Four months to end of tenure, Okowa’s N100 billion loan request gets Delta Assembly’s approval
The Delta State House of Assembly has approved Governor Ifeanyi Okowa’s request for an N100 billion credit facility.
The N100 billion loan approval which is coming barely 4 months to the tenure of the current administration, is part of the N150 billion earlier approved Consolidated Syndicated Loan.
The approval followed the adoption of a motion moved by the Majority Leader of the Assembly, Hon. Ferguson Onwo, and seconded by the member representing Ughelli North I constituency, Mr Charles Oniyere at the Assembly’s plenary in Asaba on Thursday.
The Governor had transmitted a letter for the N100 billion loan request to the lawmakers through the Speaker, Hon. Sheriff Oborevwori, who duly presented the same to the House.
Oborevwori, who is the state’s 2023 Governorship Candidate of the Peoples Democratic Party (PDP), noted that the assembly had on April 26, 2022 received and had subsequently approved the governor’s request of N150 billion consolidated syndicated loan from Zenith Bank.
Okowa said in the letter, “With the change of Lead Arranger from Zenith Bank to Premium Trust Bank Limited, alongside other participating banks willing to accede to the pricing terms and further documentations, Premium Trust Bank Limited has insisted that in line with the prudential guidelines and extant regulations, a House of Assembly’s resolution was required to enable the bank consummate the transaction.
”Consequent on this, the State Executive Council at its first meeting held on Monday, January 16, 2023 considered and approved for the state government to obtain N100 billion out of the earlier approved N150 billion consolidated syndicated loan led by Premium Trust Bank Limited in line with the reverse terms and conditions.”
Moreover, the governor explained that the loan would be used for the payment of contractors and funding of an assortment of crucial ongoing projects across the state.
Meanwhile, the House also granted another request by the governor for a N2 billion bank facility to fund additional investment of three per cent equity in UTM Offshore Limited Floating Liquefied Natural Gas (FLNG) Project.
The approval of the N2 billion request similarly followed the adoption of a motion moved by the Majority Leader of the Assembly, Hon Onwo and seconded by the Minority Leader, Hon Innocent Anidi.
Governor Okowa had also transmitted the letter to the House through the Speaker, Hon Oborevwori, seeking approval for the N2 billion credit.
Okowa wrote, “I wish to state that in order to further diversify the economic base of the state and take advantage of the increased demand for natural gas in Europe and other parts of the world due to the shortfall in the supply as a result of the Russian-Ukrainian war.
“UTM Offshore Limited, which in the first instance offered 5 (five) percent equity share to the Delta State under a term loan facility from Fidelity Bank, has offered additional 5 (five) percent equity to the state.
“In view of the bank’s commitment to partner with the state government on this investment with an offer of N20 billion loan facility. The State Executive Council at it’s first meeting held on Monday, Jan. 16 considered and approved for the state government to accept the offer by Fidelity Bank Plc.
“The terms and conditions for the loan include; interest rate of 21 percent per annum, management fees of one percent flat, three years tenure of payment, facility amount of N20 billion.
“Also, the facility to be secured by the issuance of an Irrevocable Standing Payment Order (ISPO) authorising the Accountant General of the Federation to deduct from the State FAAC allocation monthly.”