The $200 million World Bank loan applied for by the Lagos State has been approved by the Senate yesterday.
The approval came after careful considerations by the Ad Hoc Committee on Local and Foreign Debts, chaired by Senator Kabiru Gaya and other seven Senators.
Recall that President Muhammadu Buhari earlier written to the Senate on Sepetember 29 making special request for the approval of the loan. The fund was meant for Lagos State Developement Policy Operation III under the Federal Government External Borrowing Plan (2015-2017) for the third tranche of $200 million of the DPO from the World Bank.
The World Bank Development Policy Operation (DPO) is a budget support facility used basically to finance deficit in annual budgets of governments to enhance the capacity of beneficiary government to execute key projects.
The Lagos State DPO (budget support) for $600 million was approved by the World Bank in 2010 to be disbursed in three tranches of $200 million each.
The committee said the first tranche was approved by the National Assembly in the 2010 Borrowing Plan while the projects were implemented in 2011.
The second tranche was approved by the National Assembly in 2012-2014 Borrowing Plan while the third tranche facility is captured in the 2015-2017 Medium Term Expenditure Framework (MTEF).
The committee said the state justified the borrowing and has acceptable debt sustainability level and was eligible to borrow.
It said the loan would be used to finance the light rail project, education, roads and bridges, water and health sector development, among others.
It said the projects to be funded from the facility would enhance great economic growth, employment generation and increased the revenue generation capacity of the state.
The committee added that the credit facility would enhance gains made in key sectors from the first and second tranches, particularly in the Ultra-Modern Burns Centre, Cardiac and Renal Centre at Gbagada General Hospital.
The 27km light rail on the Badagry Expressway corridor to Marina is included as part of projects to be funded from the loan and completion of the 70 million gallon per day Adiyan water facility.