The Senate has approved the Ogun state Development Policy Operation (DPO) loan of $350 million from the World Bank.
This is part of the 2016 to 2018 External Borrowing (Rolling) Plan of the Muhammadu Buhari-led administration.
The credit facility has an interest rate of 1.25 percent, moratorium of five years and a 25-year maturity tenor.
The approval of the loan facility followed Senate’s adoption of the report of the Committee on Local and Foreign Debts, chaired by Senator Shehu Sani (APC, Kaduna state).
Presenting the report of the committee, Senator Sani said the Ogun state government met the various conditions by the World Bank to qualify for the loan.
According to him, the state has a low and acceptable debt sustainability level.
He said the facility would be used to finance key programmes of the state to stimulate internally generated revenue, develop critical infrastructure that would attract private investors to the state.
“The Committee observed that: the Ogun state government has put in place institutions framework for transparent and accountable budgetary and financial process. The various projects to be funded from the facility will engender economic growth; also increase revenue generation capacity of the state and create employment opportunities.
“That Ogun state government has shown a high degree of prudence in implementing her annual budget,” the report read.
He said when fully implemented, the projects would boost the socio-economic development of the state.
Besides receiving briefs from federal and state government officials, the committee also relied on the following documents: 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 Operation.