China has approved and will disburse its 85 per cent loan required to fund the $2.6bn Ajaokuta-Kaduna-Kano gas pipeline project, the Federal Government announced on Tuesday.
Minister of Finance, Budget and National Planning, Zainab Ahmed, and Group Managing Director, Nigerian National Petroleum Corporation, Mele Kyari, announced this during the inspection of the project in Ajaokuta, Kogi State.
The AKK pipeline project, flagged off in July this year, is 85 per cent funded by the Bank of China and Sinosure, a Chinese export and credit insurance corporation, while the Federal Government, represented by NNPC, provides 15 per cent equity.
Brentex/China Petroleum Pipeline Bureau-CPP Consortia and Oilserve/China First Highway Engineering Company-CFHEC Consortia were announced as the Engineering Procurement and Construction contractors for the project.
Speaking on the side-lines of the project inspection on Tuesday, Ahmed said, “We have to give a sovereign guarantee to the lender so that the loan is concluded.
“I’m glad to say that the loan has been concluded and very soon, the disbursement will start.”
She said the project was being delivered on time and on course, adding that despite the slowdown in economic activities, the project had not slowed down and work had not stopped for one day.
“We are glad that gas is being piped across this line from Ajaokuta to Kaduna to Kano. This will help to revive industries in those parts of the country and create jobs,” Ahmed said.
On his part, Kyari said nothing would stop the project except force majeure or an act of God.
This, he said, was because the Bank of China had approved the loan and the project would continue till its financial close.
“This project has not stopped for one day since it started. We will complete this project on time, on schedule and on cost. We will deliver this project,” he said.
On the composition of the loan for the project, the NNPC boss said, “We borrowed money, 85 per cent of the total project scope as loan and then we provided 15 per cent as equity from NNPC’s own resources.
“So the 85 per cent that will come from our Chinese partners will be available for draw down.”
He said security was being built around the pipeline, which include the deployment of optic fibre lines that would run parallel to the pipeline such that at any infraction, the corporation would know about it and respond.
“More importantly we are using the best of technology so that we will bury the pipes deeper than normal and we don’t think that there is any high level of risk associated with this pipeline,” Kyari said.
On repayment of the Chinese loan, he said it was part of the loan plan, adding that as soon as gas starts flowing through the line, the revenue from it including existing revenue streams would be used to pay the loan.
– Punch