The approval was made known to reporters after the FEC meeting by the Minister of Information, Mr Lai Mohammed and his Power, Works and Housing counterpart, Mr Babatunde Fashola.
According to them, the loan is part of a $600 million loan granted by World Bank for roads and other infrastructural development projects in Lagos State.
Mr Fashola said the first batch of $200 million was approved in 2010, but that subsequent batches were reportedly delayed by the last administration for political reasons.
“It suffered delays as a result of partisan political differences in the last dispensation.
“After the first tranche was disbursed there was freeze on the second tranche,” he explained.
The former Lagos State Governor, who initiated the loan, noted that the $200 million loan was a segment of a total sum of $600 million loan for developmental initiatives in Lagos which was approved in 2010.
Mr Fashola told reporters that the new approval would allow Lagos State complete its very ambitious infrastructure projects.
“The initial agreement we had with the World Bank was a 40-year loan, a 10-year moratorium with 0.5% interest. But because of the delays that characterised the partisan interference that took place our profile as a nation also changed.
“We had become a bigger economy and money was being lent to us not as a highly indebted nation any more. By the time this one was approved now, because of the delays, we had lost the opportunity of 40 years and it is now a loan of 25 years. The moratorium has reduced to five years instead of 10 years,” Mr Fashola explained.
He also stated that the interest rate had gone up to 1.25% and emphasised that the administration’s decision on the loan would enable the Lagos State government finish the projects it had started.
The Minister further pointed out that the value chain that would benefit from such infrastructural development was huge and that such projects had remained the defining line between poor nations and rich nations.