Is funding really key challenge of modular refinery licencees as BoI gets $500m?
For more than three years, several licencees of Modular refineries have failed to show seriousness in rolling out furnace and other key infrastructure in readiness to production having been granted licencees on the basis of the criteria listed for licence approvals.
Whereas several observers trace their inactions to funding, others argue that their inability to rollout is beyond funding capacity, but fears of policy summersault and government’s unfortunate option of importing products rather than fixing moribund refineries.
However, to end the fears driven by paucity of funds, the Bank of Industry (BoI), recently sealed a memorandum of understanding with the Export-Import Bank of China for the provision of a $500m facility towards the establishment of modular refineries in Nigeria.
Over a long time, it is believed that establishment of modular refineries is part of the Federal Government’s plan to end importation of petroleum products and to discourage illegal bunkering activities in the Niger Delta region.
Currently, a total of 38 operating licences have already been granted by the Federal Government to establish modular refineries in the Niger Delta.
Modular refineries are expected to stimulate economic growth, drive investments and provide jobs for Nigerians
In a statement sent by BoI on Sunday to Business Hilights, it explained that the facility would be utilised to finance the purchase of equipment and machinery from China by investors and project owners of modular refineries in Nigeria.
Though the bank saw silent on the key terms and conditions for access, it said the aim was to ensure the availability of refined petroleum products within the country, monetise gas flare, reduce cost of products in the midterm and provide employment for Nigerians.
In his remarks, the Managing Director, BoI, Mr Olukayode Pitan, averred thasaid, “I am delighted to begin the next chapter of a long-term trading relationship with China through CEXIM.
“This agreement is set to create over 100,000 jobs in Nigeria’s oil and gas sector — a decisive move that will advance the Federal Government’s Modular Refineries and Flare Gas Recovery Programme.”
While revealing that about 10 modular refineries were at advanced stages of development in the Niger Delta, BoI added that the facility would ensure that more modular refineries were constructed.
