Oyo State House of Assembly has approved a N100 billion loan from United Bank for Africa (UBA) Plc for infrastructure development and a separate N300 billion facility to refinance an existing contractors’ loan obtained from Access Bank.
The approvals followed a request by Governor Seyi Makinde in a letter read to lawmakers by the Speaker, Adebo Ogundoyin, during plenary.
The N100 billion facility is expected to provide additional funding for critical infrastructure projects and accelerate the completion of ongoing developments across the state.
The N300 billion refinancing arrangement, on the other hand, is designed to enable the state government to transfer its existing contractors’ finance obligation from Access Bank to UBA at a lower interest rate.
Under the proposed arrangement, the existing facility carries an interest rate of 26 per cent, while the new refinancing facility will attract 22 per cent, representing a four-percentage-point reduction in borrowing costs.
The fresh N100 billion loan will also attract an interest rate of 22 per cent, subject to review in line with prevailing money market conditions, with a repayment period of 48 months.
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 principal and interest repayments, with interest accruing during the period scheduled for repayment alongside the fourth, fifth and sixth instalments.
Contributing to the debate, Deputy Speaker Muhammad Abiodun Fadeyi and lawmakers Adebayo Babajide Gabriel, Olorunpoto Cephas Rahman and Sunkanmi Babalola emphasised the importance of sustained investment in infrastructure to economic growth and improved living conditions.
They cited the LAUTECH Teaching Hospital in Oyo town, the Rashidi Ladoja Circular Road and the Ido-Eruwa Road as examples of ongoing projects whose completion would improve connectivity and access to public services.
The lawmakers argued that completing projects already underway would help translate government spending into tangible benefits for residents, while stimulating commercial activities and creating employment opportunities.
With the approvals, the state government is expected to deploy the N100 billion facility towards infrastructure development and use the N300 billion arrangement to refinance its existing contractors’ finance obligation under more favourable interest terms.
