UPDATED: Tinubu Seeks Fresh $516m Foreign Loan For Sokoto-Badagry Road Project

President Bola Tinubu is seeking a fresh $516m loan for the construction of the Sokoto-Badagry super highway.

The president’s request was contained in a letter to the Senate, which was read at plenary on Thursday by the President of the Senate Godswill Akpabio.

The letter stated that the borrowing is a “syndicated financing facility from Deutsche Bank in the total sum of US$516,333,007 for the execution of Sections 1, 1A, and 1B of the Sokoto–Badagry superhighway project.”

The president further stated in the letter, “The purpose of this communication is to formally request the resolution of the National Assembly, pursuant to the provisions of Sections 16 and 21 of the Debt Management Office (Establishment) Act, 2011, to approve a proposed foreign financing arrangement of a syndicated loan facility of US$516,333,007 for the construction of the Sokoto–Badagry Superhighway Project.”

“The inclusion of the said financing in the Federal Government’s borrowing plan, as earlier approved by the National Assembly.
The Senate is invited to note that the Sokoto–Badagry Superhighway is a flagship infrastructure initiative under the Renewed Hope Agenda.

“The project is designed to open up Nigeria’s Northwest–Southwest economic corridor through the construction of an approximately 1,000-kilometre high-capacity carriageway, linking Sokoto, Kebbi, Niger, Kwara, Oyo, Ogun, and Lagos States, stretching from Illela to Badagry.”

Tinubu added that the highway project is expected to
enhance North–South connectivity and road safety,
improve network performance along the corridor, reduce logistics costs and travel time,
and facilitate trade and strengthen food security.

The president said the road project will also promote national integration by linking production zones to markets and ports, and provide long-term intermodal flexibility through provision for future rail integration and utility corridors.

Continuing, the presidential correspondence said,
“The proposed financing arrangement comprises a syndicated loan to be secured through Deutsche Bank AG, supported by a partial risk guarantee from the Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC), the insurance arm of the Islamic Development Bank.

“The Federal Government will provide counterpart funding in the sum of ₦265,542,689,569, covering land acquisition, compensation, and ancillary infrastructure.”

The government said the loan has a tenure of nine years, including a grace period of up to three years, with an interest rate not exceeding the Chicago Mercantile Exchange (CME) SOFR plus 5.3 percent per annum.

It added that the Federal Executive Council has approved the financing arrangement and its terms.

“In light of the foregoing, approval is hereby requested from the National Assembly for:
The syndicated loan facility of US$516, 333, 000.”