Hardships faced by motorists plying the Lagos-Ibadan Expressway and those crossing the River Niger may soon abate as the Nigeria Sovereign Investment Authority (NSIA) this afternoon announced that it has concluded funding arrangements for the two projects.
This assurance came following the signing of memorandum of understanding between NSIA and the investment arm of Julius Berger Nigeria Limited. Construction of Second Niger Bridge will now be flagged off next month.
While announcing the first Motorways Investment in the Second Niger Bridge, Managing Director/Chief Executive Officer of NSIA Mr. Uche Orji said “we are now lead partner in the consortium with responsibility to invest our equity and attract other equity partners and raise debt for this project”.
Orji also announced that his firm was negotiating with the Infrastructure Bank, which President Goodluck Jonathan had earlier mandated to source for funds to finance the Lagos-Ibadan road project.
“This is a first but crucial step in the process and post signing this cooperation agreement, we are now negotiating the concession agreement and thereafter we will announce a timetable for getting to financial closure.
“The agreement signed today between Julius Berger and NSWIF is very crucial. Following this, we are now negotiating a concession agreement and thereafter will announce a time to close the financial deal. Between Julius Berger equity and soft commitment from other partners and government’s critical funding, we are confident that the flag-off ceremony can commence in March. We are also neck deep in negotiations regarding the Lagos-Ibadan Expressway.”
NSIA already has soft commitment from potential equity partners, Orji stated while adding “this will be the first federally tendered PPP project in Motorways in Nigeria and we believe the negotiated construction cost will be bankable in the current structure”.
Concerning the Lagos-Ibadan Expressway, the authority has been engaged in negotiation for over 10 months regarding the project as the other core infrastructure investment.
Of the initial $1 billion funding given to NSIA, $200 million was allocated to the Stabilisation Fund; $400 million went to the Future Generation Fund; and $400 million devoted to Infrastructure Fund.
The Stabilisation Fund has already been allocated to three portfolio managers, Orji explained while saying that there were expectations of modest positive returns.
NSIA has also incorporated five subsidiary companies including NSIA Motorways Company Limited, NSIA Power Investment Company Limited, NSIA Healthcare Investment Company Limited and NSIA Real Estate Investment Company Limited. These are the companies through which investments would be made into the five initial infrastructure focus areas.
Aside the $1 billion invested by the Federation, the Federal Government has recently given $550 million to NSIA for investment. Of the $550 million, $350 million has been allocated to the Stabilisation Fund while the balance of $250 million went to Nigeria Infrastructure Fund. The authority also recently signed an MOU with AMA-Sinohydro to collaborate on investment opportunities in hydro electric power plants, multipurpose dams, real estate, transportation infrastructure and other areas.
NSIA CEO then informed correspondents that together with $100 million earlier allocated to power funding from the $400 million infrastructure fund, there is now a pool sizeable amount available for the Authority to provide as counterpart funding for other investors interested in the sector.
By Sanya Adejokun