China Eximbank provides $500 million preferential buyer’s credit for Phase 1 of Abuja Light Rail Network Project (Linked to Record ID#73400)

Project narrative

On November 7, 2012, China Eximbank and the Government of Nigeria signed a $500,000,000 preferential buyer’s credit (PBC) agreement for Phase 1 of the Abuja Light Rail Network Project. The Federal Government of Nigeria made a counterpart contribution to the project worth $314 million. The PBC (loan) carried the following terms: a 20 year maturity, a 7 year grace period, and a 2.5% interest rate. The final maturity date of the loan is September 21, 2032. As of December 31, 2020, Nigeria’s Debt Management Office (DMO) reported that the China Eximbank PBC (loan) had achieved a 100% disbursement rate ($500 million) and the borrower had made interest repayments worth $66.78 million and principal repayments worth $38.46 million to the lender. As such, the loan’s (principal) amount outstanding as of December 31, 2020 was $461.54 million. Phase 1 involved the construction of a light rail network in Abuja that is 45 kilometers in length with a designed maximum speed of 100 kilometers per hour. The network was designed to connect the center of Abuja, the Abuja-Kaduna Railway (Akha Railway), and the terminal of Abuja Airport. It involves two lines (the Yellow Line and the Blue Line) that pass through 13 stations. The Yellow line travels from Abuja's Central Business District to Nnamdi Azikiwe International Airport (via Stadium, Kukwaba I, Kukwaba II, Wupa, Idu, and Bassanjiwa). The Blue Line travels from Idu to Kubwa (via Gwagwa, Deidei, Kagini, and Gbazango). China Civil Engineering Construction Company (CCECC) was the EPC contractor responsible for implementation of Phase 1. It was awarded an EPC contract in early 2007 and a formal groundbreaking ceremony took place in May 2007. However, construction did not begin until May 28, 2009. By September 2012, CCECC had achieved a 25% completion rate. As of May 2017, it had achieved a 93% completion rate. Then, on July 12, 2018, Phase 1 was completed and opened for use. Several months earlier, on May 29, 2018, China Eximbank issued a loan to the Government of Nigeria for Phase 2 (as captured via Record ID#73400). However, Abuja Light Rail was shuttered from 2020 to 2023, ostensibly to slow the spread of Covid-19. In August 2023, Bloomberg reported that '[t]rain cars are locked away at a depot. Cavernous stations fully equipped with escalators, ticket offices, cameras and scanners stand empty, overseen by bored security guards. The faux leather couches in the VIP area are covered in bird and bat droppings.' Rowland Ataguba, an adviser to the Nigerian Government on rail strategy, told Bloomberg that '[i]t’s an abandoned project. [...]. Quite clearly there was no plan on how to run the operations before they built it.' Mohamed Lawal Shaibu of Envicons Teams Ltd., an urban planning consultant in Abuja, told Bloomberg that the project 'has been very terribly executed' and '[t]he [railway] line basically avoided where people are, where people live, where people go.' Bloomberg characterized the project as 'a lesson in how not to create a mass transit system.' In July 2023, a member of the Nigerian Senate noted that the lack of use of the railway 'has made it impossible to generate the revenue and pay for the maintenance, operational costs and the loan.' Then, in September 2023, CCECC pledged to complete Phase 2 of the Abuja Light Rail Project by May 2024.