Foreign banks jostle for $1.5bn Lekki deep seaport

Foreign banks have expressed interest in the $1.5 billion Lekki Deep Seaport as a way of enjoying a slice of the gigantic venture. The multi-million naira seaport project, expected to become operational in 2018, is a Private-Public-Partnership (PPP) deal between the Federal Government (represented by the Nigerian Ports Authority), the Lagos State Government and a private investor, the Tolaram Group.It has a 25-year concession period under a Build, Operate and Transfer (BOT) arrangement. A shareholders’ agreement to seal the deal was signed in December 2012 among all three parties.

According to the Chief Financial Officer of Lekki Port, Sandeep Parasramka,  the Lagos State Government’s equity and that of the Tolaram Group are in place, while NPA is in the process of making its equity contribution to the project.

He also revealed that foreign banks have expressed interest in investing in the project described as one of Nigeria’s biggest private/public partnership deals expected to revolutionise the maritime sector and spur unprecedented economic growth.

“Lekki Port will have significant positive macroeconomic impact estimated at $361 billion over the entire concession period. It is expected to contribute more than $200 billion to the government treasury while also creating close to 163,000 new jobs in the economy,” he stated.

Highlighting the foreign banks’ investment flow, Parasramka revealed that the African Development Bank (ADB) recently obtained board approval for $150 million funding for the project.

“Again, European Investment Bank, which is very eager about investing in the project has also received principal board approval, which would see them support the project  with funds also. A few more international banks which are also in the process of securing their board approval are also going to join the list of banks investing in this laudable initiative.

“All the banks are very keen to participate in the project given its strategic importance, competitive advantage, good financial returns, strong government support and unprecedented economic value it is expected to inject into the economy.

“With this development, the much anticipated funding from shareholders expected to fuel rapid construction of the Lekki Port will now be plowed into the project, so that the next phase of development can commence in earnest. “Again, NPA has carried out and concluded its due diligence on the project through a credible auditor, KPMG, to ensure accountability, transparency and value for money of the project, which is essential and crucial to a project of this magnitude. The NPA on its part has also received its Federal Government budget approved by the National Assembly,” he hinted.

Parasramka stressed that the project recently received a major boost with the conclusion of the due diligence required by one of its key investors, NPA. He said the development puts the project on a firm footing to ensure the 2018 target is realised.

The CFO further stated that aside getting the concession from NPA to build Lekki Port, the Tolaram has put together leading global consultants such as Standard Chartered Bank, the Louis Berger Group Inc., Delta Marine Consultants, BMT Asia Pacific, TBA Netherlands, Jardine Lloyd Thompson Pte Ltd and GMaps.

“The EPC contractor, China Harbour Engineering Company has been appointed to build the port and the container terminal sub-concessioned to International Container Terminal Services, Inc, Philippines, a leader in the container terminal operations with footprints across the globe”, he stated.

He expressed optimism that the project will make Nigeria the gateway to the West African region and will be one of the most efficient and modern maritime facilities, catering for containerized, liquid and dry bulk cargo par international standards.

“The stage we are in now is structuring the financial terms, which will take a short period before funding is made available to Lekki Port.  It is only normal that when you do such a large financing of a huge project such as this, it takes more time than building a house” said Mr. Parasramka.