- China EXIM Bank agrees to pay total cost of $550m
The China EXIM Bank has agreed to pay the entire cost for the procurement of two new satellites from China by Nigeria.
The Minister of Communication, Alhaji Adebayo Shittu on Wednesday updated President Muhammadu Buhari on the approved procurement of two new satellites from China at the cost of US$550 million.
Speaking to State House correspondents after a closed-door meeting with the President at the Presidential Villa, Abuja, Shittu said, as reported by News Agency of Nigeria (NAN).
The Minister explained that the initial agreement was that the China EXIM Bank would provide 85 percent of the total cost, while Nigeria would pay the remaining 15 percent as counterpart funding for the projects.
He, however, stated that as Nigeria could not meet her obligation, the agreement was renegotiated with the China EXIM Bank and the manufacturer of the satellites, the China Great Walls.
“I’m in the Presidency to see Mr. President and to brief him on three major issues.
“One, NIGCOMSAT (Nigerian Satellite Company), which is one of our agencies where we hope to procure two new satellites from China.
“Initially the agreement was that they will provide the cost of the two satellite 550 million dollars minus 15 per cent which is the counterpart funding.
“Because we could not afford this 15 percent, we have renegotiated with the China EXIM Bank and the China Great Walls who are the manufacturers and they have happily agreed to pay the entire $550 million to procure two new satellites,” he said.
The Minister stated that the new satellites would ensure that NICOMSAT would conquer the entire African continent with regard to the provision of satellite communication services.
He said that the Chinese had appreciated the potential market that existed in the satellite business in Nigeria and the African continent.
“This is a very big business opportunity and I am sure that the Chinese appreciate the potential market which is so vast. And that is why they have agreed that even without our ability to contribute 15 percent, they are prepared to pay the entire sum of $550 million for the procurement of the two new satellites for Nigeria,” he added.
Shittu revealed that the production of the satellites would commence immediately the final agreements were signed.
He said: “It takes two years to produce because it is when we sign the papers they will start production.
“We hope that before the end of this month we will sign the papers and then they will commence the production. It is the completion of the production that the two satellites will be launched.”
He added that Nigeria had nothing to lose because the country would not put anything into the project in terms of financial resources.
“The President was excited and was not surprised because the Chinese are not just going to market our satellite to the entire African continent but also perhaps by legislation insists that all Nigerian entities must patronise the Nigerian satellite company rather than going to Israel, UK, US for satellite services.
“Now we can say by our local content policy we must patronise Nigeria,” he said
“The major issue is not about employment but by providing satellite services to all companies which require it.
“Currently most Nigerian companies and even Nigerian government establishments patronise foreign satellite companies. So the first thing is that we want to make profit, we want to capture the local market and we also want to capture the African market,” he added. (NAN)