The Abia State government under Alex Otti has secured a loan facility from the Islamic Development Bank (IsDB) to the tune of $125 million to facilitate the Abia State Integrated Infrastructure Development Project.
In the 354th meeting of the Board of Directors chaired by H.E. Dr Muhammad Al Jasser, President and Group Chairman of IsDB, the Bank gave approval for the $125 million facility to be disbursed to the Abia State government.
The Islamic Development Bank in a statement said that the $125 million allocation for Abia is meant for projects that will significantly reduce travel times and costs on major roadways, concurrently enhancing market accessibility and social services for the local populace.
The statement read:
“Nigeria secured a US$125 million financing package to contribute to the Abia State Integrated Infrastructure Development Project. The project aims to reduce travel times and costs along key roads, while also improving access to markets and social services for local communities.
“Additionally, the project will enhance overall mobility by ensuring safe and accessible transportation for all residents, including vulnerable groups.”
Apart from the $125 million loan from the Islamic Bank, the Abia State government had earlier secured approval for a loan facility from the African Development Bank. On June 30, 2023, the African Development Bank Group’s Board of Directors approved a loan of $115 million to Abia State. This financial injection is said to be earmarked for a comprehensive road rehabilitation projects within the state, especially in the capital city, Umuahia, and the commercial centre of Aba.
The total external loan package so far secured by the Alex Otti administration is $240 million, which includes $100 million loan from the African Development Bank, supplemented by a $15 million contribution from the Canada–African Development Bank Climate Fund (CACF) and the just approved loan of $125 million from the Islamic Development Bank.
The Abia State government is however set to contribute $23.80 million in counterpart funding, aimed primarily at compensation and the execution of a Resettlement Action Plan for those impacted by the project’s implementation. It is unclear if the counterpart funding of $23.8 million (N38.1 billion) from the Abia State government will also come from borrowing or its revenue.
The projects covered by the loans according to the state include the rehabilitation of 248.46 km of roadways (58.03 km in Umuahia and 190.43 km in Aba) upgrading them to asphaltic concrete standards. Details of the specific roads for rehabilitation are however not known. The projects also includes restoring erosion-prone areas and initiating studies to engage the private sector in solid waste management for Umuahia and Aba.
Beyond the infrastructural upgrades, the statement government also added that the project is designed to “bolster community welfare through capacity building, project management, and enhancing social infrastructure.”
Recall that governor Alex Otti in his 2024 budget sought to borrow N400 billion to fund the budget. The $240 million loan from the Islamic Bank and the AfDB totals N384 billion in Naira equivalent.