The Oyo State House of Assembly has approved a ₦100 billion loan facility from United Bank for Africa (UBA) Plc to support critical infrastructure development 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 of the House, Rt. Hon. Adebo Ogundoyin, which was read during plenary on Wednesday.
In a related arrangement, the Assembly also approved a ₦300 billion refinancing facility to enable the state government to transfer its existing contractors’ finance facility from Access Bank to UBA at a lower interest rate.
The two facilities are intended to strengthen the state’s infrastructure financing capacity, reduce borrowing costs and improve the management of its contractors’ finance obligations.
Under the refinancing arrangement, the existing facility obtained through Access Bank carries an interest rate of 26 per cent. UBA is expected to take over the facility at a reduced interest rate of 22 per cent, representing a four-percentage-point reduction.
The proposed refinancing is expected to ease the state government’s financing burden and consolidate its contractors’ finance operations with a single financial institution, subject to the agreed terms and conditions.
The separate ₦100 billion loan facility will be used to provide additional funding for critical infrastructure projects and support the timely completion of ongoing development initiatives 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 repayment tenor of 48 months.
Its terms also include a management fee of 0.25 per cent per annum on the outstanding amount and an annual advisory fee of 0.5 per cent on the outstanding balance.
The arrangement provides for a three-month moratorium on the repayment of both principal and interest. Interest accruing during the moratorium period is to be repaid alongside the fourth, fifth and sixth loan repayments, respectively.
Contributing to the deliberations, the Deputy Speaker, Hon. Muhammad Abiodun Fadeyi, alongside Hon. Adebayo Babajide Gabriel, representing Ibadan North II; Hon. Olorunpoto Cephas Rahman, representing Oyo East/Oyo West; and Hon. Sunkanmi Babalola, underscored the importance of sustained infrastructure investment in driving economic growth and delivering lasting developmental benefits to residents.
The lawmakers cited major projects, including the LAUTECH Teaching Hospital in Oyo town, the Rashidi Ladoja Circular Road and the Ido-Eruwa Road, among other ongoing infrastructure initiatives, as examples of projects whose timely completion would improve connectivity, strengthen economic activities and enhance access to public services.
They maintained that completing ongoing projects would ensure that investments already made by the government translated into tangible benefits for residents. They also highlighted the potential of infrastructure development to create employment, stimulate commercial activities and improve the movement of people, goods and services across the state.
With the Assembly’s approval, the ₦100 billion facility is expected to provide additional resources for infrastructure development, while the ₦300 billion refinancing arrangement is designed to reduce the interest burden on the state’s existing contractors’ finance facility by transferring it from Access Bank to UBA at a lower rate.
The arrangements form part of the state government’s efforts to sustain infrastructure delivery while managing the cost and structure of its financing obligations.
