China Development Bank Becomes New Financier To Complete Kaduna-Kano Rail Project

Senate has announced that China Development Bank has become the new financier to complete the Kaduna-Kano Rail Project.

NaijaOnPoint Nigeria reports that the Nigerian Senate has announced the China Development Bank as the new financier for the Kaduna-Kano rail modernization project, signaling the project’s path to completion.

This change follows the withdrawal of the previous financier, China Exim Bank, in 2020 due to issues related to the COVID-19 pandemic, according to a statement by Special Assistant to President Bola Tinubu on Social Media, Dada Olusegun.

The Kaduna-Kano railway, a 203-kilometer standard-gauge line, is designed to link Kano to Nigeria’s capital, Abuja.

President Bola Tinubu has reiterated his commitment to completing the broader Ibadan-Abuja-Kaduna-Kano railway project, continuing the strides made by his predecessor, Muhammadu Buhari, in revolutionizing Nigeria’s railway infrastructure.

Approved $255 million in funding

In January, the China Development Bank approved $255 million in funding for the Kaduna-Kano segment of the railway, currently under construction by the China Civil Engineering Construction Corporation (CCECC).

The project includes new stations at Rigachukun, Zaria, and Kano and will connect with the Lagos-Ibadan and Kano-Maradi rail lines, enhancing access to Abuja.

The China Development Bank reaffirmed its support for the project in a statement, highlighting its potential to transform regional connectivity.

“Once completed, it will provide direct rail connectivity between Kano, an important northern city in Nigeria, and the country’s capital Abuja, offering local residents a safe, efficient, and convenient mode of transportation,” the bank stated.

What you should know

• The $973 million project has faced delays caused by funding challenges. Last year, the Minister of Transportation, Saidu Alkali, noted that China is supporting the Kaduna-Kano and Ibadan-Abuja segments of the Lagos-Kano railway under the Belt and Road Initiative.
• Most of these rail projects operate under the EPC+F model (Engineering, Procurement, Construction, and Financing), which requires 15% counterpart funding from Nigeria’s federal government, with 85% sourced through loans.
• However, securing loans has been difficult due to financial institutions’ concerns about the high risks associated with railway projects.

The Minister explained that the government approached China to secure funding for these key infrastructure projects. In response to concerns, President Tinubu assured Nigerians that the railway project would be completed to benefit Nigeria and West Africa as a whole.

“The Ibadan-Abuja-Kaduna-Kano railway project will be completed to the satisfaction of Nigeria and West Africa at large,” he emphasized.

The Federal Government recently announced that construction on the Kaduna-Kano rail line is expected to be completed by the end of this year.

Additionally, the government expressed plans to commence a high-speed rail project from Abuja to Lagos within the same time frame.

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