NCDMB, BOI unveil US$100m equity fund for indigenous oil firms
The new fund will invest up to US$5 million in promising Nigerian companies, creating jobs and strengthening local content.
For years, many indigenous oil and gas companies have struggled to expand, not because they lacked viable businesses, but because they could not meet the collateral requirements needed to secure bank loans. The Nigerian Content Development and Monitoring Board (NCDMB) believes it has found a solution that could reshape how local companies raise capital.
The Board has launched a US$100 million Nigerian Content Equity Fund (NCEF), a new financing initiative that will invest directly in qualifying Nigerian oil and gas service companies instead of providing conventional loans.
The fund, managed by the Bank of Industry (BOI), will make equity investments of up to US$5 million in eligible companies operating across Nigeria’s oil and gas value chain, including oilfield service firms, manufacturers, fabrication yards and related businesses.
The initiative represents a major shift in the Board’s local content financing strategy, moving beyond debt financing to provide patient capital for businesses with strong growth potential.
The programme officially commenced on Friday in Lagos with the inauguration of the Investment Committee by the Executive Secretary of NCDMB, Engr. Felix Omatsola Ogbe, marking the final step before the rollout of the new financing window under the Nigerian Content Intervention Fund (NCI Fund).
According to the Board, the Equity Fund was created to address financing challenges that conventional lending has not been able to solve. Rather than increasing the debt burden on businesses, the fund will provide capital in exchange for equity, allowing companies to expand while strengthening their financial position.
NCDMB said the initiative is expected to help reduce the cost of locally produced oil and gas products and services, create an additional income stream for the Board and encourage more private investors to back financially viable indigenous companies.
The Board estimates that investments made through the fund could generate about 12,500 direct jobs and 7,000 indirect jobs, while helping Nigerian companies increase their market share and compete for larger contracts within the oil and gas industry.
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Speaking at the inauguration, Ogbe charged members of the Investment Committee to ensure rigorous due diligence before approving any investment, stressing that only credible businesses with sustainable growth prospects should benefit from the programme.
He also cautioned prospective beneficiaries against viewing the fund as a grant.
“Our top priority should be identifying people who will use the Fund properly and, most importantly, return our funds back to us so that we can continue the programme for other deserving beneficiaries,” he said.
The Equity Fund builds on the success of the Nigerian Content Intervention Fund, which was established under Section 104 of the Nigerian Oil and Gas Industry Content Development Act to bridge financing gaps for indigenous oil and gas companies.
Over the past decade, the intervention programme has provided debt financing through five products managed by the Bank of Industry and two managed by the Nigerian Export-Import Bank, offering loans with repayment periods of up to five years at single-digit interest rates.
Managing Director of the Bank of Industry, Dr Olasupo Olusi, described the Equity Fund as the next phase of the long-standing partnership between BOI and NCDMB, which has already managed the US$350 million Nigerian Content Intervention Fund.
According to him, introducing an equity financing window fills an important gap in Nigeria’s financing landscape by supporting businesses that may have strong commercial prospects but are unable to secure traditional loans because they lack sufficient collateral.
“The next step, which I am very impressed with and very thankful to the NCDMB for thinking through with BOI, is the need to fill the finance gap with equity,” Olusi said.
He expressed confidence that the initiative would attract additional investment into Nigeria’s oil and gas industry while strengthening indigenous participation across the sector.
Providing further insight into the structure of the fund, BOI’s Group Head of Equity Investments, Mr Chike Chukwuelu, said the programme addresses what industry experts describe as the “missing middle” by providing growth capital to businesses that are too advanced for start-up funding but unable to access commercial debt.
He added that the equity model would also allow fund managers to work more closely with beneficiary companies, helping improve governance, strengthen operations and build sustainable businesses capable of competing on a larger scale.
Also speaking, the Senior Technical Adviser to the Executive Secretary, Engr. Austin Uzoka, said the new initiative presents an opportunity to achieve what previous financing interventions could not by building stronger indigenous companies through strategic equity investments rather than debt alone.
With investments of up to US$5 million per company, the NCDMB believes the new fund could become a catalyst for the next generation of indigenous oil and gas businesses, helping them secure larger projects, attract additional investors and deepen local content participation across Nigeria’s energy industry.
