TheCable

The Lagos State Government received approval from the Federal Executive Council on Wednesday for two separate loans totalling $242.2m (about N40bn) from the International Development Association (IDA).

The minister of information, Mr. Labaran Maku, who disclosed this to state house correspondents at the end of the FEC meeting presided over by President Goodluck Jonathan, said $200m loan was approved to support infrastructure in the state while an additional loan of $42.2m would be in support of secondary education.

He added that the loans are the second phase of a $600m facility approved for the state by the IDA in 2010, having received $200m under the first phase in 2011.

“The minister of finance brought a memorandum seeking approval to obtain additional credit facility from the International Development Association in support of the Second Lagos State Development Policy Operation,” Maku said.

“The objective of the project is to improve on public finance in a sustainable manner and consolidate on the achievements recorded under the first phase of the project. It covers the construction of a 27km light rail, construction of schools and the construction of Adiyan mini waterworks to provide two million gallons of water per day.”

The loans are to attract 0.5 per cent commitment charge, 0.75 per cent service charge, and 1.25 per cent interest per annum. It is expected to be repaid back in 25 years, with a moratorium of five years.