Business Hilights
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Delays in funding agreements hampering progress at Lekki Deep Seaport–ICRC

Real cause of slow construction activities at the proposed Lekki Deep Seaport site in Lagos has been unveiled.

Speaking during an assessment tour of the seaport on Friday, the Director-General, Infrastructure Concession Regulatory Commission (ICRC), Chidi Izuwah said the concessionaires were hampered by finance because all the agreements expected to be signed to raise the needed funds were not signed.

According to him, “The commission is worried that several years after the execution of the contract, the concessionaire is yet to attain financial close on the project as a result of certain contingent challenge. The project promoters had earlier planned to attain financial close by the second quarter of 2016 and commence full operations by the second quarter of 2019, thereby giving a period of three years for the construction work.”

However, about six banks, including the African Development Bank (AfDB), had signed pact with the promoters of the project, Tolaram Group of Singapore, to finance the proposed $1.5bn port project.

Additional financial institutions that embraced the scheme include the African Finance Corporation (AFC), European Investment Bank (EIB), Standard Chartered Bank (SCB), South Africa’s Rand Merchant Bank (RMB), and Standard Bank.

Business Hilights also gathered during the tour that currently, the Nigerian Ports Authority (NPA) and the Lagos State Government (LASG) have shares in the project and even the LASG recently increased its equity shares to 18.5 per cent and paid in full.

Also, the NPA, who doubles as the landlord to the concession, holds 20 per cent equity shares and is said to have so far paid about $23m out of a total commitment of $110.9m.

Currently a total of about $150m raised from equity in the project has been injected in the scheme.

In his review of the development, Izuwah said “I promise you that the ICRC under my leadership will go above and beyond the call of duty to assist you reach financial close. We are willing to join you on ‘focused lender/investor road shows to seek additional debt and equity capital.

“We will also play a key role in driving the creation of an inter-governmental and agency high impact team to solve some of the project’s immediate problems like a high capacity evacuation route from the port site to assure investors and lenders that all containers and goods arriving at the ports will be evacuated flawlessly and efficiently.”

According to him, one of the best ways to grow local content and create jobs includes good use of local engineers and technicians as well as local raw materials for the project.

Responding before the ICRC DG, the General Manager, Projects at Lekki Port LFTZ Enerprise, Mr. Steven Heukelon, said that concrete was already being mixed to construct the quay wall around the breakwater ocean.

He further assured that in two weeks’ time, massive construction would begin where more jobs would be created.