15 September 2012

Nigeria: MMIA to Benefit From U.S.$500 Million China Exim Bank Facility

The Federal Government, last yesterday threw more light on the $500 million loan facility for four new terminals to be sited at the Aminu Kano International Airport, Kano; Enugu Airport, Port Harcourt Airport, and Nnamdi Azikiwe International Airport, Abuja.

According to a statement by Mr. Paul Nwabuikwu--Senior Special Assistant to the Coordinating Minister for the Economy (CME) and Minister of Finance, Dr. Ngozi Okonjo-Iweala, one of the new terminals will also be sited at the Murtala Muhammed International Airport, Lagos.

The clarification, the statement noted, became necessary "in response to many inquiries received by the ministry on the $1.1 billion soft credit recently obtained by the Federal Government from the Exim Bank of China...One of the new airport terminals will be located in Lagos, the commercial hub of the country, which experiences more air traffic than any other city."

Okonjo-Iweala alongside other ministers had early this week in Beijing, China, signed a $600 million agreement with the China Exim Bank on behalf of the Federal Government for the financing of some critical infrastructure in the country, including the Abuja Light Rail project, and the Galaxy Backbone ICT infrastructure.

Out of the $600 million loan facility, $500 million will go to the Light Rail, which is currently at 25 per cent completion, while N100 million is for the Galaxy Backbone.

Another $500 million secured from the Chinese bank is for the new terminals, which include the one to be sited at the Lagos Airport.

Although the agreement for the $500 million loan for the terminals is billed to be signed soon, bringing the total loan from the Chinese bank to finance infrastructural projects in Nigeria to $1.1 billion, the terms at which the soft credit was obtained are very favourable.

At a concessional rate of 2.5 per cent interest, compared to about 16 per cent or higher from Nigerian banks, the repayment period is 20 years with a grace period of seven years.

The projects for which the loans are secured are considered high priority, and high impact ones which are designed to have practical economic effect and make life better and more convenient for Nigerians.

According to the Federal Government, the Abuja light rail project in the Federal Capital Territory "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."

One part of the intra-city rail network will extend from the city centre to Kubwa and the Nnamdi Azikiwe International Airport. The second will run from the city centre to Masaka in Nassarawa State--both are high density, high traffic routes.

"The new airport terminals will help Nigeria achieve the status of a hub on the continent and create jobs. The terminals will also 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 boost the sophistication and effectiveness of the government's efforts to tackle security challenges and improve connectivity to modern technology, especially for Nigerian youths in underserved rural areas," the statement said last night.

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