The request of the administration of Governor Peter Mbah of Enugu State for a N170 billion loan has been approved by the state House of Assembly.
The loan request, meant to fund capital projects, among others, according to the administration was unanimously approved the request on Monday.
The lawmakers, who are mainly members of the Labour Party, while stating the reason for the approval, said it would enable the government deliver on its mandate, especially in the provision of critical infrastructure needed to attract investments to the state.
A breakdown of the request is as follows: N100 billion bank guarantee line; N10 billion term loan, N10 billion overdraft facility, and N50 billion credit facility.
A letter signed by the Secretary to the State Government, Prof. Chidiebere Onyia, and addressed to the Speaker, Hon. Uchenna Ugwu, disclosed that the 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 overdraft 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.