The federal government has disclosed that funding for the proposed rehabilitation of the Port Harcourt refinery won’t all be borrowed.
This was disclosed by the Minister of State for Petroleum Resources, Timipre Sylva, in an interview with Sunday Politics on Channels TV on Sunday.
He explained that the project estimated to be complete in 18 months won’t be fully funded by borrowed monies but would receive contributions from other sources.
Sylva said that the decision of the FG had raised some dust despite calls from Nigerians to rehabilitate the refineries.’
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).”
Listing some other sources of funding, Sylva said that the Nigerian National Petroleum Corporation (NNPC) and the African Export-Import Bank (Afreximbank) would be contributors, and some would be generated from “the Federal appropriation”.
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).
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“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).”
Breaking down the funding from each of the above-listed sources of funding, the minister said, “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.
“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 federal government had announced that the sum of $1.5 billion would be channeled into the revamping of the Port Harcourt refinery.
This raised some dust among Nigerians who say that the refinery had been nonfunctional for years and that the project was fruitless.
Many pointed to the volatility of the oil market and the pivot from crude oil to other cleaner sources as is experienced globally.
The government said that the project would be completed in three phases.
“The first phase is to be completed in 18 months, which will take the refinery to a production of 90 percent of its nameplate capacity.
“The second phase is to be completed in 24 months and all the final stage will be completed in 44 months and consultations are approved,” it said.