FG launches N2.5bn CALM scheme to boost local manufacturing of CNG conversion kits

Oredola Adeola

The deployment of Compressed Natural Gas (CNG) in Nigeria has suffered setbacks due to widespread racketeering and a persistent shortage of CNG vehicle conversion kits.

 Advisors Reports in a recent finding revealed that since November of the previous year, there has been no significant improvement in the availability of conversion kits, raising concerns about the government’s commitment to the objectives of the Presidential Compressed Natural Gas Initiative (PCNGi).

The scarcity is further exacerbated by the fact that the majority of CNG conversion kits used in the country are still imported, despite their relatively simple production process.

Recall that the government’s had earlier promised to provide one million conversion kits—free for the commercial sector and at discounted rates for private vehicle owners.

Advisors Reports’ findings showed that despite growing interest in CNG conversion, the lack of conversion kits has led to a substantial backlog.

The shortage has therefore led to racketeering within the supply chain, as well as corruption and exploitation by some conversion centers, further worsening the challenges associated with CNG adoption.

Operators of some of the conversion centres informed our correspondent that the shortage has undermined consumer confidence and impeded progress toward transitioning Nigeria to cleaner and more affordable energy sources.

Several conversion centres in Ogun, Lagos, and Ibadan, Oyo States, have confirmed the scarcity of conversion kits.

They disclosed that there are backlogs of conversion requests still pending, while new requests are being declined due to the limited availability of kits.w

Meanwhile, the Federal Government has introduced the N2.5 billion Credit Access for Light and Mobility (CALM) scheme.

The initiative, according to the Presidential Compressed Natural Gas Initiative (PCNGi) was designed to encourage the conversion of vehicles to Compressed Natural Gas (CNG) and promote the local manufacturing of CNG kits.

The PCNGi in a statement released over the weekend, stated that the government’s commitment to easing energy and transportation costs in Nigeria.

The PCNGi revealed that the introduction of the N2.5 billion CALM initiative, aims to ease financial pressures on Nigerians amid rising energy and transportation costs.

“The Federal Government has introduced a N2.5 billion Credit Access for Light and Mobility (CALM) initiative to alleviate financial pressures on Nigerians amid rising energy and transportation costs,” the statement read.

Advisors Reports gathered that the initiative was launched as parts of collaboration between the Ministry of Finance, Credicorp, and the Presidential Compressed Natural Gas Initiative (PCNGi).

It is designed to provide affordable credit options for Nigerians to adopt Compressed Natural Gas (CNG) solutions.

Michael Oluwagbemi, the Program Director and CEO of PCNGi, in his statement said, “This kind of initiative has the potential to attract the necessary investments for domestic production of CNG conversion kits, fostering self-reliance and economic growth.

“We have another program down the road also on domestic manufacturing capacity for the CNG sector.

“I can assure you that this program will not just deliver consumer credit to Nigerians, but we also encourage these products to be made in Nigeria, driving job creation as well as lowering energy costs for all Nigerians,” he said.