The Nigerian Marítime Administration and Safety Agency (NIMASA) said, each qualifying individual applicant or several applicants to the Cabotage Vessel Finance Fund (CVFF) would get a maximum of $25 million credit facilities.
Nigerian maritime industry stakeholders, especially local ship owners, have been awaiting the disbursement of the Cabotage Vessel Financing Fund (CVFF) since its establishment in 2003. The fund was created to support indigenous ship owners in acquiring vessels and enhancing local maritime capacity. Despite this, actual disbursements have continued to face significant delays.
In December 2022, President Muhammadu Buhari approved the immediate disbursement of approximately N16 billion and $350 million from the CVFF, marking a significant milestone after nearly two decades of anticipation by ship owners. There were also indications that the first disbursements could occur as early as March 2023.
However, ship owners have expressed expectations that the entire fund, estimated at $700 million, should be fully disbursed within six months.
In a Marine Notice titled, ‘Implementation and Disbursement of the Cabotage Vessel Financing Fund (CVFF): Requirements for Applicants,’ sighted by LEADERSHIP, the director general of NIMASA, Dr Dayo Mobereola, said qualified and shortlisted ship owner must provide minimum equity contribution of 15 per cent of the credit facility requested.
According to NIMASA, only Nigerian citizens and shipping companies fully owned by Nigerian Citizens shall be eligible to apply and benefit from the Fund.
“Further to the Marine Notice PROC.11/24/SN01 issued by NIMASA on November 22, 2024 titled, ‘Implementation and Disbursement of the Cabotage Vessel Financing Fund (CVFF): Expression of Interest as a Primary Lending Institution’, on the process of disbursement of the CVFF.
“The CVFF is the Fund set up by the provisions of Section 42 of the Coastal and Inland Shipping (Cabotage) Act 2003 (the “Cabotage Act”) and administered by the provisions of the CVFF Guidelines 2006 (the “CVFF Guidelines”) to promote the development of indigenous ship acquisition capacity by providing financial assistance to Nigerian operators in domestic coastal shipping.
“In line with the provisions of the CVFF Guidelines, only Nigerian citizens and shipping companies wholly owned by Nigerian Citizens shall be eligible to apply and benefit from the Fund.
“To qualify for a loan or guarantee under the CVFF, an applicant shall, as a minimum, prepare a bankable feasibility report which shall be subject to independent verification by an approved Primary Lending Institution (PLI) and NIMASA; Provide the minimum equity contribution of fifteen percent (15%) of the credit facility request.”
The NIMASA management, however, stated that, applications for credit facilities under the Fund shall be routed via a Primary Lending Institution(PLI)
Applicant shall pay all prescribed fees, satisfy the Fund of its managerial and operational ability; agree with a PLI on its involvement in the credit facility request and provide acceptable security/collateral.
Others criteria are, provide evidence of contribution to the Fund; and provide any other requirements as the Fund may demand.
“In addition to the above requirements, Applicants should further note that each qualifying individual applicant or several applicants to the CVFF (whether related by management or ownership) can only be availed a credit facility not exceeding Twenty-Five Million United States Dollars (US$25,000,000.00) or its equivalent in an acceptable currency.
“Applications for credit facilities under the Fund shall be routed via a PLI and the applications shall be subjected to the specified Risk Acceptance Criteria and only qualifying applications shall be allowed access to the CVFF.
“As such, an applicant may be subject to further requirements as may be prescribed by a PLI and approved by NIMASA.
“The list of PLIs can be found on the following link on the NIMASA website and interested applicants should apply through the PLIS,” the agency stated.
