Nigeria's Gas Pipeline Project Suffers Funding Delays

Nigeria's critical gas infrastructure project, the Ajaokuta-Kaduna-Kano pipeline (AKK) is currently experiencing delays as Chinese lenders fail to release funds for the project. As a result, the government is seeking U.S.$1 billion so that work can continue on the gas pipeline costing up to U.S.$2.8 billion.

The AKK delay is the latest sign of failing financial support for infrastructure projects across Africa, after years of major Chinese lending for railway, energy and other projects. The AKK project is central to President Muhammadu Buhari's plan to develop gas resources and boost development in northern Nigeria.

Nigeria began building the AKK pipeline in June 2020, saying it would help generate 3.6 gigawatts of power and support gas-based industries along the route. The project was to be funded by Chinese firms under a debt-equity financing model, backed by sovereign guarantee and repaid through the pipeline transmission tariff.

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