Senate rescinds decision on financier of $22.79bn FG loan for railway

The Senate on Tuesday amended its decision on the financier of Kaduna-Kano railway project in the country, switching from the China Exim Bank to the China Development Bank, and 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 railway modernisation project of the Kaduna-Kano segment.

The upper legislative chamber also approved relevant conditions provided in the harmonised term sheet, which includes Kaduna-Zaria-Kano segment, China Development Bank as the financier, 15 years as maturity with 2.7% and six months Euribor as interest rate as well as 0.4% as commitment fee and 0.5% as upfront fee, respectively.

These resolutions were sequel to a motion sponsored by Senator Sadiq Umar (APC, Kwara North) during plenary.

Presenting the motion, Senator Umar noted: “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: “The National Assembly approved the sum of $22,798,446,773 (twenty-two billion, seven hundred and ninety-eight million, four hundred and forty-six thousand, seven hundred and seventy-three United States Dollars) only under the 2016-2018 Medium Term External Borrowing (Rolling) plan.”

The lawmaker recalled the 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) occasioned by the COVID-19 pandemic whereof China Exim Bank withdrew its support to finance the project.

To secure the funds for the project, Senator Umar added: “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 (nine hundred and seventy-three million, four hundred and seventy-four thousand, nine hundred and seventy-one hundred and thirty-eight cents, United States Dollars) only.”

In his remarks, the Senate President, Dr. Ahmad Lawan clarified to his colleagues that the motion was not about a new loan, but rescission on the financier of an old external borrowing plan and the harmonised terms.

The Red Chamber, thereafter, unanimously approved the resolutions.

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