The Enugu State House of Assembly has approved the sum of one hundred- and seventy-billion-naira loans as requested by the state Governor, Dr. Peter Ndubuisi Mbah.
The request was conveyed to the Legislators in a letter signed by the Secretary to the State Governor Professor Chidiebere Onyia who seeking the approval of the offer of four facilities for infrastructure development and payment of salaries.
Reading the letter during plenary on Monday, the Speaker of the House, Uche Ugwu said, “The message from the Governor request for approval of offer of one hundred billion naira only Bank Guarantee Loan, BGL, 10 billion naira only Term loan, TL, 10 billion naira only Overdraft Facility and 50 billion naira only Credit facility.”
“The Honorable House of Assembly members may wish to know that the Executive Council members during their 6th EXCO meeting held on the 6th of October 2023 approved the acceptance of the offer of 100 billion naira only BGL, 10-billion-naira term loan, 10 billion naira only overdraft facility from Fidelity Bank PLC and 50billion naira only from Globus bank.”
The Speaker further stated the purpose of the loans; “The purpose is to guarantee payment for contracts issued to approved contractors- China Civil Engineering Construction Company (CCECC) and others for the execution of projects to be undertaken by the State Government.
Facility 1 which is 100-billion-naira BGL with 1% bank guarantee and advisory fees respectively at 0.5% management fee that will be available immediately subject to fulfillment of conditions precedent drawn down on availability of funds not later than 6 months from date of acceptance.
On repayment plans for the above facility, the letter reads, “The proposed source of repayment is via Irrevocable Standing Payment Order, ISPO, on consolidated
Enugu Internal Generated Revenue accounts to be domiciled with Fidelity Bank, domiciliation of JAC/FAC/ Infrastructure support.”
While the interest rate on facility 2 and 3 of 10 billion naira each on Term loan and Overdraft respectively is 22% per annum subject to review from time to time, facility 4 of 50 billion naira only interest rate is 20%.
The purpose of Facility 3 is to ensure prompt payment of recurrent expenditures like salaries; “this facility has a tenure of 12 months with monthly clean ups and repayment is via ISPO on consolidated Enugu state IGR account to be domiciled with Fidelity bank.”
During the debate on the request, members who contributed were supportive of the load and approved the same immediately.
The Minority leader of the House, Mr. Iloabuchi Aniagu commended the state governor for forwarding the loan request, which he said was timely.
According to Aniagu, the loans would enable the state government to undertake a developmental agenda for the good people of the state.
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