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How to Apply -BOI CBN Intervention Funds for Power & Airline, Manufacturing Refinancing Banks

BOI/CBN Intervention Funds 

Bank of Industry is Nigeria’s oldest, largest and most successful Development Finance Institution (DFI). Incorporated in 1959 as Investment Company of Nigeria (ICON), transformed into Nigerian Industrial Development Bank in 1964 and ultimately into Bank of Industry (BOI) in 2001.

Consequently, BOI’s mandate is the transformation of Nigeria’s industrial sector by providing financial and advisory support for;

  1. the establishment of large, medium and small projects/ enterprises, and
  2. the expansion, diversification, rehabilitation and modernisation of existing enterprises.

CBN INTERVENTION FUNDS GUIDELINES AND REQUIREMENTS FOR-

  • N235 BILLION CBN INTERVENTION FUND FOR MANUFACTURING RE-FINANCING AND RESTRUCTURING FACILITIES OF BANKS’ LOANS.
  • N300 BILLION CBN POWER AND AIRLINE INTERVENTION FUND (PAIF)

 

N235 BILLION CBN INTERVENTION FUND FOR MANUFACTURING RE-FINANCING AND RESTRUCTURING FACILITIES OF BANKS’ LOANS.

These Guidelines relate to the N235 billion intervention fund for re-financing and restructuring of banks’ loans to the manufacturing sector (The Fund).

1. Objectives of the Fund
The objectives of the Fund are to:

i. Fast-track the development of the manufacturing sector of the Nigerian economy by
improving access to credit to manufacturers.
ii. Improve the financial position of the Deposit Money Banks (DMBs)
iii. Increase output, generate employment, diversify the revenue base, increase foreign
exchange earnings and provide inputs for the industrial sector on a sustainable basis.

2. Managing Agent / Participating Banks

i. Managing Agent: BOI, responsible for the day to day administration of the Fund
ii. Participating Banks: All Deposit Money Banks and Development Finance Institutions
(DFIs) excluding the Bank of Industry (BOI).

3. Types of Facilities (excluding Trading activities)

i. Long term loan for acquisition of plant and machinery
ii. Refinancing of existing loans Resuscitation of ailing industries
iii. Refinancing of existing lease
iv. Working capital

4. Loan Features

i. Loan Amount : Maximum of N1 billion for a single obligor in respect of
refinancing/restructuring
ii. Loans shall have a maximum tenor of 15 years terminating on 31st July, 2025
iii. Working capital facility of one year with provision of roll over for a maximum of 3 years.
iv. The Fund allows for moratorium in the loan repayment schedule.
v. Interest Rate: All-in Interest rate/charge of 7 percent per annum payable on quarterly basis.

5. Application Procedures (BOI CBN intervention funds)
i. Submission of Requests

A PB shall submit a request, on its behalf or on behalf of other parties in the case of
syndication or other arrangements, in the prescribed format on behalf of the project
promoters. In the case of syndication or other arrangements, BOI shall deal directly with
the lead bank only on all issues relating to such application.

ii. Required Documentation
Each request must be accompanied by the following documents:

 Request from the customer seeking for such refinancing and/or restructuring
 Latest financials of the obligor (management accounts will be acceptable in lieu of
updated accounts
 Copies of duly executed offer documents between the bank and the loan obligor
evidencing existence of a facility
 6 months account statements showing the current exposure
 An abridged business plan or feasibility study of the underlying project for which the
facility was initially approved. The plan must include the projects cash flow projections
detailing the repayment schedule.
 Certificate of Incorporation evidencing the incorporation of the Company with the
Corporate Affairs Commission
 An on-lending agreement shall be signed between BOI and each bank at this time
 Eligible securities shall include the following:
Nigerian Treasury Bills
FGN Bonds
Other Bonds backed by the guarantee of the Federal Government
Any other securities acceptable to the CBN

iii. Approval Process (BOI cbn intervention funds)

The recommended applications that have fulfilled all the laid down criteria shall be
forwarded to the Management of the Central Bank of Nigeria for final approval.

N300 BILLION CBN POWER AND AIRLINE INTERVENTION FUND (PAIF)

1. Objectives of the BOI cbn intervention funds Fund
The objectives of the Fund are to:

i. fast-track the development of electric power projects, especially in the
identified industrial clusters in the country;
ii. fast-track the development of the aviation sector of the Nigerian economy by
improving the terms of credit to Airlines;
iii. improve power supply, generate employment, and enhance the living
standard of the citizens through consistent power supply;
iv. provide leverage for additional private sector investments in the power and aviation sectors.

2. Managing Agent /Technical Adviser (TA) / Participating Banks

i. Managing Agent: Bank of Industry (BOI), responsible for the day to day
administration of the Fund
ii. Technical Adviser: Africa Finance Corporation (AFC), the TA to the Fund.
iii. Participating Banks: All Deposit Money Banks and Development Finance
Institutions (DFIs) excluding the Bank of Industry (BOI).

3. Types of Facilities

i. Long term loans (for new Power Projects)
ii. Refinancing of existing loans (Power and Airline Projects)
iii. Refinancing of existing leases (Power and Airline Projects)
iv. Working capital (for existing Power and Airline Projects only)
v. Refinancing of Aircraft Hangar projects.

4. Amount / Tenor

i. The Fund facility shall not be more than 70 percent of the total cost of the project.
ii. The Fund loans shall have a maximum tenor of 15 years as determined by the
project’s cash flow profile not exceeding 31st July, 2025.
iii. Working capital facility shall be of one year duration with provision for roll-over but
not more than 5 years.
iv. The Fund allows for moratorium in the loan repayment schedule.
v. The moratorium on principal shall depend on the type and nature of the project and
shall not exceed either the construction period of the project.

5. Application Procedures
i. Submission of Requests

A PB shall submit a request, on its behalf or on behalf of other parties in the case
of syndication or other arrangements, in the prescribed format on behalf of the
project promoters. In the case of syndication or other arrangements, BOI shall
deal directly with the lead bank only on all issues relating to such application.

ii. Required Documentation

Each request must be accompanied by the following documents:

i. Request from the project promoter seeking such loan and/or
refinancing/restructuring;
ii. Last 3 years financials of an existing company;
iii. Feasibility study/business plan of the project;
iv. Relevant permits/approvals;
v. Off-take and other relevant agreements;
vi. Environmental impact assessment report;
vii. Copies of duly executed offer documents between the bank and
the company evidencing existence of a facility in the case of
refinancing; viii. Six (6) months account statements showing the current exposure (if any); ix. Certificate of incorporation evidencing the incorporation of the
company with the corporate affairs commission; and
x. List of directors of the company (form co7) xi. Other documents as may be required by the TA to facilitate the appraisal process.

iii. Approval Process

The recommended applications that have fulfilled all the laid down criteria
shall be forwarded to the Management of the Central Bank of Nigeria for
final approval.

iv. Security to be offered by PBs
The following securities shall be offered:

i. The security to be provided by PBs to BOI shall be a bank guarantee
backed by a payment order for the PB’s account to be debited by the
CBN for any amount due should the PB default.
ii. Legal agreement between BOI and PB for BOI to have the rights to
realize security pledged by project promoters.
iii. BOI to have lien on the project cash flows.
iv. A deed of assignment of the assets of the project in favour of BOI

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