The National Sugar Development Council has said Nigeria will need $7.1 billion in investment over the next 10 years to achieve self-sufficiency in sugar production. The council is seeking long-term financing to expand existing estates and develop new projects.

The Executive Secretary of the council, Kamar Bakrin, disclosed this at a news conference organised by the Commerce and Industry Correspondents Association of Nigeria in Abuja.

He said the programme would cover existing sugar estates, 10 proposed new projects and the supporting infrastructure needed to boost domestic production.

“This entire programme we are talking about is about $7.1 billion for Nigeria to attain self-sufficiency over a 10-year period,” Bakrin said.

Bakrin explained that about $5 billion of the projected investment would come from long-term debt facilities and development capital, while project promoters and operators would provide the remaining $2.1 billion.

The proposed debt financing comprises $3 billion from export credit agencies, $1.75 billion from other development finance institutions and $250 million from local development finance sources.

The council said the funding structure reflects the capital-intensive nature of sugar production and the difficulty of financing projects with long development periods through conventional commercial loans.

“Commercial loans cannot finance this sugar sector. That one, I think we know. Also, loans attracting interest rates of between 15 and 28 per cent over five years cannot support the industry’s financing requirements,” Bakrin said.

Bakrin disclosed that the council had signed a $1 billion agreement with Chinese group Sinomach, covering engineering, procurement, construction and financing for sugar estates.

“About $1 billion has been signed with Sinomach and that will go directly to the estates as soon as we get to financial close,” he said.

He added that the council had developed similar engineering, procurement and construction financing frameworks with Chinese and Indian entities.

The NSDC is also working with the Bank of Industry on a ₦10 billion Sugar Project Acceleration Fund, designed to finance feasibility studies and help establish the bankability of proposed projects.

Bakrin said the council was engaging Afro-Asian Bank and other development agencies to facilitate financing. He added that the council had taken an active role in sourcing capital to speed up implementation.

“While I can say that it is not basically NSDC’s job to go and look for the money, we have taken it upon ourselves to aggressively facilitate the sourcing of this funding,” he said.

Nairametrics previously reported that the NSDC was pursuing sugar self-sufficiency through a $1 billion investment partnership and a ₦10 billion project acceleration fund, intended to support domestic production and reduce reliance on imports.

The council and the Bank of Industry also launched the ₦10 billion Sugar Project Acceleration Fund to support greenfield sugar projects across Nigeria.