The Senate on Thursday approved a World Bank loan of $350 million for Ogun State for Development Policy Operation (DPO).
The facility is part of the 2016 – 2018 External Borrowing (Rolling) Plan of the Muhammadu Buhari-led administration.
The loan facility attracts an interest rate of 1.25 percent, moratorium of five years and a 25-year maturity tenor.
The approval followed Senate’s adoption of the report of its Committee on Local and Foreign Debts, chaired by Senator Shehu Sani.
Presenting the report of the committee at plenary, Sani said the Ogun State Government met the various conditions set by the World Bank to qualify for the loan.
According to him, the state has a low and acceptable debt sustainability level.
Sani further explained that the state will use the facility to finance some of its key programmes aimed at stimulating internally generated revenue and developing critical infrastructure that will attract private investors to the state.
The report said: “The Committee observed that the Ogun State Government has put in place institutional framework for transparent and accountable budgetary and financial process.
“The various projects to be funded from the facility will engender economic growth and also increase revenue generation capacity of the state by creating employment opportunities.
“That Ogun State Government has shown a high degree of prudence in implementing her annual budget”.
The lawmaker added that when fully implemented, the projects will boost the socio-economic development of the state.
Besides receiving briefs from federal and state government officials, the committee also relied on a number of documents to arrive at the decision.
Some of the documents included the Fiscal Responsibility Act, Debt Management Office Act, Debt Sustainability Analysis as well as the World Bank Implementation Completion and Results Report on Ogun State Development Policy Operations.
