The Nigerian National Petroleum Corporation has secured funds amounting to US$2.5billion to finance its pipeline project.
According to the Group Managing Director, Nigerian National Petroleum Corporation, Mallam Mele Kyari, the corporation secured the funds through a deal agreement with a Chinese lender.
Mr. Kyari further revealed that agreement between the corporation and the Chinese lender was that the lender finances 15 percent of the project using the owner financing model while 85 percent of the funding will be provided as a loan to the corporation.
According to the NNPC boss, the 15 percent which is close to US$430 million has already been agreed on and that the NNPC was expecting closure of 85 per cent, amounting to about $2.5 billion.
The corporation’s Group Managing Director while on an interview with Bloomberg TV, said it was a pipeline contractor project that would deliver 3, 600 megawatts of power and supply two billion standard cubic feet of gas.
“It is a pipeline contractor project that will deliver 3,600 megawatts of power at the first instance and particularly supply two billion SCF/d of gas which is quite significant in the contest of our current situation,” said Kyari.
“And of course, financing is everything. What we did is to get a Chinese company; it has been a long conversation and it is very close to financial closure.”
Nigeria is the largest economy in Sub-Saharan Africa with a population of more than 200 million people.
The West African nation is also endowed with large oil, gas, hydro and solar resources which can be harnessed to provide power.
It also has an installed capacity of over 12,000MW. It is however paradoxical that such a well-endowed nation is only able to produce an average of 4,000 MW of power which is insufficient.
The current national average of power access stands at 45 percent. This means that 55 percent of the nation which is close to 20 million households does not have access to electricity.
The government has however been aggressively pursuing a universal electricity agenda and hopes to achieve its target of 100 percent household connection to power by 2030.
The NNPC pipeline project will thus have a significant contribution to the national grid and help contribute to the nation’s universal power access goal.