Enugu Assembly approves loan to the state government for N170 billion

The Governor Peter Mbah administration’s request for the Enugu State House of Assembly to source for a N170 billion facility to fund capital projects, among other things, has been granted.

On Monday, the MPs unanimously supported the request, stating that it would allow the government to fulfil its obligations, particularly in terms of providing the essential infrastructure required to draw investors to the state.

The Assembly, which is dominated by the Labour Party, expressed its happiness that the loan would be repaid in full during the Governor’s first term.

The request is broken out as follows: Bank guarantee line of N100 billion; term loan of N10 billion; overdraft facility of N10 billion; and credit facility of N50 billion.

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A letter addressed to the Speaker, Hon. Uchenna Ugwu, and signed by the Secretary to the State Government, Prof. Chidiebere Onyia, revealed that the request came after the Enugu State Executive Council approved the offer of a N100 billion bank guarantee line, a N10 billion term loan, a N10 billion overdraft facility, and a N50 billion credit facility from Globus Bank.

Payment for contracts given to authorised contractors would be guaranteed by the N100 billion bank facility.

The loan would be repaid by an irrevocable standing payment order (ISPO) on combined Enugu State IGR accounts, which will be based in Fidelity Bank and also serve as the domicile for JAAC, FAAC, and Infrastructure Support.

The N10 billion term loan has a 48-month term and requires monthly payback by ISPO on combined Enugu State IGR accounts. Both JAAC, FAAC, and Infrastructure Support will have their domiciles in Fidelity Bank. It will be put to use developing infrastructure.

The N10 billion overdraft facility has a 12-month term with monthly clean up and repayment via ISPO on combined Enugu State IGR accounts, which will be domiciled in Fidelity Bank and domicile of JAAC/FAAC/Infrastructure Support. It will be used for prompt payment of recurring expenses like salaries.

The outstanding debt owed by the Enugu State Government will be refinanced with the help of a N50 billion credit facility. The repayment schedule calls for equal and regular principal and interest payments over the course of 42 months, which will be deducted from the Enugu State FAAC account with Globus Bank PLC.