The Minister of State for Petroleum, Timipre Sylva, has condemned the backlash that followed news that the Nigerian government will spend $1.5 billion on rehabilitation of Port Harcourt refinery.
A total of $1.5 billion has been proposed by the government to fund the project – a decision that has sparked controversy and debates in various parts of the country.
Speaking on Channels Television's programme on Sunday, he said he did not know how the government could please Nigerians after the puic criticism, when Nigerians have themselves been requesting for functional refineries.
He said, “Sometimes, I wonder what we can do to please Nigerians, everybody at every turn asked when are we going to fix our refineries? When are we going to rehabilitate our refineries? Now we are rehabilitating the refineries and we got professionals involved, but unfortunately, it is generating all these."
According to the minister, the rehabilitation of the Port Harcourt refinery in Rivers State will not significantly add to the nation’s debt burden.
Dismissing fears that the project would worsen the nation’s debt profile, he said the government does not intend to borrow all the funds to rehabilitate the refinery
Noting that the refinery will be functional in 18 months, Sylva disclosed that a subsidiary of the Nigerian National Petroleum Corporation (NNPC) – Nigerian Petroleum Development Company Ltd (NPDC) – and others would contribute the money to be used for the project.
He said he federal appropriation will contribute $800 million to the project.
He added, “Let me tell you how this rehabilitation is going to be funded; it is not going to be all debts, we are not going to borrow all the monies that are going into the rehabilitation (project).
“Some of the money will come from NNPC’s internally generated revenue – from NPDC, some of it will come from the Federal appropriation, and just a little fraction will come from the African Export-Import Bank (Afreximbank).”
The minister assured that there was no need for Nigerians to worry about how the loan to be secured would be repaid.
He explained that going by the way the project was structured, the operations of the refinery would pay back the funds to be used.
Sylva insisted that the rehabilitation of the refinery would not really be a debt that would add to the general debt burden of the country.
According to him, a commercial discussion between the NNPC and Afreximbank on how the money will be paid from the operations of the refinery is ongoing.
He said, “Because of the way it is structured, the operations of the refinery will be able to pay back.
"It is not really a debt that will add to the general debt burden of Nigeria. It is a commerical discussion that is going on between NNPC and Afrexim and that money will be paid from the operations of the refineries.”
Giving a further breakdown of how the money would be sourced, the minister said, “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.”