CVFF Disbursement : NNPC Shipping to Rescue Indigenous Shipowners with 9%, out 15% Contribution

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The Managing Director of NNPC Shipping, Mr Panos Gliatis receiving a souvenir from the Director General of Nigerian Maritime Administration and Safety Agency (NIMASA) Dr Bashir Jamoh when he visited the NIMASA headquarters in Apapa Lagos on Tuesday

– NIMASA, Abuja Office to Open Maritime Bank

By Innocent Orok

The Director General of Nigerian Maritime Administration and Safety Agency (NIMASA) Dr Bashir Jamoh on Tuesday met with the new Managing Director of NNPC Shipping, Mr Panos Gliatis, assuring that the NNPC Shipping a subsidiary of the Nigerian National Petroleum Corporation Limited (NNPCL) has agreed to be off-takers for the vessels that would be acquired through the disbursement of the much anticipated Cabotage Vessel Finance Fund (CVFF).

This is even as three foreign banks namely; African Export Import Bank (Afrexim Bank), African Development Bank and American Express Bank have all indicated interests in participating in the CVFF Fund disbursement process.

The guidelines for disbursement of the CVFF fund is that NIMASA would provide 50% of the cost of the vessel, the Primary Lending Institutions (PLI) which are the banks, are to provide 35%, while the beneficiary shipowners would have to provide 15%.

However, at the meeting on Tuesday, Dr Jamoh announced that NNPC Shipping had agreed to provide 9% out of the 15% financial requirement from the indigenous shipowners, leaving them to come up with just 6% of the seed money.

Dr Jamoh said that with the NNPC Shipping acting as off-takers for the vessels, it would not be difficult for them to get contracts and cargoes. The NIMASA boss appealed to the new NNPC Shipping boss to go back and revive the agreements that NIMASA has reached with his predecessor in office.

Dr Jamoh said that in six months time, the CVFF would be disbursed. He inform that the disbursement process was stalled by the Primary Lending Institutions (PLI) who were asking for a 7.5% interest rate, while NIMASA and NNPC Shipping were insisting on 6.5% interest rate.

Dr Jamoh said “On the CVFF disbursement, we have gone far, the disagreement was when the PLI where insisting that the interest rate must be 7.5%, while NIMASA and NNPC Shipping says it should be 6.5%.

“I believe that with your arrival as the new MD, we would take off this discussions from here and see how fast we can move to start disbursement.

“It is interesting that NNPC have agreed to be off takers of these vessels because one thing is to have vessel, another is to have the cargo, if you don’t have the cargo, the ships becomes useless.

“The essence of CVFF is to promote job creation and expansion of the industry.

“With you coming onboard, I think we can draw an action plan to see how we can move forward and be sure that we record a milestone within the next six months.

“The CVFF is one of the low hanging fruits of the Blue Economy Ministry, so i would like to appeal that we go back to the drawing board and revive our previous arrangements, so that shipowners can come back and line up to see the guidelines and create jobs. This would also reduce insecurity in our country.

“The CVFF is not meant to give 100% funding to shipping, but to bring down the Interest rate, and to a large extent we are about to succeed in doing that.
At the end of the day, we are going to have other banks coming in to give us assistance and they have already started coming in.

“We have the Afriexim Bank, African Development Bank and American Express Bank and they all intend to support the issue of CVFF fund.
With the opening up of the CVFF fund, we have a window of other financial institutions coming in to compete with what we have.

“Secondly, you are aware of the establishment of the Maritime Bank, this would address the challenges of downward trend in our shipping activities. In terms of funding, we have gone far with the establishment of the maritime bank.

“Our new Abuja office has been directed to release one floor for the commencement of operation of the Maritime Bank. We should give them a little time to study and understand” he said

Also speaking at the meeting, frontline shipowner and President of Nigerian Chamber of Shipping,
Alhaji Aminu Umar expressed much satisfaction at the collaboration between NNPC Shipping and indigenous shipowners.

Speaking on the essence of the Tuesday meeting, he said “We have come to inform NIMASA as our regulator, that we have entered into partnership with NNPC Shipping, they have come with an open arm to partner the Nigerian shipowners and under the auspices of the Nigerian Chamber of Shipping, we have had an interactive session on Monday where all the different associations of shipowners including NISA, SOAN, Master Mariners among others were all excited.

“We wanted to show this to NIMASA that there is a partnership going on, and we would like your blessings, guidance and support, and in support maybe you can give us the CVFF.

“This partnership would open up a lot of opportunities for us who are operators in this industry, and we believe that it would bring a lot of investment opportunities, create jobs and economic growth which is what NIMASA has been pushing for under the administration of Dr Bashir Jamoh.

“The last management of NNPC Shipping was already considering a joint venture to support indigenous shipowners. We expect the new executives to take off from where the former stopped.

“This is what we have been advocating for a long time, we are so excited because we as shipowners would contribute a lot to the economy of this country” Umar stated

On his part, the Managing Director of NNPC Shipping, Mr Panos Gliatis assured that under his watch, the previous discussions and agreements between NIMASA and the NNPC Shipping would be expedited for action.

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