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Senate okays new Chinese bank for $23bn railway project


Senate on Tuesday rescinded its decision on the financier of the Kaduna-Kano railway project in the country from the China Exim Bank to the China Development Bank and harmonised the terms on the Federal Government’s 2016-2018 s external borrowing plan.

The National Assembly had in 2020 approved a $22,798,446,773 loan for the railway modernisation project of the Kaduna-Kano segment.

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

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

Senator Umar presented the motion and 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 (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 of which China Exim Bank withdrew its support to finance the project.

In his remarks, the Senate President, 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 harmonized terms.

The red chamber, after that, unanimously approved the resolutions.

Meanwhile, the Senate on Tuesday directed the Infrastructure Concession Regulatory Commission and the Bureau for Public Enterprises to terminate arrangements regarding the Zungeru Power Plant concessions.

It queried the two federal agencies for going ahead with the concession arrangements in Niger State despite an earlier resolution of the federal parliament that the action be put on hold until the power plant had been completed and tested.

Similarly, the Senate urged the  BPE  to honour the commitments it made before the committee, to put into concession only  the ZHPP after it had been completed, tested and inaugurated.

The red chamber also recommended a new timetable for the concession process` which must be adopted by the BPE.

The Senate said it would allow time for the actualization of key contractual milestones that are critical to the success of the proposed concession.

The chamber also said it would make room for full compliance with the EPC contract between the Federal Ministry of Power and the Contractor.

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