The federal government on Sunday disclosed that the operations of the Port Harcourt refinery would be responsible for the repayment of the $1.5 billion to be spent on rehabilitation of the refinery approved by the Federal Executive Council (FEC) last week. The Minister of State for Petroleum Resources, Timipre Sylva, clarifying the decision, disclosed that part of the projected cost would be derived from the internally generated revenue of the Nigerian National Petroleum Corporation (NNPC), an NNPC subsidiary, the Nigerian Petroleum Development Company Ltd (NPDC), as well as others expected to make contributions for the rehabilitation of the refinery.
The minister stated that the cost of rehabilitation of the refinery would not be solely dependable in generating fresh loans. He, however, disclosed that the NNPC is already having a commercial negotiation with the Afreximbank on the repayment of the fund, which he said would be paid from the operations of the refinery. Sylva affirmed that the project is being structured in ways that the operations of the refinery would pay back the funds to disbursed for its rehabilitation.
Sylva highlighted the sources of the rehabilitation funds as follows: “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.”
According to the minister’s explanation, the Nigerian government would provide over 50% of the rehabilitation cost while less funds would be derived from loans to complement the rehabilitation.