Daily Trust

FG negotiates $6.7bn loan for Ibadan-Kaduna rail line project

The Federal Government is negotiating a $6.7bn loan from the Chinese government to build the Ibadan-Kaduna rail project, Daily Trust has learnt.

Our reporter learnt from sources familiar with the matter that the Ibadan-Kaduna rail project is one of the critical infrastructure projects President Muhammadu Buhari was seeking financing support from China.

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The Minister of Transportation, Mr. Rotimi Amaechi had previously revealed that the FG was negotiating with the China EXIM Bank for the $6.7bn loan required to do the project.

“The loan is nearly $6.7bn. But when we met with the China EXIM Bank, they wanted us to reduce it but we don’t see how we can reduce it. But we will put it before the president, so that he too will also make a case for the loan when he goes to China in September” Mr. Amaechi had said recently.

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The FG will be committing at least 15 per cent in counterpart funding when the contract is consummated.

If the loan is secured, the project should start in 2019.

Recall the FG had previously signed $6.68 billion contract agreement for the Ibadan-Kaduna segment of the Lagos-Kano rail line with China Civil Engineering Construction Corporation (CCECC).

The completion time of the contract should be between two to three years, depending on availability of funds, according to officials.

Mr Amaechi promised that the ministry would be able to provide its counterpart funding within 2018 and 2019 budget provision, stating that the contract was a fulfilment of Federal Government’s plan to complete the Lagos-Kano rail modernisation project.