FG guarantees N40b World Bank loans for Lagos government

The Federal Executive Council on Wednesday approved two World Bank loans totalling N40 billion ($242.3 million) for the infrastructural development in Lagos State.
According to the Minister of Information, Labaran Maku, the first loan of $200 million from the International Development Association is in support of the second Lagos State Development Policy Operation, while the second loan of $42.3 million is additional financing for the Lagos-Epe secondary education project.
Briefing State House cqorrespondents, Maku said the approval given was sequel to a memo presented by the Minister of Finance and Coordinating Minister for the Economy, Dr. Ngozi Okonjo-Iweala.
He however said the Federal Government is only serving as a warrantor for the Lagos State Government in the negotiation of the loans with the World Bank.
The Minister explained further that the loan comprises of 0.5 per cent commitment charge, 0.75 per cent service charge and 1.25 per cent interest per annum on the loans.
The loans are to be repaid back in 25 years, with a provision for five years moratorium.
Maku said further: “The Coordinating Minister of the Economy/Minister of Finance brought a memo seeking Council’s approval to obtain additional credit facility from the International Development Association in support of the Second Lagos State Development Policy Operation.
“The objective of the project is to improve on public finance and in a sustainable manner and consolidate on the achievements recorded under the First Phase of the project.
“The project covers the construction of a 27km light rail, construction of schools and the construction of Adiyan Mini Water Works to provide 2million gallons of water per day.
“Council approved that the Ministry of Finance obtains additional credit facility in the sum of $200 million from the International Development Association in support of the second Lagos State development operation.
“Council also approved that the Coordinating Minister for the Economy should execute the financing agreement on behalf of the Federal Government and direct the Attorney General of the Federation and Minister of Justice to issue the legal opinion required to render the credit effective.”
Speaking on the second loan facility, Maku said: “After deliberations, council approved that the Ministry of Finance obtains an IDA credit in the sum of $42.3 million as additional financing for the Lagos-Epe secondary education project.
“Council approved that the CME should execute the financing agreement on behalf of the FG and direct the attorney-general to issue the legal opinion to render the credit effect.”
Another memo considered by Council was brought by the Minister of the Federal Capital Territory, Senator Bala Mohammed.
Mohammed said Council approved a N2 billion contract for operation, maintenance and training of staff for Wupa Basin Sewage Treatment Plant in the city.
He said: “The training component in the previous maintenance contracts had offered opportunity for 22 members of staff of FCT Abuja Environmental Protection Board, including engineers, scientists, technologists, technicians and others to acquire skills and experience in the operation and maintenance of sewage treatment plant.
“There was a budgetary provision in 2013 FCT Appropriation to fund the project.
“After deliberations, Council approved the award of contract for operation, maintenance and training staff for Wupa Basin Sewage Treatment Plant in favour of Messrs S.C.C. (Nigeria Limited) in the sum of N2,006,071,928.73, with a completion period of 20 months.”
On his part, the Minister of Transport, Idris Umar, said that Council approved N722.29 million and €2.05 million for consultancy services for Shore Protection and Rehabilitation of Escravos Breakwaters and Greenfield Port Development at Ogidingbe, Delta State.
Umar explained that the project is in line with government’s desire through the Nigeria Ports Authority to restore the structural stability of the Escravos Breakwaters constructed in the 1950s, develop a new port and build Central Processing Centres for the Fertiliser and Petrochemical Plants and infrastructural development to support the Gas-to-Energy Revolution in the Ogidingbe area.
On completion, he said the project will generate a total of 1,700 job opportunities for professionals and non-professionals during the planning and construction of the Escravos Port and related industrial development, breakwater and dredging operations, while 10,000 jobs will be created during the operations phase on an annual basis for professionals and non-professionals.
The Minister said that there is a budgetary provision of N50 million in the 2014 budget and a proposal for the balance of N803.5 million in the 2015 budget.
Umar spoke further: “Council approved the commission of consultancy services for the Shore Protection and Rehabilitation of Escravos Breakwaters and Greenfield Port Development at Ogidingbe, Delta State, for the NPA/Ministry of Transport in favour of Messrs Royal Haskoninb DHV in the sums of N722.29 million and N2.05 million inclusive of all taxes, the latter payable at the prevailing exchange rate at the time of payment with a completion period of eight months.”