Nigeria secures Chinese $254.76m loan to complete Kano-Kaduna standard gauge railway project
Maureen Aguta
The China Development Bank (CDB) has approved a loan of $254.76 million (€245 million) to support Nigeria’s Kano-Kaduna railway project for uninterrupted progress in its construction.
A statement by the bank on Tuesday said the move was to provide financial support for the smooth progress of the project.
The Kano-Kaduna railway, with a total length of 203 kilometres, is a standard-gauge railway. When it is completed, it would provide direct rail connectivity between Kano and Abuja.
Once completed, the railway will offer residents a safe, efficient, and convenient transportation alternative, significantly enhancing regional connectivity.
Beyond improved mobility; the railway project is poised to stimulate economic activity along its route. It is expected to promote the growth of related industries and generate numerous job opportunities for Nigerians during both the construction and operational phases.
The project has been highlighted as a key initiative under the Third Belt and Road Forum for International Cooperation. It is being executed by the China Civil Engineering Construction Corporation (CCECC), with financing provided by the CDB.
According to the bank, construction is progressing smoothly. The CDB emphasized its commitment to continued collaboration with the Nigerian government to ensure the timely disbursement of funds and effective management of subsequent phases of the project.
The bank noted that “going forward, it will closely coordinate with Nigerian partners to ensure the smooth disbursement of subsequent loans and effective post-loan management.”
The CDB stepped in as financier after the China Exim Bank withdrew its funding for the project.
In 2023, the Minister of Transportation, Saidu Alkali, disclosed that China has committed to funding the Ibadan-Abuja and Kaduna-Kano sections of the Lagos-Kano railway under the Belt and Road Initiative.
The Minister noted that most of the ongoing rail projects were awarded under an EPC+F (Engineering, Procurement, Construction, and Financing) model. This model requires 15 per cent counterpart funding from the Federal Government, with the remaining 85 per cent expected to be sourced through loans.
Alkali, however, said securing funds from banks has been challenging, as financial institutions perceive significant risk associated with railway projects and are hesitant to go ahead with the loan arrangements. Consequently, China was approached to help fund some of these projects.
President Bola Tinubu also assured that the Ibadan-Abuja-Kaduna-Kano railway project would be completed to the satisfaction of Nigeria and West Africa at large.
The Federal Government last week said the ongoing construction of the Kaduna to Kano rail line will be completed before the end of 2025.
The government also said it was hoping to construct a speed rail from Abuja to Lagos before the end of the year.
It said two organisations have indicated interest in constructing the speed rail through a Public Private Partnership (PPP) agreement.
The Permanent Secretary in the Federal Ministry of Transportation, Mr Adeleye Adeoye, said the construction of the speed rail would start as soon as the Infrastructure Concession Regulatory Commission (ICRC) completes its due process and gives the ministry the green light.
The Federal Government budgeted N44.4 billion for the completion of the Abuja-Kaduna Railway project, Lagos-Ibadan railway, and other railway projects across the country.