CBN sets N10bn maximum loan limit for gas intervention fund

The Central Bank of Nigeria (CBN) has fixed the upper limit an obligor can access under its N250 billion gas intervention fund at N10 billion.

It made the revelation in a guideline titled: ‘Framework for the Implementation of Intervention Facility for the National Gas Expansion Programme,’ issued on Friday.

Part of loan’s conditions for manufacturers, wholesale distributors and processors is that the facility “shall be determined based on the activity and shall not exceed N10bn per obligor;

“Working capital is maximum of N500m per obligor.”

The apex bank said it launched the fund to help boost investment in the gas value chain as part of measures to increase financing to the critical sectors of the economy.

It noted that the low level of investment on the sector had triggered minimal production and utilisation of Compressed Natural Gas (CNG) and Liquefied Petroleum Gas (LPG) as clean alternative domestic energy source in the country.

The CBN went further to say that the inability to exploit gas resources has had negative implications for Nigeria as the country has the potential of creating rapid growth in the non-oil economy.

Read also: CBN issues emergency approval to four firms to import maize

Among the objectives of the funding scheme are facilitating greater access to finance for private sector investments in the domestic value chain and encouraging investments in the development of infrastructure to optimise domestic gas resources for economic development.

The CBN said it planned to speed up the utilisation of CNG as the fuel of choice for transportation and power generation, as well as LPG as the fuel of choice for transportation, domestic cooking and captive power.

The funding will equally facilitate the development of gas-based industries especially petrochemical (fertiliser, methanol, etc) to support large sectors including textile, agriculture and related industries as well as create leverage for further private sector investments in the domestic gas market, and bolster employment around Nigeria.

Similarly, it includes the establishment/expansion of micro distribution outlets and service centres for LPG sales, domestic cylinder injection and exchange, as well as any other mid to downstream gas value chain related activity advised by the Petroleum Resources Ministry.

Businesses that qualify funding under the scheme comprise establishment of gas cylinder manufacturing plants, establishment of gas processing plants and small-scale petrochemical plants, establishment of auto gas conversion kits or components manufacturing plants and establishment of L-CNG regasification modular systems.

The rest are establishment and manufacturing of LPG retail skid tanks and refilling equipment, establishment of CNG primary and secondary compression stations, enhancement of domestic cylinder production and distribution by cylinder manufacturing plants and LPG wholesale outlets, development/enhancement of auto gas transportation systems, conversion and distribution infrastructure.

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