Federal Government, today, approved series of foreign loans worth a total of about $400 Million (about N800 Billion) to finance various projects in Lagos, Ogun, Osun and Rivers states.
The approvals for the loans were given today by the Federal Executive Council (FEC) made up mainly ministers, Secretary to the Government of the Federation (SGF), Head of the nation’s Civil Service and others. The FEC meeting today was presided over by Vice President Mohammed Namadi Sambo.
Briefing newsmen shortly after the FEC meeting, the minister of state for finance, Ambassador Bashir Yuguda said that FEC approved the President’s anticipatory approval to obtain $100 million credit from the French Development Agency in support of Lagos Integrated Urban Development Project (Eko-UP).
The minister, who addressed newsmen along with minister of Aviation, Osite Chidoka, minister of Water Resources, Sarah Ochekpe and minister of Education, Ibrahim Shakarau said that payment period for the $100 million loan is 20 years, including 7 years moratorium, commitment fee of 0.25 per cent per annum and an appraisal fee of 0.25 per cent.
He said that the objectives of the project are to improve the living conditions of the most vulnerable urban population of metropolitan Lagos; improve the management and treatment of solid waste, strengthen the capacity of Lagos State and implement urban developments.
The projects, he said, has three major components which include slum upgrading in the two local council development authorities (LCDAS) of Ifelodun and Bariga by the Lagos State Urban Renewal Authority (LASURA); construction of solid waste management facilities in Lagos State by Lagos State Waste Management Authority (LAWMA) and providing capacity building and technical assistance for LASURA, LAWMA, Project Management Unit and the two LCDAs.
Yuguda said that th second loan from the
African Development Bank (AfDB) of $200 million is for the proposed Port Harcourt water supply and sanitation project and an African Development Fund ( ADF) credit of $5million to support Urban Water Sector Reform Project.
The objective of the project, he explained, is to provide sustainable access to safe driving water and sanitation to the residents of Port Harcourt; Strengthen the Federal Government’s capacity to reform the Urban Water and Sanitation Sector and improve service delivery across the country
“The project has five major components including water supply and sanitation infrastructure in Port Harcourt, Institutional support to Port Harcourt water corporation, hygiene, sanitation and environment in Port Harcourt, Urban Water Reform at the Federal Level and project management.
“The credit facility will be secured from ADB with a repayment period of 15 years, 5 years moratorium, the interest is enhanced variable spread loan with lending spread of 0.60 per cent per annum which translate to 1.56 per cent
“For the ADF, the Principal shall be repaid over a period of 22 years, with 8 years grace period, interest rate of1 per cent per annum
“The project is captured in the approved 2012-2014 External Borrowing Plan of Federal Government
The finance minister listed other loans as detailed below:
An approval for a multi-Donor credits from the international bank for reconstruction and development of world bank, Africa development bank, Germany and French development agency in the sums of 500 million US dollars ,450 million US dollars, 200 million US dollars and 130 million US dollars . This is for the establishment of the proposed development bank of Nigeria . The proposed bank is to give lending credit facilities to micro, small and medium enterprises in the country.
World bank version of the loan which is 500 million US dollars has a 21 years maturity period with five years grace period and on 4.25% interest rate.
The ADF version attracts 1% interest rate and 30 yrs maturity period.
Ratification of the presidents anticipatory approval to obtain USD70 million credit facility from the international development Association for the proposed Africa Higher education Center of Excellence project.
The proposed project is meant to build on the efforts made under the previous world Bank Assisted science and technology education in post-Basic projects. One of the components under that project was the centers of excellence,with tremendously improved research and exchange programmes within the Nigerian university system. The proposed ACE project is therefore designed to enhance the effective use of exchange programmes and applied research within the African regional universities and in partnership with international academic institutions,relevant employers and industries.
The main project development objective is to support the recipient countries to promote regional specialization among participating universities in areas that address regional challenges and strengthen the capacities of these universities to deliver quality training and applied research.The credit is concessional with a service charge of 0.75 percent, commitment charge of 0.5 percent and 1.2 percent interest rate per annum with repayment period of 25 years and a five year moratorium.
Approval to obtain $33.174million credit from the French Development Agency in support of the Ogun State Water supply project.
The objectives of the project are to increase the coverage, continuity and quality of service in the state capital, increase the financial viability of existing water utility through increase in revenue collection, providing financing to rehabilitate and build infrastructure needed to increase access to water supply services in the state capital and improve the governance of water sector in the state.
The facility will be secured from the FDA on blend terms with an interest rate of six months libor plus margin, a repayment period of 20 years, including seven years moratorium, commitment fee of 0.25 per cent per annum and an appraisal fee of 0.25 per cent.
The credit would be on-lend to Ogun State on the same terms and conditions offered by the FDA to the Federal Government.
Council approved the anticipatory approval of an Islamic Development Bank Loan of $65 Million for financing the water supply and sanitation project in Osun state.
The loan is to be financed under the manufacturing financing. The overall approval of the project is to amongst other things provide safe water, reduce waterborne diseases, improve agricultural output and tackle sanitation and environmental challenges.
The terms and conditions of the loan as negotiated and agreed between the ID. And the Nigerian officials comprising ministry of finance and Osun State Government in October 2014 and consequently approved by the IDB Board of Directors as follow:
manufacturing financing (IStisna’a):
Amount $65 million, repayment period 15 years, gestation period 4 years and markup Libor + 155bps which currently translates to 1.5% per annum. The Project was approved in the 2012-2014 external borrowing plan of the federal government.
Council also approved the President’s anticipatory approval to obtain additional financing of $140million credit from the international Development Association in support of the community and social development project being implemented in the 36 states of the federation and the FCT.
The Federal Government had in 2009 requested for an initial credit facility of $200million for the community and social development project (CSDP) from the world bank. As at October 2013 98% of the loan amount was disbursed, however the closing date was extended from December 2013 to December 2014 to allow for utilization of the loan.
The overall project development objective of the proposed additional credit is to increase access to improved social and natural resource infrastructure services in a sustainable manner throughout the country.
The project which will be implemented over a three year period has four components namely: Federal Level coordination and program support, LGA / Sectoral Ministries’ Capacity and a Partnership Building, Community- Driven investment and target on vulnerable group of households and individual in the poor communities .
Ratification of the President’s anticipatory approval to obtain $70 million credit facility, associated grants of $15million and $0.48 million in support of the climate change adaptation and agribusiness support programme from International Fund for Agricultural Development
The objective of the programme is to increase incomes, enhanced food security and reduce poverty and vulnerability for small holder farmers, particularly women and youth, as well as create jobs and accelerate economic growth on a sustainable basis.
The project has four major coo nets namely: Productivity Enhancement and Climate Resilience, Enterprise Development for Women and Youth, Institutional Debelopment, Programme Coordinating and Management.