Thursday, 2 February 2017
FG Secures $1.5bn Loan From China For Lagos-Ibadan Rail. cc @DrJoeAbah
Minister of Transportation, Rotimi Amaechi, disclosed yesterday that the Chinese government has approved a $1.5 billion (N450 billion) counterpart funding to the Federal Government for the Lagos-Ibadan segment of the Lagos-Kano railway project.
The minister said the project for which the federal government has already released N72 billion counterpart funding would begin before the end of the first quarter of this year.
He made the disclosure during the presentation of the ministry’s 2016 budget report and defence of the 2017 budget proposal before the Senate committee on land transport.
The minister said the $1.5 billion counterpart funding approved was being processed by the China Exim Bank and that work would commence once the process is completed.
According to Amaechi: “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.”
Speaking further, he stated that: “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.”
The minister during his presentation also called on the National Assembly to approve the federal government’s $30 billion borrowing plan before it, pointing out that the approval was critical to the securing of funds to finance rail projects in the country.
“The National Assembly needs to give us approval for the borrowing plan so that we can commence work. We can’t sign the loan agreement with China unless there is an approval from the National Assembly.
“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,” Amaechi pointed out.
In his response, the committee chairman, Senator Gbenga Ashafa promised assured the minister of the committee’s cooperation to enable it achieve its goals, especially in the area of infrastructure.