The fund according to the Finance Minister, Dr. Shamsudeen Usman is to help rehabilitate the nation's contemptibly poor infrastructure.

Already, a Memorandum of Understanding (MOU) has been signed between the Africa Finance Company (AFC) on the one hand; and the Managing Directors of Zenith Bank, Oceanic Bank and First Bank on the other on behalf of other Nigerian financial institutions with the Chinese Export Credit Guarantee Agency called SINOSURE for the purpose.

The Finance Minister made this known at a briefing yesterday in Abuja.

"This is the money that they will make available to any private sector or public sector arrangement. The way they want it utilized is that it is not likely to be money that the government will borrow so that

Nigerians will not be afraid that we have gone to bring back the debt that has been repaid. It is funds that will be made available through Nigerian companies to be able to participate in the funding of infrastructure in Nigeria,'' the Minister explained yesterday.

He also said that Beijing has also converted commercial credit worth $2.5 billion contracted under the immediate past administration to concessionary loans.

The development is the outcome of a recent visit by

President Umaru Musa Yar'Adua to that country, the Finance Minister added.

In another development, Usman yesterday said the

Chinese Government was desirous of investing in the Nigerian oil corporation and would soon be making a foray into Abuja for an investment survey.

The minister explained that the positive development was the outcome of a new wave of partnership the nation was cultivating in the Asian region.

"First of all, I think it is important to understand that the President's trip to China was extremely successful because it brought out framework for strategic relationship between Nigeria and China.

This relationship was agreed upon. We have got our traditional partners, mostly Europe and the United

States. What we are trying to do now is to cultivate some new strategic partners who seem to be much more willing to actually engage positively with Nigeria especially in terms of addressing key infrastructural constrains that we have,'' Usman stated.

The Minister revealed that under the previous administration, the Chinese government had extended basically two facilities totalling $2.5bn to Nigeria.

The first part of the facility, he said, was a

$0.5b which was supposed to be more concessionary, because it was a government to government lending, while there was another $2bn facility granted by the Chinese bank, both amounting to $2.5bn.

"Since Nigeria left the Paris Club Debt, we have not been taking commercial loan. We insisted that any loan that Nigeria takes must be extremely concessionary.

"There is a technical formula that can be used to calculate the degree of concessionality and when we calculated for these two loans, I think it was an average of about 21 per cent which is not as high as minimum of 35 per cent that Nigeria requires to borrow.

"Part of the success of the trip was that we were able to engage the Chinese authorities and really renegotiate these loans to the level that the

concessionality in them is increase to about 38 per cent. The minimum Nigeria requires for degree of concessionality is that it must not be less than 35 per cent.

"These loans were renegotiated to the level of 38 per cent. That was a very important achievement. Clearly, we have finished with the $0.5billion. On the $2billion, we have reached substantial agreement with the Chinese authorities and anytime from now we hope that the deal can be sealed,'' he further said.

He said: "During the trip, the Minister of Petroleum had some meetings with the China National Oil Corporation to discuss any area in which they are interested in oil and gas subject to due process. We made it clear to them that whatever is done will be subject to the necessary due process.

"A delegation of the China National Oil Corporation is due to arrive in the country in the next couple of weeks to actually start engaging with our authorities in the Nigerian oil industry in order to advance the discussion.