The Oyo State House of Assembly has approved a N100 billion fresh loan facility for Governor Seyi Makinde’s administration to accelerate infrastructure projects, alongside a separate N300 billion refinancing arrangement for an existing contractors’ finance facility.
The approval, granted during plenary on Wednesday, followed a request from Makinde contained in a letter addressed to the Speaker, Rt. Hon. Adebo Ogundoyin.
Under the arrangement, United Bank for Africa (UBA) Plc will provide the new N100 billion facility, which the government plans to deploy to critical infrastructure projects and the completion of ongoing developments across the state.
The separate N300 billion facility is designed to refinance an existing contractors’ finance arrangement secured by the state government from Access Bank.
The existing facility carries an interest rate of 26 per cent, while the proposed UBA refinancing will attract 22 per cent, representing a four-percentage-point reduction.
Lawmakers said the refinancing would reduce the state’s borrowing costs and consolidate its contractors’ finance obligations with one financial institution.
The new N100 billion loan carries an interest rate of 22 per cent, subject to review in line with prevailing money market conditions, and has a 48-month tenor.
Its terms include a management fee of 0.25 per cent per annum and an advisory fee of 0.5 per cent annually, both calculated on the outstanding balance.
The facility also provides for a three-month moratorium on repayment of both principal and interest.
Interest accruing during the moratorium will not be waived.
Instead, it will be repaid alongside the fourth, fifth and sixth instalments of the loan.
During deliberations, Deputy Speaker Muhammad Abiodun Fadeyi and lawmakers including Adebayo Babajide Gabriel, Olorunpoto Cephas Rahman and Sunkanmi Babalola stressed the importance of sustained investment in infrastructure.
They cited projects such as the LAUTECH Teaching Hospital in Oyo town, Rashidi Ladoja Circular Road and Ido-Eruwa Road as examples of ongoing projects whose completion could improve connectivity, access to public services and economic activity across the state.
According to the lawmakers, completing projects already under construction would help translate government expenditure into tangible benefits for residents.
They also linked continued infrastructure investment to job creation, increased commercial activity and easier movement of people and goods.
The Assembly’s approval gives the Makinde administration legislative backing to proceed with both financing arrangements.
The combined value of the two approved financing arrangements is N400 billion, although only N100 billion constitutes fresh borrowing under the proposal.
