Key highlights:
- The total exposure of the CVFF is within the region of 350 million dollars and this amount is 50 per cent of NIMASA control.
- The primary lending institutions will provide 35 per cent and shipowners will have to provide 15 per cent, making 50 per cent in total.
- The NNPC agreed to offer them nine per cent so that the shipowners will only have to source for only six per cent.
The Nigerian Government revealed that it is about to commence the disbursement of the Cabotage Vessel Financing Fund.
They added that the total exposure of the CVFF is within the region of 350 million dollars and this amount is 50 per cent of NIMASA control.
This was disclosed on Tuesday by the Director General, of the Nigerian Maritime Administration and Safety Agency (NIMASA), Dr Bashir Jamoh, at the University of Lagos Institute of Maritime Studies maiden Annual Lecture held in Lagos.
Cabotage Vessel Financing Fund (CVFF)
In the event themed,” From Crude to Blue – Nigeria’s Blue Economy: The Imperative of Maritime Domain Awareness and Good Governance”, Jamoh said Nigeria is already into a blue economy and what needed to be done is to see its sustainability, he added:
- “The Cabotage Vessel Financing Fund (CVFF), using ferries, ship repairs and buildings are all blue economy, and there are many others. We are into it but what is left now, is how to structure it.“
- The amount of value that the blue economy provide is over 2.5 trillion dollars. So what portion, how much does Nigeria intend to strike from this amount? This depends on our seriousness.
Commencement
The NIMASA chief noted that Nigeria needed to tap into the 350 million jobs that abound in the blue economy, as Nigeria will soon commence disbursement from the fund.
- “On the issue of increasing jobs, we are about to commence the disbursement of the Cabotage Vessel Financing Fund. The total exposure of the CVFF is within the region of 350 million dollars and this amount is 50 per cent of NIMASA control.
- “By the guidelines, the primary lending institutions will provide 35 per cent and shipowners will have to provide 15 per cent, making 50 per cent in total.
- “If we have 350 million as a 50 per cent contribution to NIMASA, then we are accepting another 350 million from the primary lending institutions and that means 700 million dollars.
- “With 750 million dollars, we are set to give a maximum of 25 million dollars each to shipowners to purchase ship which will directly or indirectly provide jobs.”
NNPC
He also revealed that the Nigerian National Petroleum Corporation (NNPC) expressed interest in taking part in the funding of ships that would be acquired by Nigerian shipowners using the soon-to-be disbursed CVFF.
- “The NNPC agreed to offer them nine per cent so that the shipowners will only have to source for only six per cent.
- “NNPC said it needs ships to lift Nigerian crude and that it will give Nigerian shipowners the specifications of ships to buy. It will also give them nine per cent out of the 15 per cent of the funding that was supposed to be provided by the shipowner.
- “They said they will take over the ship and provide the cargo until it recovers the amount invested in the acquisition of the ships.”
Backstory
Recall Nairametrics disclosed in January that the Nigerian Government fave Primary Lending Institutions (PLIs) a 72-hour ultimatum to release modalities for the disbursement of the $350 million Cabotage Vessels Finance Fund (CVFF).
NIMASA DG, Dr Bashir Jamoh, said the Primary lending institutions involved are Zenith, Polaris, United Bank of Africa (UBA) Jaiz and Union Bank.
Jamoh noted that modalities to be released would include interest rate, tenure, collateral and requirements needed to access the fund, with an interest rate in line with global standards as it would be in foreign currency.
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