Oyo Assembly Approves Makinde’s ₦200 Billion Infrastructure Bond Request to Refinance Loans, Cut Interest Costs
The Oyo State House of Assembly has approved Governor Seyi Makinde’s request to raise a ₦200 billion Infrastructure Bond to refinance existing short-term loans used to fund critical infrastructure projects across the state.
The approval followed the consideration of a formal request transmitted to the House by the governor and read during plenary by the Speaker, Rt. Hon. Adebo Ogundoyin.
In the request, Makinde sought the Assembly’s concurrence to enable the state government access the capital market as part of efforts to restructure its debt profile, reduce borrowing costs and sustain ongoing developmental projects.
According to the governor, the proposed bond will be used to refinance short-term facilities previously obtained to finance strategic infrastructure projects across Oyo State.
An Executive Council extract accompanying the request explained that the existing obligations, which include commercial bank loans, contractor-financing arrangements, overdraft facilities, Treasury Single Account advances and Federal Government intervention facilities, currently exert significant pressure on the state’s finances due to high interest rates and refinancing risks.
The document stated that converting the short-term liabilities into a long-term bond instrument would fundamentally restructure the state’s debt portfolio, lower annual debt servicing costs and create additional fiscal space for capital projects and social programmes.
It further revealed that the current facilities attract weighted average interest rates of between 22 and 26 per cent annually, while the proposed bond is expected to attract a fixed interest rate of between 17 and 19 per cent, with a one-time issuance fee not exceeding 2.35 per cent.
The state government projected that the refinancing arrangement would generate annual interest savings of between ₦10 billion and ₦14 billion, which could be redirected to infrastructure development, education, healthcare and other priority sectors.
During deliberations, lawmakers unanimously endorsed the proposal, describing it as a prudent financial strategy aimed at strengthening the state’s fiscal position while ensuring the continuity of key development projects.
The Majority Leader, Hon. Sanjo Adedoyin, and the Chief Whip, Hon. Gbenga Oyekola, who contributed to the debate, said the refinancing plan would reduce financial pressure on the state and support ongoing investments in critical sectors.
Projects financed through the existing facilities include the Senator Rashidi Ladoja Circular Road, the Ogbomoso-Iseyin Road, the upgrade of the Samuel Ladoke Akintola International Airport, the Light-Up Oyo Project, education infrastructure interventions, the remodelling of the Government House and the reconstruction of the Ojoo-Akinyele Interchange corridor.
Source: westernmirror.com.ng