The Federal Government is currently discussing with the London-based bank, Standard Chartered Bank Plc, over the funding of 2 rail line projects expected to cost about $14.4 billion, as against the earlier plans to get the loans from Chinese banks.
This proposed arrangement is coming after the Nigerian government had already finalized the contract with the Nigerian subsidiary of the state-owned China Civil Engineering Construction Corp (CCECC) for the 2 deals.
The 2 rail projects include the eastern line that links Port Harcourt with Maiduguri and the extension of the Lagos-Ibadan rail line to Kano.
This disclosure was made by the Minister of Transportation, Rotimi Amaechi, during an interview, where he was quoted as saying that the present administration and Standard Chartered Bank are in talks for the financing of the upgrade of a narrow-gauge track in eastern Nigeria and a new standard-gauge on the coast.
Amaechi, without providing details, said, “We’ve moved away from China in some of our projects. Finance Minister Zainab Ahmed is overseeing the talks with the emerging markets-focused financial institution about arranging the infrastructure loans.’’
Chinese lenders had previously been expected to provide funding for the bulk of the 2 rail projects.
The Transportation Minister had during the flag off of the CCECC’s $3.2 billion reconstruction of the dilapidated eastern line, which links the port city of Port Harcourt in the south with Maiduguri in the north, said that a syndicate of Chinese lenders were prepared to fund the project.
CCECC also signed an $11.2 billion contract with the previous administration in late 2014 to construct the Coastal Line which would connect the southwestern commercial hub of Lagos with the southeastern port town of Calabar.
Buhari said in 2017 that the state-owned Export-Import Bank of China would shortly approve a $3.5 billion loan to help start building the 1,400-kilometer (870-mile) standard-gauge line, which Amaechi said the government plans to construct in segments.
The Federal Government had been embarking on several rail line projects across the country in collaboration with Chinese firms.
CCECC has already completed 2 other standard-gauge railway segments in Nigeria, which includes the one that links Abuja to the city of Kaduna, and another connecting Lagos to the city of Ibadan. China Eximbank provided most of the financing for those projects, as well as a metro line in Abuja, through loans worth about $2.3 billion.
Amaechi had said that the government still expects China Eximbank to provide $5.3 billion to allow CCECC to extend the Lagos-Ibadan line to the northern trading centre of Kano.
The government has also contracted Portuguese construction company Mota-Engil SGPS SA to build a railway from Kano to Maradi, in the neighbouring Niger Republic. Credit Suisse Group AG, Africa Finance Corp. and German state bank KfW are arranging nearly $2 billion of loans to fund the work.
Standard Chartered has had a presence in Nigeria, Africa’s biggest oil producer, since 1999. The lender facilitated investments worth $2.5 billion into the country last year – the most of all banks – out of a total of $9.7 billion, according to the National Bureau of Statistics.