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…Interest pegged at 6.5% for 8 years
…Beneficiaries to provide 15% equity shares
By Steve Agbota
Twenty-three after it was established, the federal government has finally opened the Cabotage Vessel Financing Fund (CVFF) application portal, paving the way for indigenous shipowners to access up to $25 million each in vessel financing.
Plagued by unserviceable and small vessels, local shipowners have locked out of crude oil lifting, leaving the juicy contracts to foreigners amid horrifying annual revenue loss in billions of dollars.
With the portal in place, applications are expected to be processed within 70 to 80 days, with loans priced at a 6.5 per cent interest rate and repayable over an eight-year tenor, in a move aimed at strengthening local shipping capacity and maritime competitiveness.
Speaking at the launch yesterday, the minister of Marine and Blue Economy, Adegboyega Oyetola, said the fund is structured as a revolving facility, meaning beneficiaries are expected to repay loans to sustain future lending.
The aim, he explained, is to reduce foreign dominance in the country’s shipping industry.
The portal, which will be managed by the Nigerian Maritime Administration and Safety Agency (NIMASA), allows eligible Nigerian shipowners to submit applications digitally.
The Minister explained that the digital and rules-based framework ensures that the CVFF is insulated from arbitrariness, opacity and administrative practices that have undermined similar interventions in the past, while reinforcing confidence among investors, financial institutions and indigenous operators.
He urged beneficiaries to meet their obligations fully, ensuring that this intervention remains available not only to current applicants but also to future generations of Nigerian maritime entrepreneurs.
He said the Ministry, in collaboration with NIMASA, is working closely with the Federal Ministry of Finance, the Central Bank of Nigeria, and other key stakeholders to resolve outstanding issues around the CVFF and establish a framework that not only meets national expectations but also adheres to international best practices
In his remarks, the Director General, Nigerian Maritime Administration and Safety Agency (NIMASA), Dayo Mobereola, said the applicable interest rate on the loan was fixed at 6.5 per cent following adjustments by the financial consultant, the agency and the Primary Lending Institutions (PLIs).
According to him, the revised rate reflects the agency’s commitment to easing the financial burden on indigenous shipowners.
However, he said that the shipping industry is capital-intensive and requires long-term, patient capital to thrive, adding that the eight-year repayment window is designed to give shipowners sufficient time to stabilise operations, build confidence, generate revenue and meet their repayment obligations without undue pressure.
He stated that NIMASA has established a dedicated CVFF unit to drive implementation, manage applications, coordinate with financial institutions and ensure strict adherence to eligibility, compliance and risk management procedures.
Presenting details of the disbursement process to stakeholders during the launch of the portal, the Financial Consultant for the CVFF, Buhari Yusuf, said the disbursement of the funds will commence in a few weeks with clear funding ratios, interest rate, timelines and bank participation now defined.
On the timelines, Yusuf said the application and structuring phase, from the applicant through the Primary Lending Institutions (PLIs), including the preparation of a term sheet and notification to NIMASA, is capped at a maximum of 30 days to process.
He said NIMASA’s internal review, issuance of an eligibility certificate and forwarding of applications to the Minister of Marine and Blue Economy for final approval is expected to take about seven days.
Yusuf added that the final approval by the Minister has been allocated a maximum of 30 days, excluding the time taken by applicants to meet conditions precedent for disbursement.
He said once all conditions are met and a disbursement request is submitted by a PLI, NIMASA will release its portion of funds within 72 hours, while the PLIs are expected to immediately deploy the loan to beneficiaries to acquire vessels or other approved maritime assets.
Detailing the process of application, Yusuf explained that applicants seeking access to the fund must present bankable, transaction-based proposals supported by feasibility studies and must also provide equity contributions to demonstrate commitment to the projects being financed.
Yusuf, however, listed the 12 financial institutions pre-qualified to participate in the CVFF framework to include, Zenith Bank, United Bank for Africa (UBA), Union Bank, Taj Bank, SunTrust Bank, Stanbic IBTC, First Bank, Optimus Bank, Lotus Bank, Jaiz Bank, Fidelity Bank and the Bank of Industry (BOI).
