Nigeria Gives Up Waiting for China Eximbank Railway Loan

(Bloomberg) -- Nigeria said it won't wait any longer for the Export-Import Bank of China to finance a major part of a crucial railway project in Africa's biggest economy.

The government received from the state-owned lender only about 15% of the funding required for a line originally estimated to cost $8.3 billion that will link the commercial hub of Lagos to the northern city of Kano. President Muhammadu Buhari's administration has been expecting a response from the Chinese authorities regarding the rest of the loans, but hasn't received a reply, Transport Minister Rotimi Amaech said.

“We were waiting on the Chinese to give us the loans we applied for and till today they've not replied,” Amaechi told reporters Wednesday in Abuja. “They kept delaying us.”

The government has since approached Standard Chartered Plc and unidentified Chinese commercial banks to help fund the project, Amaechi said. Standard Chartered has approved some level of funding, he said. The London-based lender didn't respond to calls for comment.

China Eximbank's hesitancy is the latest setback to Buhari's plan to link all major regions of the country with railway lines by the time he leaves office next year. The West African nation needs to spend at least $3 trillion over 30 years on key national assets like roads, ports, pipelines and power plants to close a huge infrastructure gap, according to Moody's Investors Service.

Before the country's last election in 2019, the ruling All Progressives Congress promised to complete the Lagos-Kano line before the next nationwide vote, which is scheduled to take place in 12 months.

The Chinese Embassy in Abuja didn't immediately respond to an email seeking comment.

READ: Nigeria Taps StanChart to Replace China Loans for Rail Projects

Nigeria's government used a $1.3 billion loan from China Eximbank to fund a 157-kilometer (98-mile) segment of the Lagos-Kano railway as far as the city of Ibadan, but the rest of the line remains unbuilt. Buhari's administration last year turned away from China Eximbank to Standard Chartered to arrange funding for two other rail projects in other parts of the country anticipated to cost more than $14 billion.