- Modular Refineries: FG Contacts IFC, CBN for Funding
The Federal Government on Wednesday said it had commenced talks with financial institutions in order to provide funds for investors who were interested in investing in modular refineries.
It stated that it was in talks with a number of potential financiers like the Central Bank of Nigeria, International Finance Corporation and Nigerian Sovereign Investment Authority in order to support private investment in modular refineries.
The Senior Technical Adviser to the Minister of State for Petroleum Resources, Rabiu Suleiman, disclosed this at the ongoing Nigeria International Petroleum Summit in Abuja, noting that the Federal Government would also guarantee regular crude oil supply to modular refinery investors.
According to him, this will be in addition to tax and Customs duty waivers, which the investors will also enjoy from the government to ensure that their projects take off and remain profitable.
In November 2017, the Federal Government stated that it was considering granting 13 operational licences for modular refineries in the Niger Delta.
Suleiman said, “We have a lot of programmes that will support modular refining initiative and a lot of incentives have been put together to support this initiative, right from Customs duty waivers. Anybody who wants to invest in modular refining in the Niger Delta is going to benefit from such Customs duty waivers and tax reliefs that are being discussed at very senior level and we have reached a very serious level and that is going to happen.
“On financing, we have engaged the government; the central bank; we have engaged the Bank of Industry; we have engaged Sovereign Wealth Fund; we have engaged The Infrastructure Bank. We have engaged a lot of them, including the IFC and the rest.
“We have all worked with them and they all promised to make contributory finance into that. Only two weeks ago, we engaged with the NDDC the MD made a commitment that they were going to see how they could put in some money even if it means to pick up an equity in one or two or three of the refineries.
“State governments have said they want to be a part. So, we are encouraging a lot of financing. In the next two weeks, we intend to call for an investors’ engagement forum that will address some of the funding arrangements that we intend to bring on board.”
Suleiman stated that crude oil supply to the marginal refineries was more or less guaranteed, adding that refiners in Nigeria should not be denied the commodity when they start operating.
“The crude is for sale; we take it offshore to sell; there is no justification why crude should not be made available to the refiners in-country. Today, we have already issued a letter to one of the proponents of the modular refineries and we directed ExxonMobil to guarantee crude supply to that refinery because it is in close proximity to Mobil in Eket,” he added.
