Shell Companies in Nigeria, supported by the Federal Government, through the Nigerian National Petroleum Corporation (NNPC), has signed a $2.2 billion Memoranda of Understanding (MoUs) with eight Nigerian banks.
The MoU was signed under the refreshed Shell Contractors’ Support Fund to improve access to finance for Nigerian vendors and suppliers in the oil and gas industry.
Access Bank, Skye Bank, Zenith Bank, Stanbic IBTC Bank, First Bank, Standard Chartered Bank, First City Monument Bank and Guaranty Trust Bank have, under the MoUs signed in Lagos in November, according to a statement by Shell yesterday, set aside $2.2billion for contract execution by Nigerian firms.
The scheme provides support for contractors to enable them finance projects executed for Shell Companies in Nigeria in line with the aspirations of the Nigerian Content Act.
To access these funds, the contractors must have a valid purchase order and meet the banks’ risk assessment criteria. This refreshed version is in response to market realities and will offer loans faster and at cheaper rates.
“Supporting SMEs under this scheme is for the mutual benefit all the parties,” said Osagie Okunbor, Managing Director of Shell Petroleum Development Company of Nigeria Ltd (SPDC) and Country Chair, Shell Companies in Nigeria at the signing ceremony in Lagos.
“While the scheme reduces the pressure from requests for advance payments from contractors on us, it also ensures optimum delivery by our contractors, leaving the banks with a de-risked client base in addition to the comfort of domiciliation of payments,” he added.
Finance Manager, Nigeria and Gabon, Guy Janssens, added that funding was key to enable contractors deliver and grow. He also urged the banks to make the scheme work.
Managing Director, Shell Nigeria Exploration and Production Company (SNEPCo) Bayo Ojulari, advised the contractors to perform in order build trust and grow.
The Group General Manager, NAPIMS, Dafe Sejebo, who was represented by Bunmi Lawson, implored the banks to make the loan facilities available to the vendors when they come for them.
