TheCable

The Federal Executive Council (FEC) on Wednesday approved $200 million World Bank loan for Lagos state.

Lai Mohammed, minister of information, and Babatunde Fashola, his power, works and housing counterpart, disclosed at a press briefing at the end of the FEC meeting.

They explained that the facility was part of a $600 million loan granted by World Bank for roads and other infrastructural development projects in the state, alleging that though the first batch of $200 million was approved in 2010, the previous administration delayed subsequent batches for political reasons.

“After the first tranche was disbursed, there was a freeze on the second tranche. The initial agreements we had with the World Bank was a 40-year loan, a 10-year moratorium and 0.5 percent interest,” Fashola said.

“But because of the delays that subsequently characterised the partisan interference that took place, our profile as a nation also changed we have become a bigger economy. Though money was being lent to us, we are no longer taking it as a highly indebted nation.

“So by the time this one was approved, because of the delays, we had lost the opportunity of 40 years as it is now a loan of 25 years, the moratorium has reduced to five years instead of 10 years.

“The interest rate had gone up to 2.5 percent, but what is still heart-warming about it is that it helps to finance infrastructure.”

On his part, Mohammed said the approval of the loan was the “major item” at the meeting.

“The major item which will be of interest was the council’s approval of the memo put forward by the minister of finance to obtain additional $200 million loan from International Development Association (IDA), which is a window of the World Bank in support of the Lagos state development policy operation.”