Funding of Nigeria’s $2.8 billion Ajaokuta-Kaduna-Kano (AKK) pipeline project has been guaranteed by China National Petroleum Corporation (CNPC), e360 has learnt.
Chinese banks which include Industrial and Commercial Bank of China (ICBC), Bank of China, and Infrastructure Bank of China are expected to provide 85 percent of the financing, while Sinosure, China’s Export Credit Agency (ECA) will provide insurance cover.
The remaining 15percent will be provided by the project contractors which include Oilserve/Oando consortium, as well as Brentex/China Petroleum Pipeline (CPP) Bureau consortium, according to a statement by the NNPC.
Speaking on behalf of over six CNPC subsidiaries at a meeting with the Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Dr. Maikanti Baru, the Assistant President and Board Member of the CNPC, Mr. Wang Shihong, said his company placed a very high premium on the AKK Project, saying it is the beginning of several collaborations between both corporations.
“We are in full support of Nigeria’s quest to deliver the AKK project. We are working relentlessly towards securing funding for the project based on regulations and policies of Chinese financial institutions,” Shihong stated.
The meeting was held on the sidelines of the ongoing Forum on China-Africa Cooperation (FOCAC) Summit in Beijing, China.
The AKK gas pipeline is expected to enable connectivity between the East, West and North that is currently non-existent. It would also enable gas supply and utilization to key commercial centres in the Northern corridor of Nigeria with the attendant positive spin-off on power generation and industrial growth.
Financing for the 40-inch x 614km AKK gas pipeline is expected to cost about $2.8bn, for the project described as the single biggest gas pipeline in the history of Nigeria’s oil and gas operations.
Dr. Baru in his remarks during the meeting stated that the NNPC was looking forward to a successful close-out of the project’s financing towards official groundbreaking ceremony next month.
“We want to maximize the construction work before the end of the year. We are hoping for the quick resolution of the financing agreements so that we will kick-start the project in October, when the dry season begins,” Baru said.
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