The Board of Directors of the African Development Bank (AfDB) Group has approved a loan of $85 million to help finance the upgrade/rehabilitation of the Lekki to Epe expressway, linking Victoria Island with the Lekki peninsula in Lagos, Nigeria’s economic capital.

A statement issued by the bank said the loan was approved by the bank’s board at a meeting in Tunis, Wednesday.
The project consists of upgrading, widening and tolling of the existing 49.5km long Lekki–Epe Expressway, which is the principal road artery linking Victoria Island in Lagos with the Lekki peninsula.

The objective is to alleviate traffic congestion and improve road safety along the Lekki corridor. It is based on Public-Private Partnership (PPP) under the Design, Build, Operate (DBOT), and Transfer and Rehabilitate, Operate (ROT) framework/business model.

The first phase of the project will involve the upgrade/rehabilitation of the existing 49.5km long expressway, the construction of a new ramp to carry traffic onto the Falomo bridge, construction of new interchanges, footbridges, walkways and bus stops along the expressway, construction of 6 kilometers of the new 20-km long coastal road (which will serve as an alternative road up to toll plaza 1), and build 10 interconnecting link roads between the Expressway and the coastal road respectively.

The company will also construct three toll plazas along the Expressway and will be responsible for the operation and maintenance of the toll road during the concession period.

Phase two consists of building the remaining 14 km of the coastal road, and is contingent on the Lagos State Government‘s completion of the civil works on the new coastal defences (to check erosion) that will require additional financial resources.

The project sponsors, Asset and Resource Management Ltd, a reputable local firm, is partnering with Larue Projects Ltd. (Larue) as joint sponsors and, together, they play the role of “key investor” to the project.

As part of its due diligence, the Bank developed a detailed in-house financial model to quantify the economic benefits to the various stakeholders. The model results showed that the main beneficiaries of the project are the Nigerian road users who will enjoy a net consumer surplus of N41.7 billion in present value terms.

It is Furthermore the Lekki toll road project will considerably alleviate the highly congested traffic situation in Lagos especially during rush hours.

On completion, the toll road is expected to reduce travel times while improving road safety and security, lower vehicle operating costs for road users, create jobs, and provide much needed and well-maintained transportation infrastructure which will lead to an increase in business activities along the corridor.

The project is expected to create 635 short-term and 1,146 long-term jobs with a good proportion of the employees being women. Labour benefits have an estimated present value of NGN 1.1 billion, which represents the difference between the current earnings of labour and wages paid by the project.

The bank said the project is in line with Pillar II (the development of the non-oil sector) of the Bank’s country strategy paper (CSP) for Nigeria covering the period 2005-2009.

Source: Vanguard