Alcatel-Lucent Shanghai Bell (ASB) provides $77.5 million supplier credit for Phase 1 of the National Rural Telephony Project (NRPT) (Linked to Record ID#61422)

Project narrative

On June 5, 2002, Alcatel-Lucent Shanghai Bell (ASB) entered into a commercial contract with the Government of Nigeria for Phase 1 of the National Rural Telephony Project (NRPT). Then, on July 5, 2002, ASB signed a $77,579,034.40 supplier credit agreement with the Government of Nigeria for Phase 1 of the National Rural Telephony Project (NRPT). This loan carried the following terms: 11 year maturity, 3 year grace period, and a 3.5% interest rate. The final maturity date of the loan was June 20, 2013, and according to the Government of Nigeria’s Debt Management Office (DMO), the loan was fully repaid by the end of 2013. In order to finance its supplier credit agreement with the Government of Nigeria, ASB secured an export seller’s credit from China Eximbank. The purpose of this project was to provide telecommunication (including phone, fax, and internet) services to 108 of the country’s 774 Local Government Areas (LGAs) in 36 states. It was envisaged that the project would install 636,256 Code Division Multiple Access (CDMA) lines. ASB was originally the sole contractor responsible for project implementation. However, on April 4, 2003, the commercial contract for this project was amended and assigned to a consortium including ASB and China National Machinery and Equipment Import and Export Corporation (CMEC). This consortium, in turn, hired Alcatel-Lucent Nigeria Ltd (ALU Nigeria) and other subcontractors to support the implementation of the project. Phase 1 was plagued by various problems and controversies. As of 2011, the project had still not successfully installed a single CDMA line. Then, in 2012, a top official of Nigeria’s Ministry of Communications Technology announced that “[t]he telecom industry is fully liberalised, there is very little government involvement and, therefore, we believe that the National Rural Telephony Project is better implemented and managed outside of government. So these six rural telephony exchanges are being concessioned to companies that have paid for them and our role is to monitor the implementation and delivery of services to rural areas. In a sense, we are getting out of the rural telephony.” Then, on February 21, 2013, the Nigerian anticorruption authorities launched an investigation regarding the alleged mismanagement of the National Rural Telephony Project, which focused specifically on the role of Alcatel-Lucent Nigeria Ltd (ALU Nigeria) and other vendors that supported the project.