By Divine Sam.

The Oyo State House of Assembly has approved a N100 billion loan facility from United Bank for Africa (UBA) Plc to support infrastructure development and speed up the completion of ongoing projects across the state’s 33 local government areas.

The lawmakers also approved a separate N300 billion refinancing arrangement to enable the state government to transfer an existing contractors’ finance facility from Access Bank to UBA at a lower interest rate.

The approvals followed a request by Governor Seyi Makinde in a letter addressed to the Speaker of the Assembly, Adebo Ogundoyin, which was read during Wednesday’s plenary.

During deliberations, the lawmakers explained that the N100 billion facility would provide additional funding for critical infrastructure projects, while the N300 billion refinancing deal was designed to reduce borrowing costs and consolidate the state’s contractors’ finance obligations with one financial institution.

“The financing arrangement would enable the State Government to reduce its borrowing costs, consolidate its contractors’ finance obligations with one financial institution and strengthen its capacity to deliver infrastructure projects.

“The N300 billion component is designed to facilitate the takeover by UBA of the existing contractors’ finance facility, which the state government had accessed through Access Bank at an interest rate of 26 per cent.”

Under the proposed arrangement, UBA will refinance the existing facility at an interest rate of 22 per cent, representing a four-percentage-point reduction compared with the previous rate.

The refinancing is expected to ease the state’s financial obligations, subject to the agreed terms and conditions.

The lawmakers also clarified that the separate N100 billion loan would be directed towards other critical infrastructure projects and help sustain the state government’s ongoing development programme.

“The separate N100 billion loan facility will be deployed to fund other critical infrastructure projects, with the objective of accelerating the completion of ongoing projects and sustaining the administration’s infrastructure development programme.”

The facility carries an interest rate of 22 per cent, subject to review in line with prevailing money market conditions, and a repayment period of 48 months.

Its terms also include a management fee of 0.25 per cent per annum on the outstanding amount and an advisory fee of 0.5 per cent annually on the outstanding balance.

The agreement further provides for a three-month moratorium on principal and interest repayments. Interest accumulated during the moratorium will be repaid alongside the fourth, fifth and sixth instalments, respectively.

Contributing to the debate, Deputy Speaker Abiodun Fadeyi, alongside Gabriel Adebayo, representing Ibadan North II; Olorunpoto Rahman of Oyo East/Oyo West; and Sunkanmi Babalola, stressed the importance of sustained investment in infrastructure to support the state’s development.

They cited major projects, including the Ladoke Akintola University Teaching Hospital in Oyo town, the Rashidi Ladoja Circular Road and the Ido-Eruwa Road, noting that their timely completion could improve connectivity, expand access to public services and stimulate economic activities.

The lawmakers maintained that completing projects already underway would ensure that public investments translate into tangible benefits for residents, while continued infrastructure development could create jobs and improve the movement of people and goods across the state.

With the Assembly’s approval, the N100 billion facility is expected to provide fresh funding for infrastructure projects, while the N300 billion refinancing deal is intended to lower the cost of the state’s existing contractors’ finance obligations.

The financial implications of the arrangement will depend on the final loan terms, interest-rate reviews and the government’s ability to meet its repayment obligations.