The Minister of Marine and Blue Economy, Adegboyega Oyetola, has directed the Nigerian Maritime Administration and Safety Agency (NIMASA) to initiate the process for the long-awaited disbursement of the Cabotage Vessel Financing Fund (CVFF).

Further to its earlier Marine Notice PROC.11/24/SN01 issued on 22 November 2024 (Implementation and Disbursement of the Cabotage Vessel Financing Fund (CVFF): Expression of interest as a Primary Lending Institution) on the process of disbursement of the CVFF, NIMASA has issued Marine Notice MN 03/25/SN01, specifying the minimum qualifications for a loan or guarantee under the CVFF.

The CVFF is a Fund set up by the provisions of Section 42 of the Coastal and Inland Shipping (Cabotage) Act 2003 (the “Cabotage Act”) and administered pursuant to the provisions of the CVFF Guidelines 2006 (the “CVFF Guidelines”) to promote indigenous ship acquisition capacity by providing financial assistance to Nigerian operators in domestic coastal shipping.

In line with the provisions of the CVFF Guidelines, only Nigerian citizens and shipping companies wholly owned by Nigerian Citizens shall be eligible to apply and benefit from the Fund.

To qualify for a loan or guarantee under the CVFF, an applicant shall:

1. Prepare a bankable feasibility report which shall be subject to independent verification by an approved Primary Lending Institution (“PLI”) and NIMASA;
2. Provide the minimum equity contribution of fifteen percent (15%) of the credit facility request;
3. Pay all prescribed fees;
4. Satisfy the Fund of its managerial and operational ability;
5. Agree with a PLI on its involvement in the credit facility request;
6. Provide acceptable security/collateral;
7. Provide evidence of contribution to the Fund; and
8. Provide any other requirements as the Fund may demand.

In addition to the above requirements, applicants should further note that:

i. Each qualifying individual applicant or several applicants to the CVFF (whether related by management or ownership) can only be availed a credit facility not exceeding Twenty-Five Million United States Dollars (US$25 million) or its equivalent in an acceptable currency.

ii. Applications for credit facilities under the Fund shall be routed via a PLI and the applications shall be subjected to the specified Risk Acceptance Criteria and only qualifying applications shall be allowed access to the CVFF.

As such, an applicant may be subject to further requirements as may be prescribed by a PLI and approved by NIMASA.

The list of PLIs can be found on NIMASA’s website

Interested applicants should apply through the PLIs.

Qualifications

The contents herein are meant for the general information of our clients and friends and do not amount to legal advice. Adepetun Caxton-Martins Agbor & Segun (Dentons ACAS-Law) accepts no responsibility for any loss or damage that may arise from reliance on information contained in this publication. All enquiries may be made to Chisa Uba chisa.uba@dentons.com or Nnagozie Azih nnagozie.azih@dentons.com.