Oyo Assembly approves N100bn loan for infrastructure projects

By Adejayan Gbenga

The Oyo State House of Assembly has approved a N100 billion loan facility from United Bank for Africa Plc to accelerate ongoing infrastructure projects and fund other critical development initiatives across the state.

The approval followed a request by Governor Seyi Makinde in a letter addressed to the Speaker, Adebo Ogundoyin, and read during plenary on Wednesday.

The N100 billion loan is separate from a proposed N300 billion refinancing arrangement aimed at transferring the state government’s existing contractors’ finance facility from Access Bank to UBA at a lower interest rate.

During deliberations, lawmakers said the refinancing arrangement would reduce borrowing costs, consolidate the state’s contractors’ finance obligations with one financial institution and improve its capacity to execute infrastructure projects.

The proposed N300 billion refinancing facility would replace an existing loan obtained from Access Bank at an interest rate of 26 per cent with a UBA facility at 22 per cent, representing a four-percentage-point reduction. The separate 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.

The terms of the N100 billion facility 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 arrangement also provides for a three-month moratorium on principal and interest repayments, with interest accrued during the period to be repaid alongside the fourth, fifth and sixth loan instalments, respectively.

Contributing to the debate, Deputy Speaker Muhammad Abiodun Fadeyi and lawmakers Adebayo Babajide Gabriel, Olorunpoto Cephas Rahman and Sunkanmi Babalola stressed the importance of sustained infrastructure investment in promoting economic growth and improving residents’ welfare. They cited projects such as the LAUTECH Teaching Hospital in Oyo town, the Rashidi Ladoja Circular Road and the Ido-Eruwa Road as initiatives whose completion could improve connectivity, expand access to public services and stimulate commercial activities.

The lawmakers argued that completing ongoing projects would help translate government spending into tangible benefits for residents, while creating jobs and improving the movement of people, goods and services across the state. With the approval, the N100 billion facility is expected to provide additional funding for critical infrastructure projects, while the proposed N300 billion refinancing arrangement is intended to lower the cost of servicing the state’s existing contractors’ finance obligations.