Oyo State House of Assembly has approved a N100 billion loan facility from United Bank for Africa (UBA) Plc to fund critical infrastructure projects and accelerate the completion of ongoing projects 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 Assembly also approved a separate N300 billion facility to refinance the state government’s existing contractors’ finance loan obtained from Access Bank.
During deliberations, lawmakers said the refinancing arrangement would reduce the government’s borrowing costs, as UBA would take over the existing facility at an interest rate of 22 per cent, down from the 26 per cent charged by Access Bank.
The proposed refinancing represents a four-percentage-point reduction in the interest rate and is expected to consolidate the state’s contractors’ finance obligations with one financial institution.
The separate N100 billion loan will be used to fund critical infrastructure projects and support the timely completion of ongoing developments across Oyo State.
The facility carries an interest rate of 22 per cent, subject to review in line with prevailing money market conditions, and a tenor of 48 months.
Its terms also include a management fee of 0.25 per cent per annum on the outstanding amount and an advisory fee of 0.5 per cent annually on the outstanding balance.
The loan arrangement provides for a three-month moratorium on the repayment of both principal and interest. Interest accruing during the moratorium will be repaid alongside the fourth, fifth and sixth loan repayments, 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 driving development across the state.
They cited projects such as the LAUTECH Teaching Hospital in Oyo town, the Rashidi Ladoja Circular Road and the Ido-Eruwa Road, noting that their timely completion would improve connectivity, expand access to public services and support economic growth.
The lawmakers added that completing ongoing projects would ensure that investments already made translated into tangible benefits for residents, while infrastructure development could create jobs, stimulate commercial activities and improve the movement of people and goods.
With the approval, the N100 billion facility is expected to provide additional funding for infrastructure development, while the N300 billion arrangement will enable the state government to refinance its existing contractors’ finance facility with UBA at a lower interest rate.
