Federal Executive Council okays $242.2m IDA loans for Lagos State.

Minister of the Federal Capital Territory, Senator Bala Muhammed

The Federal Executive Council on Wednesday approved a sovereign warranty for two separate loans totaling $242.2m  (about N40bn) from the International Development Association for Lagos State.

The Minister of Information, Mr. Labaran Maku; Minister of the Federal Capital Territory, Senator Bala Muhammed, and Minister of Transport, Senator Idris Umar, briefed State House correspondents at the end of the meeting presided over by President Goodluck Jonathan.

Maku said while a loan of $200m was approved to support infrastructure in the state, additional loan of $42.2m would be in support of secondary education in the state. He said the loans were the second phase of a $600m facility approved for the state by the IDA in 2010. The state had benefited to the tune of $200m under the first phase in 2011.

The minister said, “The Coordinating Minister of the Economy/Minister of Finance brought a memorandum seeking approval to obtain additional credit facility from the International Development Association in support of the Second Lagos State Development Policy Operation.

“The objective of the project is to improve on Public Finance and Sustainable manner and consolidate on the achievements recorded under the First Phase of the project.

“The project covers the construction of a 27km light rail, construction of schools and the construction of Adiyan Mini Water Works to provide two million gallons of water per day.

“Council approved that the ministry obtain additional credit facility in the sum of $200 million from the IDA in support of the development operation.

“Council also approved that the minister should execute the financing agreement on behalf of the Federal Government; and directed the Attorney-General of the Federation and Minister of Justice to issue the legal opinion required to render the credit effective.”

Maku added that the council also approved that the ministry obtained an IDA credit in the sum of $42.3m as additional financing for the Lagos-Epe Secondary Education Project. He said the loans would attract 0.5 per cent commitment charge, 0.75 per cent service charge and 1.25 per cent interest per annum.

The minister added that the loan, which is expected to be paid back in 25 years, had a moratorium of five years.

Muhammed said the council also approved the award of contract for the operation, maintenance and staff training for Wupa Basin Sewage Treatment Plant in Abuja.

The contract, according to the minister, is awarded to Messrs S.C.C (Nigeria Limited) in the sum of N2.6bn with a completion period of 20 months.

(Source-Punch)