FG plans tax holiday for Eko Petrochem

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…As US approves N360m grant

By Adewale Sanyaolu

The Federal Government is considering Eko Petrochem and Refining Company Limited a pioneer status for its modular refinery on Tomaro Island in Lagos, Minister of State for Petroleum Resources, Mr. Ibe Kachikwu, has said.
The Industrial Development (Income Tax Relief) Act Cap 117 LFN 2004 (IDA) defines pioneer status as a trade and commerce incentive provided to companies that provide goods and services in specific delineated sectors of the Nigerian economy, giving them a three-year tax holiday, which may be extended for up to two years.
Kachikwu made the intention of the Federal Government known to stakeholders at the weekend, when the United States Trade Development Agency (USTDA) signed a $1 million (about N360 million) grant with Eko Petrochem and Refining Company Limited for a feasibility study supporting technologies and development of an implementation plan for the 20,000 barrels per day (bpd) crude oil modular refinery in Tomaro Island.
The USTDA helps companies to create US jobs through the export of US goods and services for priority development projects in emerging economies.
Kachikwu said he was working hard to see how the company could be granted a pioneer status and secure various duty waivers, import facilitation of equipment and engineering review. He noted that finance was one of the major challenges facing most of those that had been licensed to build refineries in the country.
Kachikwu was represented by Mr. Rabiu Suleiman, the Executive Director/Coordinator, Nigeria National Petroleum Corporation (NNPC), Refinery, Downstream and Infrastructural Development. He promised that the Federal Government would provide all the necessary support required by the company to make the refinery a reality.
‘‘When you hear that the USTDA is extending its hands of fellowship and support to provide the initial seed funding required to go beyond the detailed engineering design; that also shows that behind him and the vision of this project, there is a partner that is likely to support and provide the financing required to establish the refinery.”
The Chairman, Eko Petrochem and Refining Company, Mr. Emmanuel Iheanacho, said the US government, acting through the USTDA, had accelerated the process of the company’s planned economic investment through the industrial development grant of $797,343.
“We appreciate the USTDA supporting our company’s infrastructure development plans. The funds received will help ensure the timely completion of the proposed development and the attainment of the underlying economic and social impact envisaged,” he said.
Iheanacho said several studies, including the front-end engineering design as well as the environmental impact assessment, had been completed, adding that about $250 million would be required to complete the refinery.

 

 

 

 

 

 

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