FG unveils N10bn plan to boost CNG usage through consumer credit
The Federal Government on Wednesday unveiled a N10 billion plan that would boost the conversion of about one million additional vehicles to compressed natural gas usage and the adoption of solar energy through the provision of consumer credit to income earners.
To achieve this, the Ministry of Finance Incorporated, MOFI, Nigerian Consumer Credit Corporation, Credicorp, and the Presidential Initiative on Compressed Natural Gas, PICNG, have signed a deal that would make N2.5 billion fund available to finance the conversion of vehicles to CNG by private individuals.
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The fund, known as the Credit Access for Light and Mobility (CALM) Fund, will provide affordable credit for Nigerians to obtain CNG conversion kits and other energy-saving solutions, making essential services more accessible to Nigerians while promoting sustainability.
Speaking at the signing ceremony in Abuja, Managing Director, MOFI, Dr. Armstrong Takang said the fund will enable Nigerians to obtain loans through Participating Financial Institutions, PFIs, providing a pathway to sustainable energy without the financial burden of upfront costs.
Takang disclosed that MOFI will aggregate and expand the consortium fund, collaborating with private and institutional investors to grow the initial N10 billion fund.
He explained that the fund is one of the measures being put in place to solve the unintended consequences of petrol subsidy removal which has led to a spike in the cost of transportation and high tariffs in the electricity sector.
“The good news is that the Federal Government has a solution to that which is the CNG programme but we also recognize the fact that it is not possible for us to have to pay for everything up front especially for items that are capital intensive.
“That is why the Federal Government came up with the programme of consumer credit and we established the Nigerian Consumer Credit Corporation, Credicorp. We believe Credicorp is very important as Nigerians. We do not need to have to afford the total amount to buy the basic items that we need every day whether it is in terms of trying to convert our cars to CNG, or having to pay for the conversion kit upfront. It is capital intensive and most people cannot afford it, yet they need it.
“The government has provided an opportunity to have access to credit to afford items such as that. We also have major challenges with the increase in electricity in our homes. Most of us are paying more now and it is creating a challenge in terms of affordability. The fund will also allow Nigerians to acquire credits for solar systems”, he stated.
Also speaking, the Director/CEO of PICNG, Engr. Michael Oluwagbemi said the fund will address the high cost of mobility by creating an avenue to convert their vehicles to CNG without having to pay for it immediately.
“Credicorp is partnering with us to launch this access for private individuals to afford the cost of conversion and the cost of conversion is quite elevated given our current realities. Beyond immediate access to consumer credit to access this conversion kit and conversion at PICNG accredited conversion centres through the PFIs, this also in the long run will encourage domestic manufacturing of the kits”, he stated.
Engr. Oluwagbemi noted that with the deal, the programme expects an additional 500,000 to one million vehicles to be converted in the coming months besides the initial one million vehicles target set at the beginning of the programme.
On his part, Managing Director, Credicorp, Engr. Uzoma Nwagba said the goal is to enable people to have a better life by accessing goods and services that they would normally have to save up for.
Nwagba said the programme is tailored for Nigerians with a steady income stream, such as workers in both public and private sector, as well as business owners.
He pointed out that the programme would boost the demand side CNG conversions and solar panels, ensuring that producers have markets for their products across the country.
