The Oyo State House of Assembly has approved Governor Seyi Makinde’s fresh loan facility to the tune of N100bn to accelerate infrastructure development and ensure the timely completion of ongoing projects across Oyo State.
The N100 billion loan facility will be obtained from the United Bank for Africa (UBA) Plc following a request conveyed in a letter by the governor and addressed to the Speaker of the House, Hon. Adebo Ogundoyin, and read during plenary on Wednesday.
The facility is expected to provide additional funding for critical infrastructure projects and other developmental initiatives across the state.
Alongside the N100 billion loan, the state government also plans to refinance an existing N300 billion contractors’ finance facility obtained through Access Bank, transferring the obligation to UBA under a proposed lower interest rate.
During deliberations, lawmakers explained that the refinancing arrangement would help reduce borrowing costs, consolidate contractors’ finance obligations with one financial institution and improve the government’s capacity to complete major infrastructure projects.
The existing N300 billion contractors’ finance facility was obtained through Access Bank at an interest rate of 26 per cent.
Under the proposed arrangement, UBA will refinance the facility at an interest rate of 22 per cent, representing a four-percentage-point reduction.
The refinancing is expected to ease the state’s financing burden and streamline the management of its contractors’ finance obligations, subject to the agreed terms and conditions.
Terms of the N100bn UBA Loan
The separate N100 billion loan facility approved by the Oyo Assembly will be used to finance critical infrastructure projects and support the state government’s ongoing development programme.
The facility comes with the following terms: Loan amount: N100 billion, Lender: United Bank for Africa (UBA) Plc., Interest rate: 22 per cent, subject to review in line with prevailing money market conditions, Tenor: 48 months and Management fee: 0.25 per cent per annum on the outstanding amount.
Others include Advisory fee: 0.5 per cent annually on the outstanding balance and Moratorium: Three months on principal and interest repayments.
Under the repayment arrangement, interest accruing during the three-month moratorium will be repaid alongside the fourth, fifth and sixth loan repayments, respectively.
These terms will determine the overall cost of the facility and the repayment obligations of the state government over the loan period.
House of Assembly Highlight Benefits of Infrastructure Investment
Contributing to the debate, Deputy Speaker, Hon. Muhammad Abiodun Fadeyi, alongside Hon. Adebayo Babajide Gabriel of Ibadan North II, Hon. Olorunpoto Cephas Rahman of Oyo East/Oyo West and Hon. Sunkanmi Babalola, emphasised the importance of sustained infrastructure investment in promoting economic growth and development.
The lawmakers cited several ongoing projects, including the LAUTECH Teaching Hospital in Oyo town, the Rashidi Ladoja Circular Road and the Ido-Eruwa Road.
They noted that the timely completion of these projects would improve transportation, strengthen connectivity between communities and expand access to essential public services.
According to the lawmakers, completing ongoing projects would also ensure that previous government investments deliver tangible benefits to residents.
They further highlighted the potential of infrastructure development to create jobs, stimulate commercial activities and improve the movement of people, goods and services across Oyo State.
Oyo Assembly N100bn Loan Expected to Accelerate Project Delivery
With the of the House of Assembly’s approval, the N100 billion loan is expected to provide additional resources for critical infrastructure projects and support the Makinde administration’s development priorities.
The separate N300 billion refinancing arrangement is designed to transfer the state’s existing contractors’ finance facility from Access Bank to UBA at a lower interest rate, potentially reducing financing costs.
Together, the two facilities are intended to support ongoing infrastructure delivery while restructuring the state’s existing contractors’ finance obligations.
The impact of the arrangements will depend on the implementation of the projects, the final financing terms and the government’s ability to meet its repayment obligations.
Residents will be watching to see how the approved funding translates into completed projects, improved public services and broader economic benefits across Oyo State.
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