• Thursday, May 30, 2024
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Lekki port seeks $1.1bn facility from banks


A syndicated loan facility of $1.05 billion is being put together by six banks to support the construction of Lekki port which on completion will handle 1.5 million containers in the early stage of its existence.

The banks are African Development Bank (AfDB), African Finance Corporation (AFC), Standard Chartered Bank, Global Investment Bank, Stanbic Bank and Standard Bank.

An estimated $1.5 billion is the total capital required for the project of which $450 million equity has been provided and currently funding on-going construction works at the site.

Lekki port, a new deep sea port at the Lekki axis of Lagos State, is the product of the December 17, 2012 agreement by the Federal Government, Lagos State government and a consortium of private investors. It is to complement the existing overstretched Tin-Can and Apapa ports.

Haresh Aswani, managing director, Lekki Port, told BusinessDay that discussions with the banks are at advanced stage and the process would be closed by September this year.

“The total cost is about $1.5 billion, of which the equity is about $450 million and we intend to raise the balance in debt. We have been meeting the banks for a year now. They have investigated the project and seen the site. They are very comfortable with the project.

“The stage we are now is structuring the terms and that may take another month to agree on because of the huge capital involved. We intend to financially close the process probably by September or October this year”, said Aswani.

Ownership structure of Lekki port comprises Lagos State government with 20 percent equity; the Federal Government through Nigerian Ports Authority (NPA) has 20 percent, while the remaining investors are Lekki Port, some consortium from overseas and some Nigerians.

Already, Lagos has provided $18.5 billion and is part of the equity currently in use for construction works at the site.

Construction work is scheduled for 40 months or at most three and half years, according to Aswani, who said the new port will boost the state’s economy significantly and also tackle the problem of ports congestion.

Louis Berger Group (LBG), because of its experience in Africa and the magnitude of the project, is the contract consultant and its specific function is supervising the works.

“They have done some jobs in Africa and probably rated as number three in America or in the world. LBG will monitor to ensure the contractors perform and develop according to specifications. Some of us including NPA have our engineers to monitor as well. So it is a three prong approach”.

Already, work on the site is between five and 10 percent completion and plans have been concluded to bring in equipment from Belgium and Denmark by September to begin the dredging of the sea to meet up with the size intended.

“The vessels that berth at our ports now are about 2000 TUs because they don’t have enough space, we are going to dredge to 16mbs to make Lekki port bigger to allow vessels of 8,000 to 10,000 TUs containers come in. What that means is that it can take four size of the vessels that are currently berthing at our ports”, Aswani said.