The Federal Government has revealed how it hopes to raise the $1.5 billion for the rehabilitation of the Port Harcourt refinery in Rivers State.
This is as the government has said that the rehabilitation of the Port Harcourt refinery will not significantly add to the country’s debt burden.
This was disclosed by the Minister of State for Petroleum Resources, Timipre Sylva, during an interview with Channels Television.
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He said about $800 million of the funds would be coming from appropriation, $200 million from the internal operations of NNPC, and the rest from the African Export-Import Bank (Afreximbank).
While dousing concerns that the project would worsen the nation’s debt profile, Sylva stated that the government had no intention of borrowing all the funds needed for the rehabilitation of the refinery, which he said would be functional in 18 months.
What the Minister of State for Petroleum Resources is saying
Sylva disclosed that a subsidiary of the Nigerian National Petroleum Corporation (NNPC), Nigerian Petroleum Development Company Ltd (NPDC), and others would contribute the money to be used for the project.
He said, “There are questions asked, when are we going to fix our refineries, when are we going to rehabilitate our refineries? Now, we are rehabilitating the refineries but unfortunately, it is generating all these (issues).”
Sylva revealed that the federal appropriation would contribute $800 million to the project.
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Going further, he said, “Let me tell you how this rehabilitation is going to be funded; it is not going to be all debts, we are not going to borrow all the monies that are going into the rehabilitation (project).
“Some of the money will come from NNPC’s internally generated revenue, from NPDC, some of it will come from the Federal appropriation, and just a little fraction will come from the African Export-Import Bank (Afreximbank).”
“The NNPC is going to spend about $200 million from its internally generating revenue sources, while the Federal appropriation will put in about $800 million and it is already broken down into three parts.
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“The 2020 appropriation will give $350 million, 2021 appropriation will give another $350 million, and 2022 appropriation will give another $100 million, making it all $800 million from appropriation, and then the rest of it will now come from Afreximbank,” the Minister said.
On the repayment of the loan, Sylva explained that going by the way the project was structured, the debt would be paid back from the operations of the refinery.
He insisted that the rehabilitation of the refinery would not really be a debt that would add to the general debt burden of the country, adding that a commercial discussion was ongoing between the NNPC and Afreximbank on how the money would be paid from the operations of the refinery.
In case you missed it
- The Federal Executive Council a few days ago approved the sum of $1.5 billion for the immediate rehabilitation of the 210,000 barrels per day Port Harcourt refinery.
- This has drawn a lot of criticism from Nigerians who expressed doubts in the government’s transparency towards the project. They also expressed their disapproval of the Federal Government’s decision to spend such a huge sum of money on an asset that they plan to sell.