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Chinese bank approves $2.5bn loan for AKK gas project

  • NNPC: We’ll repay credit from pipeline revenue, sovereign guarantee

 

The Bank of China has approved the $2.5 billion loan request from the Nigerian Government, to finance construction of the Ajaokuta- Kaduna-Kano (AKK) gas transmission pipeline, which commenced in July.

 

Group Managing Director, Nigerian National Petroleum Corporation (NNPC), Mallam Mele Kyari, made the disclosure yesterday, during an inspection exercise of the AKK pipeline construction ongoing at Ajaokuta in Kogi State.

 

Kyari, who was accompanied by the Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed, explained that the loan, which was only 85 per cent of the total project score, was presently available for disbursement. He added that the remaining 15 per cent was provided by the NNPC as equity from its resources to finance the national project.

 

According to him, the AKK gas pipelines, once completed, would reduce gas emissions into the environment, create new business opportunities, revive moribund industries and create massive wealth along transit towns in Kogi, Niger, Kaduna, Kano states and Abuja.

 

His words: “We have to give a sovereign guarantee to the lender so that the loan is concluded. I am glad to say that the loan has been concluded and very soon, disbursement will start to the contractor. For now, it’s $2.5 billion.

 

So, nothing will stop this project except the act of God. “Payment plan is part of the loan. We will have a moratorium on this loan and as soon as the gas starts flowing this line, the revenue from that line and including existing revenue sales will be used to pay for that loan, so we don’t have any issues around the payment.”

 

Impressed with the work being done by OilServ Limited, the contractor handling first segment of the project, the GMD said: “We have not suffered any major loss of time since we started this project; our pipes are arriving on schedule, they are in the port at Warri and we are moving them to site.

 

“Everything is perfect and we see no fear whatsoever around getting this project completed on time and on schedule. We are in constant touch with this project on a daily basis, this project has not stopped for one day since we started.”

 

On securing the AKK gas pipelines from attacks, he revealed that some measures were being put in place, including deployment of best of technologies and the use of optic fibre lines, in order to aid immediate alert and  prompt response to ensure the pipelines were duly protected.

 

Commending the steady progress recorded thus far despite what she described as a “slowdown in economic activities, the Finance Minister noted that the AKK gas pipeline project was already creating job opportunities, especially for the locals who work side-by-side the contractors on a daily basis. Chairman, OilServ Limited, Emeka Okwuosa, said  about 10 per cent of the AKK project has so far been carried out.

 

He stressed that the engagement of local content, including materials and resources by the company, was almost 100 per cent. “OilServ as a company is 100% representative of local content from engineering to procurement and production.

 

Based on the fact that the loans came from China, the line pipes had to come from China. But apart from that, every other thing comes from Nigeria,” he said.

 

Making reference to the consistent support received from the NNPC, Okwuosa gave assurances that the AKK project would not only be delivered in line with the schedule, but in top quality.

 

“In this particular project, we have the utmost support of NNPC and that is why we are able to move at the pace we are moving. The GMD has taken this project as a pet project, sometimes we feel pressured, but we understand what it means and the reasons for it,” he said.

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