The China Exim Bank has rejected the Federal Government’s application for a loan of $$22,798,446,773 (22.7 billion dollars).
This was made known by the House of Representatives on the floor of the chambers as it approved a counter request for a loan of N900 million from China.
According to The Punch, the rejected loan was intended to fund the Nigerian Railway Modernisation Project’s Kaduna-Kano segment.
The Chinese Exim Bank’s withdrawal of its support was due to concerns about Nigeria’s ability to repay the loan and the impact of the COVID-19 pandemic on the project.
Chairman of the House Committee on Rules and Business, Abubakar Fulata proposed a motion to amend the legislative chamber’s previous resolution, and give fresh approval for$973,474,971.38 loan from China Development Bank following an unsuccessful loan deal.
The motion, titled ‘Rescission of the 2016-2018 Federal Government External Borrowing (Rolling) Plan,’ was based on the fact that the plan had already been approved by the Senate and the House of Representatives on March 5, 2020, and June 2, 2020, respectively.
Fulata reminded the House that the National Assembly had approved $22,798,446,773 ($22.7 billion) for the 2016-2018 Medium Term External Borrowing (Rolling) plan.
He also noted that the Federal Ministry of Finance had requested modifications to the financing proposal for the Nigerian Railway Modernisation Project due to the COVID-19 pandemic, which led to China Exim Bank withdrawing its support for the project.
The lawmaker went on to explain that the contractor, CCECC Nigeria Limited, had collaborated with the Federal Ministry of Transportation to engage China Development Bank as the new financier for the project, with a loan amount of $973,474,971.38 ($973 million).
Fulata, therefore, prayed the House to rescind its decision on the financier and harmonised terms and approve the change of financier from China Exim Bank to China Development Bank.
Lawmakers unanimously granted the prayer, and the House of Representatives approved the conditions outlined in the harmonised term sheet, which included details such as the segment covered by the loan, the financier, the loan type, maturity period, currency, interest rate, commitment fee, and upfront fee.