13 September 2012

Nigeria: FG Gets U.S.$1.1 Billion China Exim Loan for Rail, Airport Terminals

The federal government, yesterday, signed an agreement for a $600 million facility with the China Exim Bank for two high-priority, high-impact projects expected to be completed by 2015.

The two projects are the Abuja Light Rail which will cost $500 million and the Galaxy Backbone ICT infrastructure which will be financed with $100 million.

The federal government also obtained the commitment of the Chinese bank to the financing of the third project : the construction of four state-of-the-art airport terminals in four cities across the country - in Abuja, Kano, Port Harcourt and Enugu - at the cost of $500 million. The agreement would be signed within the next few weeks.

Finance minister and coordinating minister for the economy Ngozi Okonjo-Iweala said that the execution of the projects was in line with President Goodluck Jonathan's pledge to boost critical infrastructure in the country.

She described yesterday's signing as the culmination of a process that had been on for several months including the approval of the Federal Executive Council and a visit to the Asian country in February by a high-powered federal government delegation. She said the loan agreement was signed on behalf of Nigeria by the finance minister and Mr Sun Ping, managing director of China Exim Bank. The ministers of aviation Princess Stella Oduah, FCT Bala Mohammed, and minister of state for works Ambassador Yuguda were in the team which worked on the final details of the agreement with the officials of the bank.

Also present were the DG, Debt Management Office, Dr Abraham Nwankwo, and special adviser to the president on performance monitoring Professor Sylvester Monye.

Explaining the rationale for prioritising the projects, the finance minister said that the projects were targeted at making a difference in the lives of Nigerians across socio-economic segments.

"President Goodluck Jonathan is keeping his promise to Nigerians through these important projects. The light rail in Abuja will improve transportation for all residents, especially the working class. The backbone will help to improve service delivery in areas like education and health while empowering the youths with better connectivity to the rest of the world. And the four new airport terminals will, like the others, create jobs and also ensure that Nigerian air passengers enjoy the services and convenience that their counterparts in other parts of the world take for granted," she said in a statement made available to LEADERSHIP.

According to her, the facility was obtained on highly concessional terms of 2.5 per cent interest over 20 years with a grace period of seven years in line with the federal government's policy of prudence with regard to loans.

"The light rail project in the Federal Capital Territory, which is at 25 per cent completion, would cost $500m. When completed, the project will significantly improve the lives of Nigerians especially those in the lower socio-economic groups who have to travel great distances from their homes on the outskirts to their places of work in the city."

She said that one part of the intra-city rail network would extend from the city centre to Kubwa and the Nnamdi Azikiwe International Airport while the second would run from the city centre to Masaka in Nassarawa State, both being high-density, high-traffic routes.

Also, the new airport terminals are expected to help Nigeria achieve the status of a hub on the continent and deepen employment generation in the sector, she said, adding that the terminals will help to grow passenger capacity to over 50 million from the current 20 million and increase the number of direct and indirect jobs in the sector to 1.5 million from the current 60,000.

The Galaxy Backbone will, apart from boosting the sophistication and effectiveness of the government's efforts to tackle security challenges, also improve connectivity to modern technology especially for Nigerian youths, she said.

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