Nigeria to receive US $2.6bn loan for Ajaokuta-Kaduna-Kano Gas Pipeline project

Nigeria is set to receive a loan worth US $2.6bn for the implementation of the Ajaokuta-Kaduna-Kano (AKK) gas pipeline project. The country’s Minister of Finance, Budget and National Planning, Zainab Ahmed, and Mele Kyari the Group Managing Director at the Nigerian National Petroleum Corporation (NNPC) revealed the report.

The funds will be disbursed by the Bank of China and Sinosure, a Chinese export and credit insurance corporation. The two institutions are set to fund 85% of the entire project costs while the Federal Government, represented by NNPC, will provide the remainder, 15% through equity.

The AKK pipeline is a 614km-long pipeline being developed by NNPC to transport natural gas from southern Nigeria to central Nigeria. The gas pipeline project was flagged off in July this year by President Muhammadu Buhari. Mele Kyari announced that at the moment, the project which covers a distance of over 600 kilometers is approximately 15% complete and they are certain to deliver it on schedule.

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Build-own-operate-transfer basis

“Despite the slowdown in economic activities, this project has not stopped even for a single day since it started about five months ago. We believe that we shall complete it within the stipulated time frame and within the estimated costs,” emphasized the NNPC Group Managing Director.

The AKK pipeline is being developed on a build-own-operate-transfer (BOOT) basis under public-private partnership (PPP), supervised by Nigeria’s Infrastructure Concession Regulatory Commission (ICRC). The project is being executed in three phases. The first phase covers a distance of 200 kilometers between Ajaokuta and Abuja, while the second and the third phases cover a distance of 193 kilometers and 221 kilometers, from Abuja to Kaduna, and from Kaduna to Kano respectively.

Brentex/China Petroleum Pipeline Bureau-CPP Consortia and Oilserve/China First Highway Engineering Company-CFHEC Consortia were announced as the Engineering Procurement and Construction contractors for the project.

The project which is reputed to be the single biggest gas pipeline project in the West African country’s history is expected to transport approximately 3.5 billion cubic feet of gas per day from the delta to power plants in the south of the country. The pipeline is set to eventually extend to the North Africa region.