CBN offers N250bn stimulus to promote investment in gas as alternative energy

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In consonance with the federal government’s policy program to aggressively promote the establishment of gas processing plants, gas cylinder manufacturing plants, auto gas conversion kits/components manufacturing plants and gas dispensing stations nationwide, the Central Bank of Nigeria, CBN, has offered the sum of N250billion intervention fund as the much needed stimulus to attract investment in that the critical sector of the national economy.

According to the guideline issued by the CBN and titled, “Framework for the implementation of intervention facility for the national gas expansion program”, the maximum facility available on request per applicant after satisfying the very simple conditionalities, is N10billion while the maximum working capital that could be granted the successful applicant is, N500m.

The CBN on its website expressed the view that, the low level of investment in the industry had resulted in the minimal production and utilization of Compressed Natural Gas and Liquefied Petroleum Gas as clean alternative sources of domestic energy in Nigeria.

Eligible activities under the intervention include establishment of gas processing plants and small-scale petrochemical plants; establishment of gas cylinder manufacturing plants; establishment of Liquefied-Compressed Natural Gas, CNG, regasification modular systems; and establishment of auto gas conversion kits or components manufacturing plants.

The apex bank 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.

The bankers bank envisaged the investment portfolio when properly nurtured is expected to 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.

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

It also involves the establishment/expansion of micro distribution outlets and service centers for LPG sales, domestic cylinder injection and exchange; and any other mid to downstream gas value chain related activity recommended by the Ministry of Petroleum Resources.