Governor Peter Mbah of Enugu State on Monday received the approval of the Enugu State House of Assembly to borrow the sum of N170 billion to execute capital projects and others in the state.
The Mbah-led administration had approached the State Legislature with the request for an approval to source for a N170 billion facility to fund capital projects, among others.
The Labour Party (LP) dominated Assembly whose members unanimously approved the request, noted that it would enable the government deliver on its mandate, especially in the provision of critical infrastructure needed to attract investments to the state, expressing delight that the loan would run its full course in the first tenure of the Governor.
A breakdown of the loan as contained in the request letter to Assembly, addressed to the Speaker, Hon. Uchenna Ugwu and signed by the Secretary to the State Government (SSG), Prof. Chidiebere Onyia, shows: N100 billion bank guarantee line; N10 billion term loan, N10 billion overdraft facility, and N50 billion credit facility.
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The letter said that request was “sequel to the approval of the Enugu State Executive Council of the offer of N100 billion bank guarantee line, N10 billion term loan and N10 billion over draft facility from Fidelity Bank and N50 billion credit facility from Globus Bank.
“The N100 billion bank facility will guarantee payment for contracts issued to approved contractors.
“The loan will be repaid via Irrevocable Standing Payment Order (ISPO) on consolidated Enugu State IGR accounts, which would be domiciled in Fidelity Bank and domiciliation of JAAC/FAAC/Infrastructure Support.
“The N10 billion term loan is on a tenure of 48 months, and a monthly repayment via ISPO on consolidated Enugu State IGR accounts, which will be domiciled in Fidelity Bank and domiciliation of JAAC/FAAC/Infrastructure Support. It will be used for infrastructural development.
“The N10 billion overdraft facility will be used for prompt payment of recurrent expenditures such as salaries and has a tenure of 12 months with monthly clean up and repayment via ISPO on consolidated Enugu State IGR accounts, which will be domiciled in Fidelity Bank and domiciliation of JAAC/FAAC/Infrastructure Support.
“The N50 billion credit facility is for the refinancing of the outstanding receivables from Enugu State Government and the repayment plan is 42 months equal and consecutive monthly repayment of principal and interest, which will be debited from Enugu State FAAC account with Globus Bank PLC.”
