The Enugu State House of Assembly has approved a N170 billion loan requested by Governor Peter Mbah to execute major projects in the state.
POLITICS NIGERIA reports that the loan, approved at an emergency plenary on Monday, will be used to finance infrastructural projects, including roads, bridges, schools, and hospitals.
The Speaker of the Assembly, Chief Uche Ugwu, said the loan will be sourced from Fidelity Bank and Globus Bank.
Ugwu gave a breakdown of the loan to include N100 billion Bank Guarantee Line (BGL), N10 billion Term Loan (TL), N10 billion Over Draft Facility from Fidelity Bank and N50 billion Credit Facility from the Globus Bank.
He explained that the BGL will serve as a guarantee payment for contracts issued to the contractors, China Civil Engineering Construction Company (CCECC) and others for the execution of projects to be undertaken by the state government.
On the Term Loan, the Speaker revealed that the loan had an interest rate of 22 per cent per annum, which is subject to review in line with money market realities, adding that the repayment tenure is 48 months.
Ugwu pointed out that the Over Draft Facility loan will ensure prompt payment of workers’ salaries as well as sorting out other recurrent expenditures and has a repayment tenure of 12 months.
The speaker said the State Executive Council approved the loans on October 6.