Petroleum Africa
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Wednesday, March 27, 2019
One of Royal Dutch Shell’s Nigerian units, Shell Petroleum Development Company of Nigeria Limited (SPDC), signed a contractor support fund of $200 million with the United Bank for Africa (UBA). Under the partnership agreement, the bank will provide loan facilities to the oil company’s local vendors and suppliers.
Shell’s contractor support fund provides support for contractors to finance projects for Shell companies in Nigeria in line with the aspirations of the Nigerian Content Act. Contractors and suppliers who have a valid purchase order and meet the bank’s risk assessment criteria will have access to the fund. Potentially, this support fund will boost their financial capacity and enable them to improve their operations.
According to SPDC, “findings indicate that lack of access to capital hinders many Nigerian companies from competing for and executing contracts effectively.” To this effect, the company aims to increase participation of host communities in its value chain through the funding.
In 2016 Shell signed a $2.2 billion MoU with seven Nigerian lenders aimed at providing local vendors financial support. According to the company, about $1.5 billion worth of loans have since been given to over 300 small and medium sized businesses who either supply to Shell Nigeria or serve as vendors to the company’s products.
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