The Nigerian Maritime Administration and Safety Agency (NIMASA) has announced plans to commence the disbursement of the $700 million Cabotage Vessel Financing Fund (CVFF) by August 2025. This development marks a significant milestone for indigenous shipowners who have awaited access to this vital fund for over two decades.
Strategic Partnership with Primary Lending Institutions
To ensure effective and transparent distribution, NIMASA will collaborate with a select group of Primary Lending Institutions (PLIs). These institutions will conduct rigorous risk assessments to determine the financial viability of applicants. The expanded list now includes 12 approved PLIs, up from the initial five, reflecting a commitment to broadening access and enhancing the fund’s reach.
Loan Structure and Beneficiary Criteria
Under the new guidelines, eligible indigenous shipping companies can apply for loans of up to $25 million each. The funding structure comprises 50% from NIMASA, 35% from participating banks, and a 15% equity contribution from the shipowners themselves. These loans will feature single-digit interest rates and extended repayment tenures ranging from 15 to 20 years, aimed at reducing financial pressure and fostering long-term sustainability.
To qualify, applicants must be Nigerian citizens or companies wholly owned by Nigerian citizens. Additionally, they are required to provide a minimum equity contribution of 15% of the credit facility requested. The vessels acquired must meet international safety and performance standards, ensuring competitiveness in the global maritime industry.
Government Commitment and Oversight
The disbursement of the CVFF has been identified as a key performance indicator (KPI) for 2025 by the Ministry of Marine and Blue Economy. Minister Adegboyega Oyetola emphasized the government’s commitment to unlocking the sector’s full potential through this initiative. The funds have been domiciled with the Central Bank of Nigeria (CBN) since the implementation of the Treasury Single Account (TSA), awaiting the final disbursement process.
In response to previous delays, the House of Representatives has reaffirmed its support for the disbursement, urging NIMASA to proceed in compliance with extant laws and guidelines. An audit firm, Stratford Hill and Co., has been appointed as the coordinating enforcement auditor for the CVFF to ensure transparency and accountability throughout the process.
This initiative is poised to empower Nigerian shipping companies, reduce dependence on foreign-owned vessels, and stimulate economic growth within the maritime sector. Stakeholders are encouraged to prepare their applications in accordance with the newly established guidelines to benefit from this transformative opportunity.
