The Oyo State House of Assembly has approved a ₦100 billion loan facility from United Bank for Africa (UBA) to fund infrastructure projects and other development initiatives across the state’s 33 local government areas.
The lawmakers also approved a separate ₦300 billion facility to refinance an existing contractors’ finance facility obtained by the state government from Access Bank.
The approvals followed a request by Governor Seyi Makinde, contained in a letter addressed to the Speaker of the Assembly, Adebo Ogundoyin, and read during plenary on Wednesday.
During deliberations, the lawmakers said the refinancing arrangement would reduce borrowing costs by transferring the existing facility from Access Bank, which carries an interest rate of 26 per cent, to UBA at a proposed rate of 22 per cent.
The separate ₦100 billion loan will also attract an interest rate of 22 per cent, subject to review in line with prevailing money market conditions, and will be repaid over 48 months.
The facility includes a three-month moratorium on principal and interest repayments, while other charges include a management fee of 0.25 per cent per annum and an annual advisory fee of 0.5 per cent on the outstanding balance.
The lawmakers said the funds would support the completion of ongoing infrastructure projects and accelerate development across the state. Projects mentioned during the debate included the Rashidi Ladoja Circular Road, the Ido-Eruwa Road and the Ladoke Akintola University Teaching Hospital in Oyo town.
They added that completing ongoing projects would improve transportation, create employment opportunities, stimulate commercial activities and enhance access to public services.
With the approvals, the state government is expected to access additional funding for infrastructure development while refinancing its existing contractors’ finance obligations at a lower interest rate.
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