China Assures On $2.8bn Funding for Ajaokuta-Kaduna-Kano Project

China Assures On $2.8bn Funding for Ajaokuta-Kaduna-Kano Project

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Post Views: 464 The Nigerian National Petroleum Corporation (NNPC), on Monday said it is looking at performing the groundbreaking ceremony of the Ajao...

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The Nigerian National Petroleum Corporation (NNPC), on Monday said it is looking at performing the groundbreaking ceremony of the Ajaokuta-Kaduna-Kano (AKK) gas pipeline project, following a guarantee of the $2.8bn project cost by the China National Petroleum Corporation (CNPC).
A statement by Ndu Ughammadu, spokesman of the corporation in a statement on Monday evening said CNPC assured NNPC’s Group Managing Director, Dr. Maikanti Baru, of its unflinching commitment towards securing funding for the successful financing and subsequent execution.
The commitment to actualize the project was revealed during a high-level meeting between the NNPC and CNPC management on the sidelines of the Forum on China-Africa Cooperation (FOCAC) Summit in Beijing, China.
The the 40-inch x 614km pipeline, the statement assured, would enable connectivity between the East, West and North that is currently non-existent, besides enabling gas supply and utilization to key commercial centres in the northern corridor of Nigeria with the attendant positive spin-off on power generation and industrial growth.
A total 85% of financing for the project described as the single biggest gas pipeline in the history of oil and gas operations in Nigeria is expected to be funded by financiers like Industrial and Commercial Bank of China (ICBC), Bank of China, and Infrastructure Bank of China with Sinosure, China’s Export Credit Agency (ECA) providing insurance cover. The remaining 15% will be provided by the contractors which include Oilserve/Oando consortium, as well as Brentex/China Petroleum Pipeline (CPP) Bureau consortium.
Speaking on behalf of over six CNPC subsidiaries at the meeting, its Assistant President and Board Member, Wang Shihong, expressed “full support of Nigeria’s quest to deliver the AKK project. We are working relentlessly towards securing funding for the project based on regulations and policies of Chinese financial institutions.”
Shihong also pledged to fully support his company’s subsidiary, CPP Bureau, partner in the AKK Project, to ensure success of the initiative.
Responding, Dr. Baru stated that the AKK Project was dear to Nigeria, adding that while at the FOCAC Summit, President Muhammadu Buhari reiterated the potentials of the project to strengthen Nigeria-China relations.
He added that the NNPC was looking forward to a successful close-out of the project’s financing towards official groundbreaking ceremony in October, this year.
“We want to maximize the construction work before the end of the year. We are hoping for the quick resolution of the financing agreements so that we will kick-start the project in October, when the dry season begins,” Baru added.
Also speaking, Executive Vice Chairman of Brentex, one of the contractors handling Lot 3 of the project, Sani Abubakar, said since signing the Engineering, Procurement and Construction (EPC) contract, tremendous progress had been made towards securing financing for the project.
He particularly commended Dr. Baru for driving the project, adding that following his leadership, some of the elements that were not part of the process were brought in, including providing financing for early works.
Also speaking, Chairman of Oilserve, one of the contractors handling Lot 1 of the project, Dr. Emeka Okwuosa, said they had already gone into some agreements with Brentex/CPP consortium on financing, which in the end, will bring the project under a single financing arrangement.

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