Niger announced that it had succeeded in renegotiating the terms of a $980 million loan from China’s Export-Import Bank that covered the cost of building an oil refinery in the east of the West African nation.
The government called for an audit of the cost of the 20,000 barrel-per-day Soraz plant just days before it opened in November after the price tag rose to $980 million from the $600 million agreed at signing.
“The commercial loan from Exim Bank will be transformed into a preferential loan, which means the interest rate will not exceed 2 percent,” Mamane Mamadou, special advisor to President Mahamadou Issoufou, announced on state radio, Reuters reports.
Niger signed a $5 billion joint venture deal with Chinese oil company CNPC in 2008 to build the refinery and develop crude oil from the Agadem field a further 700 km east.
China’s Exim Bank initially made the loan at an interest rate of 3.5 percent reimbursable over 10 year, but lowered the rate to 3.1 during negotiations last year.
The Soraz refinery is 60 percent-owned by CNPC and 40 percent by Niger.
Niger, whose uranium supplies the French nuclear industry, initially put its oil reserves from Agadem at 268 million barrels, but the estimate has risen to 480 million barrels following tests.
Niger had already awarded four out of a total 35 blocks across the country, with Algerian state energy firm Sonatrach due to start drilling in the northern block of Kafra this year.