The Senate approved the $516.3 million loan request by President Bola Ahmed Tinubu on Wednesday.
The money will be used for the construction of the Sokoto-Badagry Superhighway (Section One, Phase 1A and B).
The approval was given after the Senate considered the report of its Committee on Local and Foreign Debts.
The committee, chaired by Senator Magatagarda Wamakko, recommended the approval of the loan.
The syndicated financing facility is being sought from Deutsche Bank, according to a letter of request Tinubu sent to the Senate last Thursday.
Tinubu wrote, “The proposed financing arrangement comprises a syndicated loan to be secured through Deutsche Bank AG, supported by a partial risk guarantee from the Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC), the insurance arm of the Islamic Development Bank.
“The Federal Government will provide counterpart funding in the sum of ₦265,542,689,569, covering land acquisition, compensation, and ancillary infrastructure.
“The loan has a tenure of nine years, including a grace period of up to three years, with an interest rate not exceeding the Chicago Mercantile Exchange (CME) SOFR plus 5.3 percent per annum.
“The Federal Executive Council has approved the financing arrangement and its terms.”
The President outlined the scope of the project and its expected benefits to the nation.
“The project is designed to open up Nigeria’s northwest–southwest economic corridor through the construction of an approximately 1,000-kilometre high-capacity carriageway, linking Sokoto, Kebbi, Niger, Kwara, Oyo, Ogun, and Lagos States, stretching from Illela to Badagry,” Tinubu explained.
“The project is expected to enhance north–south connectivity and road safety, improve network performance along the corridor, reduce logistics costs and travel time, and facilitate trade and strengthen food security.
“It will also promote national integration by linking production zones to markets and ports, and provide long-term intermodal flexibility through provision for future rail integration and utility corridors.”
Senators unanimously approved the loan request on Wednesday at the session presided over by the Senate President, Godswill Akpabio.
The Deputy President of the Senate, Senator Barau Jibrin, the Chief Whip, Senator Mohammed Monguno, and the Chairman of the Senate Committee on Banking, Insurance and Other Financial Institutions, Senator Adetokumbo Abiru, particularly commended Tinubu for his development agenda.
Credit: Nigerian Tribune