The Federal Government, yesterday, guaranteed over $400 million foreign loans for four states, namely: Lagos, Rivers, Osun and Ogun, for execution of various development and infrastructure, including water and sanitation projects.

This is even as the government also approved a multi-donor credits totalling $1.280 billion for the establishment of the Development Bank of Nigeria.

Minister of State for Finance, Bashir Yuguda, disclosed this to State House correspondents at the Presidential Villa, Abuja, shortly after the Federal Executive Council (FEC) meeting, presided over by Vice President Namadi Sambo.

He was flanked by three other ministers, Osita Chidioka (Aviation); Ibrahim Shekarau (Education), and Mrs Sarah Ochekpe (Water Resources).

Yuguda dismissed as untrue the insinuating that the loans were politically motivated to appease the states which are all under the control of the opposition party, the All Progressives Congress (APC).

He explained that President Goodluck Jonathan is president of the country and father to all the citizens no matter where they reside and is concerned about the welfare of all.

He added that the president would not descend low to diminish his office with tribal or political sentiments, but is interested in bringing development to all parts of Nigeria no matter who resides there or which political party that controls the state.

According to him, the president had also not barred any minister from facilitating or assisting any state government in the processing of any development loans, adding that this informed why the memos for the approval of the credit facilities were brought to the council and approved.

He said the guaranteed loans are given to beneficiary states at very low or no interest rates at all.

For Lagos, he said, “FEC approves the president’s anticipatory approval to obtain $100 million credit from the French Development Agency in support of Lagos Integrated Urban Development Project (Eko-UP).

“The facility is meant to improve living conditions of the most vulnerable urban population of metropolitan Lagos, improve management and treatment of solid waste, strengthen the capacity of Lagos State and implement urban development projects in the state.

“The payment period for the loan is 20 years, including seven years moratorium, with a commitment fee of 0.25 per cent per annum and an appraisal fee of 0.25 per cent.

“The projects have three major components: slum upgrading in the two local council development authorities (LCDAs) of Ifelodun and Bariga by the Lagos State Urban Renewal Authority (LASURA); construction of solid waste management facilities in Lagos State by Lagos State Waste Management Authority (LAWMA) and providing capacity building and technical assistance for LASURA, LAWMA, Project Management Unit and the two LCDAs.”

For Rivers State, Yuguda said “FEC ratified president’s anticipatory approval of African Development Bank (AfDB) credit facility in the sum of $200 million for the proposed Port Harcourt water supply and sanitation project and an African Development Fund (ADF) credit of $5million to support Urban Water Sector Reform Project.

“The objective is to provide sustainable access to safe drinking water and sanitation to the residents of Port Harcourt; strengthen the Federal Government’s capacity to reform the urban water and sanitation sector and improve service delivery across the country.

“The project has five major components, including water supply and sanitation infrastructure in Port Harcourt, institutional support to Port Harcourt Water Corporation; hygiene, sanitation and environment in Port Harcourt, urban water reform at the Federal level and project management.

“The credit facility will be secured from AfDB with a repayment period of 15 years, five years moratorium; the interest is enhanced variable spread loan with lending spread of 0.60 per cent per annum which translates to 1.56 per cent.

“For the ADF, the principal shall be repaid over a period of 22 years, with eight years grace period; interest rate of one per cent per annum. The project is captured in the approved 2012-2014 External Borrowing Plan of Federal Government.”

He said further that the FEC approved to obtain $33.174million credit from the French Development Agency in support of the Ogun State water supply project.

“The objectives of the project are to increase the coverage, continuity and quality of service in the state capital, increase the financial viability of existing water utility through increase in revenue collection, providing financing to rehabilitate and build infrastructure needed to increase access to water supply services in the state capital and improve the governance of water sector in the state.

“The facility will be secured from the FDA on blend terms with an interest rate of six months Libor plus margin, a repayment period of 20 years, including seven years moratorium; commitment fee of 0.25 per cent per annum and an appraisal fee of 0.25 per cent.

“The credit would be on-lend to Ogun State on the same terms and conditions offered by the FDA to the Federal Government,” he explained.

He said the “council approved the anticipatory approval of an Islamic Development Bank Loan of $65 million for financing the water supply and sanitation project in Osun State.

“The loan is to be financed under the manufacturing financing (IStisna’a). The overall approval of the project is to, among other things, provide safe water, reduce water-borne diseases, improve agricultural output and tackle sanitation and environmental challenges.

“The terms and conditions of the loan as negotiated and agreed between the IDB. And the Nigerian officials comprising ministry of finance and Osun State Government in October 2014 and, consequently, approved by the IDB Board of Directors.”

In respect of the establishment of the Development Bank of Nigeria, Yuguda explained that approval was given for a multi-donor credit from the International Bank for Reconstruction and Development (World Bank), Africa Development Bank, German and French development agencies in $500 million, $450 million, $200 million and $130 million respectively.

He said, “This is for the establishment of the proposed Development Bank of Nigeria. The proposed bank is to give lending credit facilities to micro, small and medium enterprises in the country. World bank version of the loan, which is 500 million US dollars, has 21 years maturity period with 5years grace period and 4.25 percent interest rate.”