Page 9 - DMEA Week 04 2020

DMEA TRANSPORT DMEA
LAPSSET infrastructure project gains AU support
KENYA
The project has been slowed by civil issues and a lack of buy-in from governments involved.
KENYA’S Lamu Port, South Sudan, Ethiopia Transport (LAPSSET) infrastructure venture gained the status of an African Union (AU) pri- ority project this month, potentially helping the government in Nairobi attract financing for the ambitious endeavour.
The broad infrastructure project, priced at $26bn, comprises a refined fuel pipeline, a crude oil pipeline, a sea port, roads, airports, a railway and resort cities. But progress on the decade-old plan has been slowed by civil issues and a lack of buy-in from the governments involved.
Civil war in neighbouring South Sudan has also delayed execution.
Most of the work that has taken place has been in Kenya, where a road between Isiolo and Moyale on the Ethiopian border was com- pleted in July 2017. Last year the LAPSSET Corridor Development Authority (LCDA) also announced the completion of the first of Lamu’s 22 planned berths.
Under the LAPSSET masterplan, the prod- ucts pipeline would eventually extend from Moyale to Hawassa and then to Addis Ababa. Ethiopia’s rapprochement with neighbouring Eritrea has been seen as weakening its commit- ment to the project.
Lacking anywhere near enough funding, the
Kenyan government has turned to the AU and other regional investment groups to carry the project forward.
AU High Representative for Infrastructure Development Raila Odinga announced LAPS- SET’s adoption as an AU project on January 19 at a ceremony in Kenya. The event was attended by ministers from Kenya, Ethiopia and South Sudan, who signed a memorandum on its devel- opment and funding. Also present were repre- sentatives of prospective financiers, including the African Development Bank (AfDB), the United Nations Economic Mission of Africa and the African Union’s New Partnership for Africa Development (NEPAD).
“This project will now not only connect Kenya with Ethiopia and South Sudan, but with other West Africa countries once it is completed,” Odinga said. “As an AU project, it will link with other continental corridors such as East Africa Northern Corridor, East Africa Central Corridor and provide a land bridge through the African Great Lakes region.”
With its new status, the AU will recommend LAPSSET for financing to investors. Kenya, Ethiopia and South Sudan have agreed to form a steering committee with financiers to co-ordi- nate the project’s implementation. ™
Chinese banks to fund Nigerian gas pipe
NIGERIA
NNPC is close to securing a $2.5bn loan from Chinese banks for the AKK gas pipeline project.
NIGERIAN National Petroleum Corp. (NNPC) is close to wrapping up a deal with Chinese lend- ers on a credit that will help cover the cost of the Ajaokuta-Kaduna-Kano (AKK) natural gas pipeline project.
State-owned NNPC reported earlier this week that it expected to finalise the $2.5bn loan agreement with the Bank of China (BoC) and the Industrial and Commercial Bank of China (ICBC) before the start of the second quarter. Sinosure, the Chinese government’s export credit agency, will act as guarantor for 85% of total project costs, it said.
Nigerian officials began negotiating the credit deal with representatives of the Chinese banks in late 2018, during the most recent summit on Sino-African co-operation. They ended up securing a loan equivalent to nearly 90% of the $2.8bn price tag for the AKK pipeline.
The AKK link will follow a 614-km route, running northward from the left bank of the
Niger River in Kogi State to the capital city of Kano State. It is meant to serve as the first sec- tion of the Trans-Nigeria Gas Pipeline (TNGP) and will deliver gas to domestic thermal power plants (TPPs), NNPC. As a result, it will help bring Nigeria’s total generating capacity above the 10,000-MW mark and make electricity available to a larger share of the population, the company said.
According to NNPC, the pipeline will carry gas from seven development projects that are already underway. It will have a design capacity of 3.5bn cubic feet (99.11mn cubic metres) per day, or about 36.175bn cubic metres per year), and initial throughput will amount to 2 bcf per day (56.64 mcm per day, or around 20.67 bcm per year).
NNPC hopes to begin building the AKK line before the end of 2020. It has chosen a consor- tium formed by Chinese and local companies to act as its contractor for work on the pipe and compressor stations. ™
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