Nigeria turns to Standard Chartered to fund key rail projects

Nigeria’s government is leaning towards engaging Standard Chartered Bank about arranging funding for two rail projects expected to cost as much as $14.4 billion.

The plan is for the bank to replace an earlier deal to source the loans from Chinese banks, Transport Minister Rotimi Amaechi said in a report by Bloomberg..

President Muhammadu Buhari’s administration and the London-based lender are discussing financing for the upgrade of a narrow-gauge track in eastern Nigeria and a new standard-gauge line on the coast, Amaechi said in an interview.

The government has already concluded contracts with the Nigerian unit of state-owned China Civil Engineering Construction Corp., or CCECC, for both deals.

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“We’ve moved away from China in some of our projects,” Amaechi said June 5 in the capital, Abuja. Finance Minister Zainab Ahmed is overseeing the talks with the emerging markets-focused financial institution about arranging the infrastructure loans, he said, without providing any further details.

Standard Chartered is “unable to provide any information nor any confirmation” about the talks, the bank’s head of corporate affairs for West Africa, Dayo Aderugbo, said by email, citing “confidentiality issues in disclosing any third-party transactions.”

A London-based spokeswoman for the bank declined to comment, while a spokesman for Ahmed didn’t respond to text messages and phone calls seeking comment.

Standard Chartered has had a presence in Nigeria, Africa’s biggest oil producer, since 1999 and the lender facilitated investments worth $2.5 billion into the country last year — the most of all banks — out of a total of $9.7 billion, according to the National Bureau of Statistics.

Chinese lenders had previously been expected to provide loans to fund the bulk of the two rail projects.

At a groundbreaking ceremony in March for CCECC’s $3.2 billion reconstruction of the dilapidated so-called Eastern Line, which links the port city of Port Harcourt in the southeast with Maiduguri in the north, Amaechi said “a syndicate of Chinese financiers” was backing the development.

CCECC signed a $11.2 billion contract with Amaechi’s predecessor in late 2014 to build the so-called “Coastal Line,” which would connect the southwestern commercial hub of Lagos with the southeastern port town of Calabar.

Source: Business Day