03 November 2013, Sweetcrude, Lagos – The International Finance Corporation is being wooed by Nigeria to fund the 683 kilometre Ajaokuta-Kaduna-Kano gas pipeline.
The planned pipeline will hook the northern part of the country to natural gas from the south and ultimately serve as a link for the trans-Saharan gas pipeline – the multi-national gas route planned to transport Nigeria’s to Europe.
Talks are already on, on the matter between the Nigerian government and the IFC, with Petroleum Minister Diezani Alison-Madueke assuring that work would commence on the pipeline in the next six months.
The minister, who hinted that the government was asking that IFC provides “a mixed basket of debt and equity financing,” said: “Over the next six months, once the front-end issues are sorted out, mobilisation and implementation of the financial support and the work, as well as project advisorial and project support, will begin.”
Specifically, Nigeria is looking at a funding structure of 60 per cent debt and 40 per cent equity, which meant that IFC would provide equity and debt.
Nigeria’s northern gas network comprises Ajaokuta-Kaduna-Kano pipeline while the eastern network is made up of the Qua Iboe/Calabar-Ajaokuta pipeline system.
“The NNPC, on behalf of the Federal Government of Nigeria, FGN, will co-invest, providing equity and debt from a combination of planned sources including annual appropriation through FGN budget process and other sources such as the ongoing Ministry of Finance Eurobond issue,” the corporation had said in an EOI document.
The pipeline network is planned to operate on a commercial basis, with revenues coming in the form of commercially-determined gas transmission tariff embedded in the Gas Transmission Agreements that will underpin the pipeline flows.
“It is anticipated that by the end of 2018, effective throughput across the network will be about 1.5billion cubic feet/ day. Conceptual engineering has been completed for the network and FEED about to start,” the NNPC said.
