15 August 2018, Sweetcrude, Abuja — The Nigerian National Petroleum Corporation (NNPC), Tuesday, denied plans to resort to the proceeds of gas tariffs for the funding of the Ajaokuta-Kaduna-Kano gas pipeline project, declaring that the project is progressing under the original concept of 100 percent contractor financing model.
The NNPC in a statement in Abuja, insisted that the contractor finance arrangement was still intact noting that the Engineering Procurement Construction (EPC) contractors and possible lenders are currently in Dubai to discuss the financing terms.
According to the statement signed by its Group General Manager, Group Public Affairs Division, Mr. Ndu Ughamadu, the NNPC said the application of revenue generated from the tariff was purely for loan repayment since the project financing is “Contractor finance”.
He said, “We wish to further clarify that part of the approvals obtained from the Federal Government is to fund the implementation of the project front-end activities tagged ‘Early Works’ in order to continue to move the project forward pending the conclusion of the financing negotiations.”
Ughamadu further clarified that the amount spent on the early works shall be recovered immediately the loans disbursement starts and no part of tariff shall be spent on the project until the end of the loan moratorium period.
He restated the commitment of the NNPC to actualizing the AKK project as approved and in line with the Federal Government’s desire to improve the supply of gas nationwide, thereby enhancing power generation, economic growth, and employment opportunities.
While pledging to work with its partners to progress the financing and technical arrangements for the AKK Project, the NNPC promised to provide regular and informed updates to the media and well-meaning members of the public.