finance to critical sectors of the economy.
It stated that the low level of investment in the industry had resulted in the minimal production and utilisation of Compressed Natural Gas and Liquefied Petroleum Gas as clean alternative sources of domestic energy in Nigeria.
Failure to harness its gas resources has had negative consequences for the country, economic, environmental, fiscal and social, particularly as the industry has the potential to engender rapid growth in Nigeria’s non-oil economy, it stated.
It said the objectives of the facility included improved access to finance for private sector investments in the domestic gas value chain; and also to stimulate investments in the development of infrastructure to optimise the domestic gas resources for economic development.
The CBN said it also aimed to fast-track the adoption of CNG as the fuel of choice for transportation and power generation, as well as LPG as the fuel of choice for domestic cooking, transportation and captive power.
It would also fast-track the development of gas-based industries particularly petrochemical (fertilizer, methanol, etc) to support large industries, such as agriculture, textile, and related industries; provide leverage for additional private sector investments in the domestic gas market; and boost employment across the country.
Eligible activities under the intervention include establishment of gas processing plants and small-scale petrochemical plants; establishment of gas cylinder manufacturing plants; establishment of L-CNG regasification modular systems; and establishment of auto gas conversion kits or components manufacturing plants.