With the cost of converting vehicles and obtaining Compressed Natural Gas (CNG) conversion kits ranging between N500,000 and N1.2 million depending on vehicle type, embracing the CNG initiative is seemingly above the reach of many Nigerians.
To address this, the Federal Government through the Ministry of Finance Incorporated (MOFI), Nigerian Consumer Credit Corporation (CREDICORP) and the Presidential Compressed Natural Gas Initiative (PCNGI) recently signed a partnership agreement to launch a N10 billion Credit Access for Light and Mobility (CALM) fund.
Read also: FG directs marketers to open pumps for CNG vehicles
Purpose of CALM fund
The fund is in response to the growing financial strain on Nigerians due to high energy and transportation costs.
It is aimed at providing affordable credit for Nigerians to obtain CNG conversion kits and other energy-saving solutions, making essential services more accessible to Nigerians while promoting sustainability.
It also provides 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.
The fund is a collaboration among private and institutional investors to grow the initial N10 billion fund. Beneficiaries who are expected to apply on the website will access credits to convert their vehicles to CNG with one to three years of repayment duration.
According to Uzoma Nwagba, the CEO of CREDICORP, with a N2.5 billion seed from the organisation, the fund will ensure that Nigerians can access affordable financing at 15 to 20 percent interest rates, through Participating Financial Institutions (PFIs).
Beneficiaries will be charged different interest rates depending on their institutions and creditworthiness, financial behaviour, earnings and diligence in paying back previously.
According to Armstrong Takang, the managing director of MOFI, 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 several months, creating a lot of challenges for many families who now find 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.
For Oluwagbemi Michael, the programme director, PCNGI, the fund is aimed at providing access for private individuals to access consumer credits to afford the cost of conversion, enjoy low cost of CNG and boost cheap transportation.
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