The Oyo State House of Assembly, has approved Governor Seyi Makinde’s request for a N100 billion loan facility from United Bank for Africa Plc to aide the completion of ongoing infrastructure projects in the state.
The N100 billion loan is intended to provide additional funding for critical infrastructure development and facilitate the timely completion of ongoing projects across the state, while the accompanying N300 billion facility would be used to refinance an existing contractors’ finance facility obtained from Access Bank.
The lawmakers said “The financing arrangement would enable the State Government to reduce its borrowing costs, consolidate its contractors’ finance obligations with one financial institution and strengthen its capacity to deliver infrastructure projects.
“The N300 billion component is designed to facilitate the takeover by UBA of the existing contractors’ finance facility, which the state government had accessed through Access Bank at an interest rate of 26%.”
Under the proposed arrangement, UBA will provide the refinancing facility at an interest rate of 22%, representing a four-percentage-point reduction in the interest rate on the existing loan.
The lawmakers referenced major projects, including “the Ladoke Akintola University Teaching Hospital in Oyo town, the Rashidi Ladoja Circular Road and the Ido-Eruwa Road, among other ongoing infrastructure initiatives,” as examples of projects whose timely completion would contribute to economic growth, improved connectivity and better access to public services.
They said, “Completing ongoing projects would ensure that investments already made translated into tangible benefits for residents, while sustained infrastructure development would generate employment opportunities, stimulate commercial activities and improve the movement of people, goods and services across the state.”
With the Assembly’s approval, the N100 billion loan is expected to provide additional resources for critical infrastructure development, while the N300 billion refinancing arrangement will enable the government to transfer its existing contractors’ finance facility from Access Bank to UBA at a lower interest rate.
