NNPC moves to raise equity stake in $2,8 bln AKK gas projects ~NGC Chief
The Nigerian National Petroleum Corporation (NNPC) said it plans to increase its equity stake in the $2.8 billion Ajaokuta-Kaduna-Kano (AKK) gas pipeline project to reduce debt ratio in the financing of the project.
The Managing Director of the Nigerian Gas Company (NGC), Seyi Omotowa, who disclosed this at a Webinar noted that the project is set for completion at the set target and all hands are on deck to ensure the success of the gas infrastructure.
The project is being financed through an 85 percent debt and 15 percent equity with a loan facility from the China Export & Credit Insurance Corporation (Sinosure) with a 12-year repayment plan and completion period of 24 months.
Omotowa said the country was considering increasing its 15 percent equity share of the project so as to reduce the loan burden.
“For financing, it’s not the federal government that is taking the loan, it’s NNPC that is taking the facility. “Government is only providing a sovereign guarantee in the event of any failure.
“The NNPC is even considering increasing its equity contribution to reduce the loan burden. So, ultimately there is a plan to repay this loan and it’s not the federal government that is paying.”
President Muhammadu Buhari had in June officially launched the construction of the project, which is a section of the Trans-Nigeria Gas Pipeline (TNGP) with a capacity to transport about 2.2 billion cubic feet of gas per day.
The infrastructure, which will enable Nigeria to produce gas instead of flaring it, will cross seven major rivers and ten major roads. It will feed industry and power generation, with three new gas-fired plants set to produce 3,600 megawatts of electricity.
“We believe that from the experience we will bring along with other partners in construction technologies of the consortium, it will help in achieving the timeline for completion.
“Things are being done differently on the AKK project, by the application of the transparency, accountability and performance excellence initiative. There’s AKK project governance in place at the moment.
“This is the first time an NNPC project is having a steering committee led by the GMD, comprising top management of NNPC and key external stakeholders from the office of the chief of staff, representatives of Ministries of Justice, Finance and National Planning, CBN, Debt Management Office as well as NEITI.”
Omotowa stated that the presence of all the agencies and parastatals of government on the committee overseeing the project would ensure transparency and compliance with rules and regulations.
“So, the steering committee oversees the overall delivery of this project, a monthly meeting is being held with the aim of having full visibility so that issues are promptly resolved, challenges are sorted out to ensure we keep to schedule,” he added.