UBA, Domgas Seals N47 billion LPG Deal
CEO of Domgas, Mr. Olufemi Ifayemi revealed this at the recent inauguration of the Lagos LPG Mega Cooperative Society in Lagos.
The bank will make N47 billion available for 1,000 LPG skid stations in Lagos and investors will be able to buy into each station at the cost of N47 million via a structured flexible payment plan.
Ifayemi said, “After wide deliberations among the promoters of this massive project, we concluded it would be advisable to form a mega cooperative if the project is to be successful. We felt it would be difficult to deal with individuals owing to the huge capital involved in the project and so had to moot the idea of bringing small cooperatives and micro-finance houses together to form a mega cooperative society.
“Our target is to have about 1000 beneficiaries within the cooperative society owning containerised LPG skid stations in strategic locations in the state as a way of enhancing the goal and aspiration of making LPG a fuel of choice in the state. The society is to help in regulating the pricing, distribution and safety of the product as well as handling issues bordering on advertising, welfare and profitability for its members,” he explained.
“The banker of the project, UBA has put in place a financing and payment structure that would make it easier and less burdensome for whoever wants to acquire and pay for the skid station. The initial deposit required for procuring the station is N7m which the bank has pledged to make available for those unable to raise this amount provided they are able to produce an equity contribution to prop it up. The remaining N40 million which attracts no form of interest is to be paid installmentally within 36-50 months to the bank for warehousing. This payment plan is geared towards relieving the beneficiaries the pain of acquiring and paying for the stations,” he added.
Each skid station is expected to sell 30 metric tonnes of LPG monthly and will also be provided 1000 composite (plastic) cylinders annually for free distribution to customers in order to encourage the use of gas as opposed to kerosene.
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