Nigeria Has Secured $1.5bn Chinese Loan For Lagos-Ibadan Rail -Amaechi

 

The Federal Government has secured $1.5 billion (about N450 billion) counterpart funding from China for the Lagos-Ibadan rail project set to commence in March.

The Minister for Transportation, Rotimi Amaechi, made the disclosure on Wednesday when he appeared before the Senate committee on land transport to give report of his ministry’s 2016 budget and defend the proposal for 2017.

“In the first quarter of 2017, the foundation of the Lagos-Ibadan segment two of the Lagos-Kano rail project will be laid. The implication here is that we will start the Lagos-Ibadan rail line before the end of March. Our target is to commence from the Apapa seaport down to Ogun and then to Ibadan,” said Amaechi.

The minister explained to the senators that the $1.5 billion counterpart funding had been approved by China and was being processed by the China Exim Bank.

“The counterpart funding is ready, but don’t forget that we are borrowing the money from China. The China Exim Bank is processing it. Our 15 per cent is ready; so, we are waiting for China Exim Bank. They have managed to release and approve $1.5 billion for the Lagos-Ibadan line.

“It is also envisaged that segment three of the Lagos-Kano rail project, which is the Kano-Kaduna stretch, as well as the first phase of the coastal railway line Lagos-Calabar, commencing from Calabar to Port Harcourt with extension to the Onne Deep Seaport will commence after the conclusion of the negotiation of a financing loan agreement,” Amaechi disclosed.

He then urged the National Assembly to approve the $30 billion national (rolling) borrowing plan of the government.

He said the approval was essential for securing funds needed to finance rail projects in the country.

“What the National Assembly has approved is the counterpart funding, but we need the approval to borrow the remaining money. If you look at $6.1 billion in naira, and we are paying 15 per cent, you will know that the remaining amount is coming from China and until we have approval, we cannot do anything.

“Even now, the China Exim Bank has approved $1.5 billion for the Lagos-Ibadan line. We are not able to sign the loan agreement because we need the approval of the National Assembly.”

Lagos-Ibadan rail line is a segment of the Lagos-Kano railway project, one of the most important and ambitious infrastructural targets of the Muhammadu Buhari-led All Progressives Congress administration.

In January, the government announced wholesale release of N72 billion as Nigeria’s counterpart funding for the Lagos-Ibadan railway.

Speaking for the Senate, Senator Gbenga Ashafa, who chairs the Senate Committee on Land Transport,  promised cooperation with the transportation ministry to ensure implementation of the infrastructural objectives.