Narrative
Full Description
Project narrative
In October 2023, the Government of Nigeria and China Development Bank (CDB) signed a $973,474,971.38 loan agreement for the Kaduna–Zarai-Kano Railway Modernization Project. The loan reportedly carries the following borrowing terms: a 15-year maturity, an interest rate of 6-month EURIBOR plus a 2.7% margin, a 0.4% commitment fee, and a 0.5% upfront (management) fee. It is supported by a Sinosure credit insurance policy. The borrower was expected to use the loan proceeds to finance approximately 80% of the cost of $1,221,700,000 commercial contract with CCECC Nigeria Limited (a local subsidiary of China Civil Engineering Construction Corporation). In December 2024, the CDB released the first disbursement (EUR 245 million or $254.7 million) under the loan agreement for the Kaduna–Kano Railway Modernization Project. The loan's principal amount outstanding was $254.7 million as of December 31, 2024. The purpose of this project is to construct a railway segment that runs from Kaduna to Kano via Zaria (Zarai). CCECC Nigeria Limited is the contractor responsible for project implementation. Construction commenced on July 22, 2020. The project had achieved a completion rate of 50% by December 2024.
Staff comments
1. The Chinese project title is 建设尼日利亚卡杜纳-卡诺铁路项目. 2. The borrowing terms are based on a CDB term sheet that Nigeria’s Senate approved in March 2023. 3. The project was previously intended to be funded by a loan from China Eximbank. However, China Eximbank withdrew its support for the project, citing concerns over repayment and the Covid-19 pandemic (see Record ID#60850). Documents from Nigeria's parliament note that the contractor (CCECC Nigeria Limited) collaborated with the Nigeria's Ministry of Transportation to seek new funding from China Development Bank.