The China Development Bank is now the financier for the $22.7bn Kaduna – Kano Rail Project in North Western Nigeria.
The project was initially meant to be funded by the China Exim Bank which later rescinded its decision to provide the funds.
But the Senate in its resolution on Tuesday approved the engagement of the China Development Bank as the new financier.
The upper chamber subsequently harmonised terms on the 2016-2018 Federal Government’s external borrowing plan for the project.
The National Assembly had in 2020 approved a $22,798,446,773 loan for the Railways Modernisation Project on the Kaduna-Kano segment.
The chamber also approved relevant conditions provided in the harmonized term sheet.
They included the Kaduna-Zaria-Kano segment, with the China Development Bank as the financier.
The terms also indicated a repayment period of 15 years with 2.7 per cent and six months Euribor as interest rate.
It also included a commitment fee of 0.4 per cent and 0.5 per cent as upfront fee, respectively.
The resolutions were sequel to a motion sponsored by Senator Sadiq Umar (APC Kwara North) during plenary.
Presenting the motion, the federal lawmaker noted that “the 2016-2018 Federal Government external borrowing (rolling) plan was approved by the Senate and the House of Representatives on March 5, 2020 and June 2, 2020 respectively.”
He also recalled that “the National Assembly approved the sum of $22,798,446,773 under the 2016-2018 Medium Term External Borrowing (Rolling) plan.”
The lawmaker said the National Assembly received communication from the Federal Ministry of Finance requesting the approval of modifications to the financing proposal for the Nigerian Railway Modernisation Project (Kaduna-Kano segment)
The Ministry explained then that the review was occasioned by the COVID-19 pandemic whereof China Exim Bank withdrew its support to finance the project.
To secure the funds for the project, the Senator said that “the contractor, CCEC Nigeria Limited, in collaboration with the Federal Ministry of Transportation, engaged China Development Bank (CDB) as the new financier in the sum of $973,474,971.38.
The President of the Senate, Ahmad Lawan, clarified that the motion was not about a new loan, but a “rescission on the financier of an old external borrowing plan and the harmonized terms.”
