NIGERIA yesterday secured about N7.2 billion ($60 million) new World Bank loan for the construction and maintenance of rural roads and river crossings in Kaduna State.

The bank also welcomed the country's plan to review its Policy Support Instrument (PSI) document, the National Economic Empowerment and Development

Strategies (NEEDS), which second phase, initially billed for implementation early this year, has been suspended by the President Umaru Musa Yar'Adua's economic team, according to Minister of State for Finance, Mr. Remi Babalola.

The bank, however, said it was watching with keen interest the review components, hoping that it would be in the larger interest of Nigerians.

The new World Bank Country Director in Nigeria, Mr. Onno Ruhl, who disclosed this after signing the new loan deal in Abuja, added that the bank would continue to work with Nigeria to assist the country on its economic policies.

Ruhl said: " My understanding is that the PSI expired after the first three years and the Nigerian Government and the IMF are working on a new PSI. For we at the World Bank, we will continue to work with the Nigerian Government in the provision of roads, water and other social infrastructure for the upliftment of the welfare of her citizenry while we await the new PSI.''

The loan deal sealed yesterday is for a period of eight years and intended for the upgrade, rehabilitation, and maintenance of about 500 kilometres of rural roads selected from prioritised intervention areas and about 130 river crossings in Kaduna State.

The credit line is the first phase under the World Bank's $2 billion roads portfolio in the country aimed at addressing the rehabilitation, and maintenance needs of 1,198 equivalent p2-lane kilometres of selected roads.

Ruhl promised that the bank would increase its activities in other states of the federation if the Kaduna pilot scheme succeeds.

Babalola, who signed on behalf of Nigeria, explained that the new credit was in line with the new Federal Government's approved borrowing policy.

He said the credit was under the World Bank's concessionary window of the International Development Association (IDA)

Babalola said: " The IDA credit is a highly concessional facility with a repayment period of 40 years, including 10-year moratorium. The facility will attract zero per cent interest rate. A commitment charge of not more than 0.50 per cent per annum is however payable on the undisbursed amount while a service charge of 0.75 per cent per annum is also payable on the amount drawn down.

"We are pleased that the Kaduna Rural Access and Mobility Project represent genuine efforts in this direction. The project would be implemented over the next eight years and together with the world Bank, appropriate implementation structures will be put in place to ensure effective project management.''

Ruhl added: " The Federal Roads Development Project development objective is the first Federal-level transport project in Nigeria in many years. It is the single largest operation in the portfolio. The project is based on the use of the innovative performance-based contracting, an approach that is quite new on the continent and has shown very good results elsewhere.

" The $60 million Rural Access and Mobility Project has been designed around the rural transport policy of government. Its development objective is to improve road access for rural communities in Kaduna State and assist the state to manage its road assets in a sustainable manner."

Babalola continued: "I am sure the project will become a model for sustainable development of infrastructure in our country. The agreement we are signing today is a clear testimony that stakeholders can work together in partnership to move the economy forward. Our joint determination and goodwill have been critical in getting this project to where it is today and we are immensely pleased with the outcome."

On hand to witness the ceremony were Kaduna State top government officials led by the state commissioner of finance, who also signed the project implementation agreement component with the World Bank.