The Ministry of Finance Incorporated (MOFI) has partnered with key stakeholders to introduce the Credit Access for Light and Mobility (CALM) Fund, a N10 billion credit initiative to support Nigerians in converting their vehicles to Compressed Natural Gas (CNG).
The new initiative is in collaboration with the Nigerian Consumer Credit Corporation (CREDICORP) and the Presidential Initiative on Compressed Natural Gas (Pi-CNG).
Dr. Armstrong Takang, MD/CEO of MOFI, highlighted that the initiative is designed to address the challenges posed by recent oil subsidy reforms, which have significantly impacted transportation costs.
He said, “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 were finding it difficult to move around.”
About the CALM Fund
The CALM Fund will enable Nigerians to access loans for CNG conversion kits and energy-saving solutions through Participating Financial Institutions (PFIs).
Mr. Uzoma Nwagba, Managing Director and CEO of CREDICORP, stated, “We are setting aside a fund that will allow Nigerians specifically access credits to convert their vehicles to CNG with one to three years repayment duration.”
CREDICORP will seed the fund with N2.5 billion, allowing loans to be issued at interest rates between 15% to 20%, depending on the borrower’s creditworthiness.
Nwagba emphasized that “people are charged different interest rates depending on their institutions and credit worthiness, financial behavior, earnings and diligence with paying back previously.”
CNG conversion support
The Pi-CNG will facilitate the conversion of vehicles to CNG through authorized centers, offering discounted packages for consumers using CALM loans.
Sir Michael Oluwagbemi, CEO of Pi-CNG, noted that the initiative aims to provide affordable, eco-friendly fuel options, stating,
“The need for Nigerians to be mobile and enjoy affordable, eco-friendly fuel and reliable transportation made President Bola Tinubu introduce the Pi-CNG programme.”
Oluwagbemi added that the partnership with CREDICORP would help private individuals access credits for vehicle conversions, enhancing mobility and affordability.
Through the CALM Fund, Nigerians can now obtain immediate credit to convert their vehicles to CNG, reducing their dependency on more expensive fuels.
Nigerians are encouraged to explore this opportunity by applying for CALM Fund loans through participating financial institutions (http://credicorp.ng/apply).
Specific accredited PCNGI conversion centers will also be actively marketing this credit option to their customers.
What you should know
In Lagos, private vehicles, the cost of conversion can vary widely. At MBH Power Limited, the price for converting a four-plug vehicle is N1.3 million, while a six-plug conversion costs N1.5 million. Notably, converting multiple vehicles at once can yield a discount of N50,000 per vehicle.
- Commercial vehicles can access free CNG conversions at six approved centers under the PCNGi to reduce fuel expenses for commercial vehicle owners.
- To qualify for this program, vehicles must be registered with either the Road Transport Employers’ Association of Nigeria (RTEAN), the National Union of Road Transport Workers (NURTW), or must be state-owned taxis and vehicles with commercial plate numbers.
- At Autogig, pricing depends on various factors, including the type of vehicle, engine cubic capacity, and the size of the CNG cylinder, which can range from 35 liters to 200 liters. On average, the conversion costs range from N1 million to N1.7 million, depending on these specific factors.
The introduction of the CALM Fund provides a pathway for motorists to secure loans for these conversions, alleviating the financial burden of upfront costs.
