States have begun to defend their plans for the U.S.$3.05bn foreign loan they are to receive from the $7.9bn loan proposed by the Federal Government for the various pipeline projects.

President Goodluck Jonathan had sought the approval of the Senate for the various proposed pipeline projects for the revised 2012-2014 Medium Term External Borrowing Plan of $7.9 billion which the Senate later referred to the Senator Ehigie Uzamere-led committee for further legislative input.

Imo State Commissioner for Finance Chika John Okafor presented the loan proposal of $45million for erosion management and another $20million for youth empowerment programme; while his Abia State counterpart, Sam Nwonu Igbo, presented a $200 million loan proposal for such projects.

Uzamere blamed the non-disbursement of the loan on what he called a communication gap between the Federal Ministry of Finance and the state governments.

He directed Finance Minister Ngozi Okonjo-Iweala to look into the states' complaints and reconcile them.

Responding, Okonjo-Iweala, represented by the Minister of State for Finance, Yerima Lawan Ngama, said the states were barred from individually negotiating for loan to make the interest rates uniform.

According to the minister, the loan will be converted to a grant under a "buy-down" arrangement after successful implementation and it is expected to be repaid in 40 years and attracts 0.75 per cent interest rate.

The borrowing plan is made up of $4,846.3billion as Federal Government's share, $3,059,39billion as states' share.