The Oyo State House of Assembly has approved a ₦100 billion loan facility from United Bank for Africa Plc to support infrastructure development and accelerate the completion of ongoing projects across the state’s 33 local government areas.
The approval followed a request by Governor Seyi Makinde in a letter addressed to the Speaker of the House, Adebo Ogundoyin, which was read during plenary on Wednesday.
The proposed ₦100 billion facility is intended to finance critical infrastructure projects, while a separate ₦300 billion facility will be used to refinance an existing contractors’ finance arrangement obtained from Access Bank.
During deliberations, lawmakers said the refinancing would help the state reduce borrowing costs, consolidate its contractors’ finance obligations under one financial institution and improve its capacity to deliver infrastructure projects.
The existing ₦300 billion facility from Access Bank carries an interest rate of 26 per cent. Under the proposed arrangement, UBA will take over the facility at an interest rate of 22 per cent, representing a reduction of four percentage points.
The lawmakers said the arrangement would ease the state’s financing burden and allow the government to manage its contractors’ finance operations through UBA, subject to agreed terms and conditions.
The separate ₦100 billion loan will also attract an interest rate of 22 per cent, subject to adjustments in line with prevailing money market conditions. It has a repayment period of 48 months.
Other terms include a management fee of 0.25 per cent per annum on the outstanding amount and an annual advisory fee of 0.5 per cent on the outstanding balance.
The agreement also provides for a three-month moratorium on the repayment of both principal and interest. Interest accrued during this period will be repaid alongside the fourth, fifth and sixth loan instalments, respectively.
Contributing to the debate, Deputy Speaker Abiodun Fadeyi, alongside Gabriel Adebayo, representing Ibadan North II; Olorunpoto Rahman, representing Oyo East/Oyo West; and Sunkanmi Babalola, stressed the importance of sustained infrastructure investment in driving development across the state.
They cited projects such as the Ladoke Akintola University Teaching Hospital in Oyo town, the Rashidi Ladoja Circular Road and the Ido-Eruwa Road as examples of infrastructure initiatives whose timely completion could support economic growth, improve connectivity and expand access to public services.
According to the lawmakers, completing ongoing projects would help residents benefit from investments already made, while further infrastructure development could create jobs, stimulate commercial activities and improve the movement of people, goods and services.
With the Assembly’s approval, the ₦100 billion loan is expected to provide additional funding for infrastructure projects, while the ₦300 billion refinancing arrangement will allow the state government to transfer its existing contractors’ finance facility from Access Bank to UBA at a lower interest rate.
Source: PUNCH
