China Eximbank provides $500 million preferential buyer’s credit for Phase 1 (Abuja-Kaduna Section) of Nigerian Railway Modernization Project (Linked to Project ID#1844, #60848, #60767, #60850)

On December 20, 2010, China Eximbank and the Government of Nigeria signed a $500 million preferential buyer’s credit (PBC) agreement for Phase 1 (Abuja-Kaduna Section) of the Nigerian Railway Modernization Project. The PBC (loan) carried the following borrowing 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, 2030. The borrower is required to deposit railway (project) revenues deposited in an escrow account that is accessible to the lender. 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 $79.68 million and principal repayments worth $115.38 million to the lender. As such, the loan’s (principal) amount outstanding, as of December 31, 2020, was $384.62 million. Phase 1 of this project involved the modernization of a 186.5 km railway section from Abuja (Idu), the country’s federal capital, to Kaduna, the country’s commercial capital. This section is part of a larger 1,313 km standard gauge railway that runs from Lagos to Kano and carries both passenger and cargo. China Civil and Engineering Construction Company (CCECC) was the contractor responsible for implementation. CCECC signed an EPC contract with the Government of Nigeria on October 26, 2009. Construction began on February 20, 2011. Then, on July 4, 2013, a track-laying ceremony took place. The construction of the railway was completed in December 2014. The railway officially began commercial operations on July 28, 2016. In 2020, Pew Research Center released an analysis of this project. It found that, during the railway’s construction period, Nigerians living near the railway were less likely than those farther away to express a favorable view of China. However, approval of China among those nearby rebounded to levels more in line with other Nigerians after the railway’s completion.

Additional details

1. This project is also known as Phase 1 (Idu-Kaduna) of Nigerian Railway Modernization Project or Segment 1 of the Lagos-Kano Railway Project. The Chinese project title is 阿布贾-卡杜纳段（阿卡铁路） or 为尼铁现代化项目分段实施的第一段工程. 2. In the database of Chinese loan commitments that SAIS-CARI released in July 2020, it does not record a grace period and it records the maturity length of this loan as 19 years. AidData records the borrowing terms (7 year grace period and 20 year maturity) that are reported by Nigeria’s Debt Management Office (DMO) in its ‘Loans Obtained from China Exim As At December 31, 2020’ publication.

Number of official sources

20

Number of total sources

60