The Chairman, Senate Committee on Petroleum Resources (Upstream), Omotayo Alasodadura, on Tuesday said there was no law backing the establishment of the proposed Development Bank of Nigeria, DBN.

The senator was speaking during a panel discussion on the topic ‘‘How will New Legislation and Policy Develop the Oil and Gas Industry’’ at the ongoing Nigerian Oil and Gas (NOG) 2017 conference in Abuja.

During the discussion, the Executive Secretary of the Nigerian Content Development and Monitoring Board, NCDMB, Simbi Wabote, was speaking on plans to establish a unit of the bank in Yenagoa, Bayelsa State, to cater for the funding needs of indigenous oil companies, when the senator quickly interjected, saying there was no such thing as DBN.

“Let me inform you, NCDMB and other stakeholders in the oil and gas industry, that as we speak today, there is nothing like DBN. There is no law setting it up. We have not got such a bill sent to us to consider the establishment of such a bank,” Mr. Alasodadura said.

While articulating the concerns of oil and gas industry on funding constraints, the NCDMB scribe had alluded to the initial plans by government to establish a Local Content Bank to guarantee financing for local content development in the industry.

However, he said in view of how long it may take to realise that objective, the NCDMB was considering the establishment of a unit of NDB to provide indigenous oil and gas operators with funding at eight percent over a five year period to help them operate.

“Funding is a major constraint faced by most indigenous operators who mostly get loans at double digits from commercial Banks, hence making it difficult to compete with IOCs (international oil companies) that have access to cheap funds and also get support from their home countries,” Mr. Wabote said.

He explained that the objective of establishing a unit of NDB was not to make profit, but make access to credit available for indigenous players much easier.

At the end Mr. Alasoadura advised the NCDMB scribe to go ahead with its initial plan to establish a Local Content Bank, rather than wait for the NDB that was not in existence, saying the Senate would be willing to pass the LCB bill as quickly as possible to help grow capacity for indigenous operators in the oil and gas industry.

Recently, the Minister of Finance, Kemi Adeosun, had spoken of plans by government to establish a development Bank of Nigeria to be funded with up to $1.3 billion (N396.5 billion).

She said the funds would be jointly provided by the World Bank, KfW (the German Development Bank), the African Development Bank, and the AFD (the French Development Agency).

The ministry had given an indication that agreements for the establishment of the DBN, which was conceived in 2014 under former President Goodluck Jonathan, was being finalized with the European Investment Bank (EIB) for more funding.

However, the take-off of the bank has been bogged down by controversies, despite the promise by the present administration that it would still meet the target of 2017 for its final take-off.

On Monday, Mrs. Adeosun rekindled hope of the possibility of the bank coming on stream soon when she disclosed that issuance of the operating license for DBN was imminent.

The minister, who was speaking during a Board/Management/Development partners’ retreat of the DBN in Abuja, said the federal government was ready to provide support for the bank, provide the capacity to galvanise the Small and Medium Scale Enterprises, SMEs, sector for the overall development of the nation’s economy.

The inaugural strategy retreat was organized by the bank’s development partners and incoming management team and board of directors to prepare it for immediate operation when the Central Bank of Nigeria, CBN would issue its operational license.

“The present administration is aware of the role of SMEs in national economy, hence the resolve to position the DBN as a catalyst for the development of the SMEs,” she said.