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Travel & Tourism

Ship owners begin filing for a $700m ship fund

The Nigerian Indigenous Shipowners Association of Nigeria on Monday stated that its members had started applying for the $700m Cabotage Vessels Financing Fund.

The Chairman Advisory Committee of NISA on CVFF, Dr Edward Sowho, told our correspondent during a telephone chat in Lagos that members of the association had started negotiations with the five primary lending institutions on the best rates they can get.

According to him, disbursement of the fund has not started.

This is coming days after the House of Representatives Committee on Nigerian Content Development and Monitoring approved that the Nigerian Maritime Administration and Safety Agency can commence the disbursement of $700m from the Cabotage Vessel Finance Fund.

Recall that the House last month instructed NIMASA to stop its plan to disburse the fund.

We are interfacing with the PLIs, negotiating with them on the best rate we can get in terms of duration, moratorium and interest rates. Those are the discussions going on now with the PLIs. And we are putting together our proposal because we have to submit our application with a detailed business plan. There is no disbursement yet from anyone,” Sowho explained.

He said before the fund would be disbursed, a minister should be in office, stressing that the fund would soon be disbursed.

We are engaging the PLIs; we are preparing our documents to submit our applications. We are applying as a group because NISA has a shipping line and individual members can also apply. The application has started but there is no disbursement for now. I believe that very soon there would be disbursement,” Sowho enunciated.

According to him, the maximum amount an applicant can get is $25m per shipping line.

“You can ask for less than that if your application is considered worthy. People want to buy strong vessels. And with $25m, you can get a good vessel that is less than 10 years old but it would not be a brand-new vessel. If you are looking at a medium-range vessel from 30,000 to 45,000 tonnes, it is more than $25m. Do not forget that the total money is not much because if you add everything, the total is just over $700m. So, there is a limit to the amount an individual can get.

“The maximum they can give an individual is $25m but as a group, I do not know the maximum. Even as a group, you will have to set up a shipping line and I am sure they will treat a group as a unit,”  he noted

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