MOFI, PCNGI partner to launch N10 billion fund for CNG conversion

The Ministry of Finance Incorporated (MOFI), Nigerian Consumer Credit Corporation (CREDICORP) and the Presidential Compressed Natural Gas Initiative (PCNGI) on Wednesday signed a partnership agreement to launch a N10 billion Credit Access for Light and Mobility (CALM) fund.

The fund, according to the corporation, is in response to the growing financial strain on Nigerians due to high energy and transportation costs.

At the signing of the agreement in Abuja on Wednesday, the corporations said this new fund aims to provide affordable credit for Nigerians to obtain Compressed Natural Gas (CNG) conversion kits and other energy-saving solutions, making essential services more accessible to Nigerians while promoting sustainability.

It noted the CALM fund offers a lifeline to households and businesses seeking practical ways to manage their high transportation and energy costs.

Through flexible financing options, Nigerians will be able to obtain immediate credit to convert their vehicles to CNG and adopt solar energy solutions reducing dependency on expensive fuels and lowering electricity bills.

Speaking at the launch, the Managing Director/Chief Executive Officer of MOFI, Armstrong Takang, said the programme would address the unintended consequences arising from oil subsidy reforms.

He explained that one of the unintended consequences was the cost of transportation which spiked over the last few months, creating a lot of challenges for many families who were now finding it difficult to move around.

“Through flexible financing options, Nigerians will be able to obtain immediate credit to convert their vehicles to CNG and adopt solar energy solutions reducing dependency on expensive fuels and lowering electricity bills,” he said.

The Programme Director/Chief Executive of PCNGI, Michael Oluwagbemi, said the need for Nigerians to be mobile and enjoy affordable, eco-friendly fuel and reliable transportation made President Bola Tinubu to introduce the Pi-CNG programme.

Mr Oluwagbemi said the president initiated the launch of the conversion incentive programme for the commercial sector, to achieve this for a vast majority of consumers.

“The Consumer Credit Corporation is partnering with us to launch this access for private individuals to access consumer credits to afford the cost of conversion, to enjoy the low cost of CNG and the access it gives for transportation.

“This scheme has the tendency to attract the investment that will enable these conversion kits to be manufactured domestically. Another programme is being coordinated with MOFI, on domestic manufacturing capacity for the CNG sector. I can imagine that an additional 500,000 to a million additional vehicles will be converted because of this program,” he said.

In his remarks, the Managing Director/Chief Executive Officer of CREDICORP, Uzoma Nwagba, said MOFI would aggregate and expand the consortium fund, collaborating with private and institutional investors to grow the initial N10 billion fund.

Mr Nwagba explained that the CREDICORP would act as Fund Manager, using its expertise in consumer credit to manage loan disbursements and offer credit guarantees.

“We are setting aside a fund that will allow Nigerians specifically access credits to convert their vehicles to CNG with one to three years repayment duration. CREDICORP will seed the CALM Fund with N2.5 billion, ensuring that Nigerians can access affordable financing at 15 to 20 per cent per cent interest rate, through Participating Financial Institutions (PFIs).

“People are charged different interest rates depending on their institutions and credit worthiness, financial behavior, earnings and diligence with paying back previously,” he said.

He added that Pi-CNG Ltd would serve as a service provider, facilitating the conversion of vehicles to CNG through authorised centres and offering discounted conversion packages for consumers using CALM loans.

In August last year, Mr Tinubu approved the establishment of the PCNGI.

The government said it intended to make sure that about a million vehicles run on CNG.