The federal government on Wednesday announced the approval of $1.5 billion for the rehabilitation of the Port Harcourt Refinery that has been moribund for years.

Timipre Sylva, minister of state for petroleum, at the 38th virtual federal executive council meeting, said the rehabilitation is being done in three phases of 18, 24, and 44 months.

He noted that the funding has three components from Nigerian National Petroleum Corporation (NNPC) Internally Generated Revenue (IGR), budgetary allocations provisions, and Afreximbank.

Mr. Silva disclosed that the government has contracted the rehabilitation to an Italian company, Technimount SPA, known for its expertise in refinery maintenance.

“So we are happy to announce that the rehabilitation of the productivity refinery will commence in three phases. The first phase is to be completed in 18 months, which will take the refinery to a production of 90 percent of its nameplate capacity”, the state petroleum minister said.

In early January, foreign media reported that the Nigerian government is in talks to raise $1 billion to revamp the Port Harcourt refinery.

Reuters said the money would be repaid “over seven years through deliveries of Nigerian crude and products from the refinery once the refurbishment is complete, saying Cairo-based Afreximbank is leading the financing”.

NNPC boss Mele Kyari speaking on Arise TV in 2020 said the government has made substantial efforts over the last 25 years to make the facilities work “but there is something fundamentally wrong. Without properly knowing what we want to do with them it puts the cart before the horse.”

“The end result of this lack of certainty on the facilities is that we never got it right”. At the Port Harcourt refinery, NNPC now knows what the problem is and is securing financing,” Mr. Kyari said, adding that the government will have an O&M contract, NNPC will not run it.

“We will get someone who gives us a guarantee that this plant will run for a guaranteed time on the basis of a fee. Let’s try a different model”, he said.

“The end result will look more like the NLNG model,” Mr. Kyari said, with clear involvement from the private sector. “This is not just another promise,” the NNPC boss told Arise TV.