This followed the submission and consideration of the report of the Senate ad-hoc committee on Local and Foreign Debts headed by Senator Kabiru Gaya and seven others which considered the loan request.
The Senate had received executive communication from President Muhammadu Buhari on Tuesday, September 29, requesting for a special approval of Lagos State Development Policy Operation 111 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 government to enhance the capacity of beneficiary government to execute its key projects.
The Lagos State Development Policy Operation 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 of $200 million was approved by the National Assembly in the 2010 Borrowing Plan, while the projects were implemented in 2011.
The second tranche of $200 million was approved by the National Assembly in 2012-2014 Borrowing Plan, and the third tranche facility is already captured in the 2015-2017 Medium Term Expenditure Framework (MTEF).
The committee said Lagos State justified the borrowing and has acceptable debt sustainability level and therefore eligible to borrow.
It said the loan would be used to finance light rail project, education, roads and bridges, water and health sector development, among others.