The federal government (FG) has secured a $2.5 billion loan from China to fund the Ajaokuta-Kaduna-Kano (AKK) gas pipeline project in the country.
President Buhari had flagged off the $2.8 billion 614 kilometre pipeline with capacity to transport 2.2 billion cubic feet of gas per day, in July 2020.
The Minister of Finance, Budget and National Planning, Zainab Ahmed, announced the loan acquisition during an inspection of the project on Tuesday.
According to her, the project was being delivered on time. She also added that despite a slowdown in economic activities, the project had not had cause to suspend its operations even for a day.
“We are glad that gas is being piped to Ajaokuta, Kaduna to Kano. This project in this part of the country will create jobs, even now that work is going on locals are being employed. The contractor is doing a quality and excellent job, and we commend NNPC for implementing this project,” she said.
“We have to give a sovereign guarantee to the lender so that the loan is concluded. I am glad to say the loan has been concluded. And very soon the disbursement will start to the contractor. For now it is $2.5 billion.”
Mele Kyari, group managing director (GMD) of the Nigerian National Petroleum Corporation (NNPC), who surveyed the project, said the gas pipeline is currently at about 15 percent completion.
He added that the project is 85 percent funded by the Exim Bank of China while the NNPC provides 15 percent equity from its resources.
Kyari assured that the NNPC is “ensuring high-level security around these pipelines using the best-in-class technology available.”
He also added that the loan would be repaid once revenue from gas flowing through the pipeline is gotten, coupled with existing revenue streams.
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