The People’s Republic of China has endorsed 85% of the credit needed to finance the Ajaokuta-Kaduna-Kano (AKK) gas pipeline project and will disburse the fund soon, Minister of Finance, Budget and National Planning Zainab Ahmed said on Tuesday.
Mrs Ahmed made the disclosure during an inspection of the AKK project in Ajaokuta, Kogi State, accompanied by Mele Kyari, the group managing director of the Nigerian National Petroleum Corporation (NNPC).
The 614-kilometre gas pipeline project will be 85% funded by China and Sinosure, a Chinese export and credit insurance firm through counterpart funding, while the Nigerian government, through the NNPC, will provide the balance of 15%.
Brentex/China Petroleum Pipeline Bureau-CPP Consortia and Oilserve/China First Highway Engineering Company-CFHEC Consortia have been announced as the Engineering Procurement and Construction contractors for the AKK project.
“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,” Ahmed said.
She added that the pipeline development was being executed on time, noting that the slowdown in economic activities had not impeded work.
“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.”
Meanwhile, Kyari assured that nothing would stop the AKK project except a force majeure or an act of God, considering that China had approved the loan and works 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.
“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,” Kyari said.
The NNPC chief observed that security was being deployed around the pipeline, including optic fibre lines that would run parallel to the pipeline network in a way that, at any infraction, the NNPC 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.”
The loan is expected to be repaid from the revenue to be made from the gas to be supplied once the AKK pipelines become operational as well as from current revenue streams, according to Kyari.
(Ripples Nigeria)
