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IFC to finance Nigeria’s $5bn gas pipeline project

By on October 12, 2013

The Federal Government is in talks with the International Finance Corporation to help to fund a national gas-pipeline network for the supply of power stations and industries.

Bloomberg on Thursday quoted the Minister of Petroleum, Mrs. Diezani Alison-Madueke, as saying the IFC was interested in financing the 40-inch 683-kilometer (424-mile) Ajaokuta-Kaduna-Kano northern link, the primary network for the proposed trans-Saharan pipeline to Europe.

“We asked for a mixed basket of debt and equity financing. 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 advisories and project support, will begin.”

Nigeria, the holder of Africa’s largest gas reserves of more than 187 trillion cubic feet, flares, or burns, most of the fuel it produces along with oil because it lacks the infrastructure to process it, Bloomberg reported.

At least $3bn in revenue is lost annually due to flaring, according to the Petroleum Ministry.

The Nigeria National Petroleum Corporation in July sought expressions of interest in “co-development” of the country’s northern and eastern natural gas pipeline system.

The NNPC said it would prefer a funding structure of 60 per cent debt and 40 per cent equity for the project estimated to cost $5bn.

Meanwhile, the Federal Government sold N131.82bn ($822.59m) in treasury bills on Wednesday, with maturities ranging between three months and one year with yields broadly flat compared with the previous auction, according to a Central Bank of Nigeria data on Thursday.

The bank sold N20.15bn worth of 91-day paper at 10.8 per cent, compared with 10.85 per cent at the previous auction on September 26.

The regulator sold N43.49bn in the 182-day note at 11.64 per cent, slightly lower than the 11.69 per cent at the last auction, while a total of N68.18bn of the 364-day debt was sold at 11.74 per cent, the same returns as at the September 26 auction.

Investors’ bids reached N250.55bn compared with N315.48bn at the previous auction.

 

 

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