FG GIVES $500BN LIFELINE TO IMPORTERS OF GAS FLARE EQUIPMENT
The Bank of Industry has created a $500bn funding arrangement with the Bank of China (BOC) to finance the importation of gas flare equipment into the country.
Panelists at the recent multilogues session of the Nigerian Gas Association (NGA), who disclosed this, explained that the funding the arrangement requires the intending borrowers to advance about 25 percent of their funding needs and imports their equipment from China.
A communiqué issued at the end of the confab signed by the president of NGA, Ed Ubong, said similar arrangements with the US Exim Bank are also available for players that want to import their flare capture equipment from the United States.
The panelists agreed that cost-reflective pricing mechanism, favorable fiscal regime, ease of repatriation of dividend/ capital, stable exchange rate, and national industrial policy stability are critical conditions for spurring equity and loan financing in the local Gas market.
They advocated the need for the adjustment of royalties on gas supplied and consumed in the domestic environment to encourage more supplies that catalyze more significant development in the overall domestic economy, just as they demanded non-discriminatory pricing mechanisms that offer suppliers equal opportunity for returns on investments and cost-reflective tariff structure across the gas value chain.
There was consensus among the panelists that the gas supply industry must be anchored on a willing-seller willing-buyer framework to unlock further investments in Gas exploration and delivery infrastructure.
There should be a removal of price controls and concessional Gas tariffs for sections of the market that are critical to achieving overall economic growth objectives.
The scope of the National Gas Transportation Network Code’s should be expanded to fully cover the domestic Gas market in line with provisions already specified by the Department of Petroleum Resources (DPR), which regulates the industry.
“The Central Bank of Nigeria (CBN) and other development banks need to prioritize the gas industry, underpinned by concessional interest rates and guarantees for dollar-denominated transactions, to assure lender confidence in gas projects,’’ the communiqué added
The panels enjoined players to foster good corporate governance, de-risking loans with equity contributions, and mapping out clear funding outlines before initiating a project as well as agreed that gas-based industries such as fertilizer and cement constitute key grow the country’s domestic gas consumption and unlock the much-needed economic growth required to take over 90 percent of Nigerians out of extreme povconsumption centers that could erty.
They further emphasized the need to warehouse world-class local capacity to adapt imported technologies for the local conditions to reduce overdependence on Original Equipment Manufacturers (OEMs) improve local content know-how, deepen innovations, curtail maintenance costs and the overall cost of production.
They also highlighted the need to create and develop regional infrastructure across the West African economies to deliver gas supplies to markets through various marine, rail, road, and pipeline channels.
According to the panelists, there was a need for improved regional collaboration on maritime security to arrest the Gulf of Guinea’s rising piracy incidents for safer virtual Gas shipping through marine transport, adding that the process of building industry capacity and retooling professionals from an oil-based economy to a gas-based economy should begin in earnest with the NGA playing a central role.