China To 'Fund 85%' of Nigerian AKK Pipe
Nigeria's Ajaokuta-Kaduna-Kano (AKK) gas pipeline project has received a guarantee from China that it will fund 85% of the $2.8bn, 614-km project intended to flow gas into central and northern Nigeria.
The project is intended to connect the Nigerian capital Abuja to the cities of Kaduna and Kano in the north of the country.
Chinese state producer CNPC assured NNPC it will help raise funds for AKK, according to state-owned Nigerian National Petroleum Corporation (NNPC) on September 3 which said funding was discussed during a meeting of both companies on the sidelines of the China-Africa Cooperation (FOCAC) Summit held in Beijing September 2, attended by Nigerian president Muhammadu Buhari. Specifically the 85% funding will come from Industrial and Commercial Bank of China (ICBC), Bank of China, and Infrastructure Bank of China - with Chinese export credit agency Sinosure providing insurance cover.
The other 15% will be funded by the contractors on the AKK project, namely the Oilserve/Oando consortium, and Brentex/China Petroleum Pipeline Bureau (CPP) consortium. CNPC owns CPPB.
NNPC claims it has concluded the vital Front End Engineering Design (Feed) and the Environmental Impact Assessment (EIA) report on the AKK project. It also said that work on the detailed engineering design of the AKK project is almost concluded. Five months ago, Nigeria awarded contracts for two sections of the ambitious 614km project without awarding the job to build its middle section. That already followed delays in progressing the project since it was approved for development in December 2017 by Nigeria's federal executive council (FEC) meeting.
CNPC board member Wang Shihong said that CNPC places a high premium on the AKK project and that it marks the beginning of cooperation between the two companies, according to NNPC. “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,” CNPC board member Wang Shihong was quoted as saying.
Nigerian contractor Oilserve's chairman Emeka Okwuosa said his firm had already gone into some agreements with Brentex/CPP consortium on financing, which in the end would bring the project under a single arrangement on the 15% portion of financing.
NNPC group managing director Maikanti Baru said: “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.”
China's role in the ambitious Nigerian project echoes similar recent investments in sub-Saharan African infrastructure, including a Ghana LNG import terminal project discussed earlier this week.
China and CNPC have a reputation for getting things done, earned from their rapid rollout of a major gas import pipeline in Turkmenistan, and a smaller pipe in Tanzania serving the domestic market. CNPC is also investing $3.8bn in major pipeline projects back home in China during 2018-19.