[Nigeria] AKK gas project progresses under Contractor Financing Model
The Nigerian National Petroleum Corporation (NNPC) has emphasized that the execution of the strategic Ajaokuta-Kaduna-Kano gas pipeline project is progressing under the original concept of 100 percent contractor financing model.
The NNPC in an apparent response to some media report of a possible resort to ‘’proceed of gas tariffs’’ as new means of funding because of purported collapse of negotiation with Chinese lenders, said that the contractor finance arrangement is still intact noting that the Engineering Procurement Construction (EPC) contractors and possible lenders are currently in Dubai to discuss the financing terms.
The Corporation explained in the Press Release by its Group General Manager, Group Public Affairs Division, Ndu Ughamadu, that the application of revenue generated from the tariff is purely for loan repayment since the project financing is “Contractor finance”.
‘’We wish to further clarify that part of the approvals obtained from the Federal Government is to fund the implementation of the project front-end activities tagged “Early Works” in order to continue to move the project forward pending the conclusion of the financing negotiations,’’ the Corporation explained
NNPC further clarified that the amount spent for the early works shall be recovered immediately the loans disbursement starts and no part of tariff shall be spent on the project until the end of the loan moratorium period.
The Corporation restated its commitment to actualizing the AKK project as approved and in line with the Federal Government’s desire to improve the supply of gas nationwide, thereby enhancing power generation, economic growth and employment opportunities.
While pledging to work with its partners to progress the financing and technical arrangements for the AKK Project, the NNPC promised to provide regular and informed updates to the media and well-meaning members of the public.