The Enugu State House of Assembly, during an emergency session on Monday, granted approval for a N170 billion loan requested by Governor Peter Mbah to fund significant projects in the state.
This substantial loan, set to be acquired from Fidelity Bank and Globus Bank, will be allocated to finance essential infrastructure projects, including the construction of roads, bridges, schools, and hospitals.
Speaker Uche Ugwu detailed the loan’s composition, comprising a N100 billion Bank Guarantee Line (BGL), N10 billion Term Loan (TL), N10 billion Overdraft Facility from Fidelity Bank, and N50 billion Credit Facility from Globus Bank.
Ugwu clarified that the Bank Guarantee Line would function as collateral for contracts awarded to contractors such as China Civil Engineering Construction Company (CCECC) and others responsible for state government projects.
Regarding the Term Loan, the Speaker disclosed an interest rate of 22% per annum, subject to periodic review in line with prevailing money market conditions, with a repayment period of 48 months.
The Overdraft Facility loan aims to ensure the prompt payment of worker salaries and address other recurrent expenses, featuring a repayment period of 12 months.
The speaker further noted that the State Executive Council approved the loans on October 6.
The Assembly, predominantly represented by the Labour Party, also expressed satisfaction that the loan would be fully utilized during the Governor’s initial term.