China okays $2.6bn loan for Ajaokuta-Kaduna-Kano gas pipeline

China has approved $2.6bn loan for Nigeria’s Ajaokuta-Kaduna-Kano gas pipeline project.

This was announced by the Federal Government announced on Tuesday with a plan to disburse the 85 per cent loan required to fund the project.

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 project whose construction was inaugurated 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 the NNPC, will provide 15 per cent equity.

Brentex/China Petroleum Pipeline Bureau-CPP Consortia and Oilserve/China First Highway Engineering Company-CFHEC Consortia were also named as the engineering procurement and construction contractors for the project.

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.

Kyari also said nothing would stop the project except force majeure.

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.

He also said, “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 would include the deployment of optic fibre lines running 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.