President Bola Ahmed Tinubu has asked the Senate to approve a $516.33 million loan to fund the construction of the Sokoto-Badagry Super Highway.
The funding is expected to come through a syndicated financing facility from Deutsche Bank, according to a letter sent to the Senate on Thursday.
He wrote, “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 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.
“The Federal Executive Council has approved the financing arrangement and its terms.”
The President outlined the scope of the project and its expected impact on the country.
“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 explained.
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“The project is expected to: Enhance north–south connectivity and road safety. Improve network performance along the corridor. Reduce logistics costs and travel time. Facilitate trade and strengthen food security.
“Promote national integration by linking production zones to markets and ports. Provide long-term intermodal flexibility through provision for future rail integration and utility corridors.”
The request was read on the Senate floor by Senate President Godswill Akpabio and referred to the Senate Committee on Local and Foreign Debts.
The committee, chaired by Aliyu Magatagarda Wamakko, has been given one week to report back.
Before the referral, Senator Adamu Aliero backed the project, saying it would cut travel time between Sokoto and Lagos from 13 hours to about six hours when completed.
Akpabio, while concluding the debate, said borrowing remains acceptable if used for productive purposes.
“It is better to borrow for projects”, he stated.