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By Felix Onuah and Chijioke Ohuocha
ABUJA/LAGOS, March 29 (Reuters) - Nigeria raised $500 million by issuing a 15-year Eurobond on Wednesday with a yield of 7.5 percent, the finance ministry said, helping it plug a huge budget deficit in Africa's largest economy.
To revive the economy, which slipped into recession last year for the first time in 25 years, the government plans to increase spending by almost 20 percent this year, leaving it with a budget shortfall of 2.36 trillion naira ($7.7 billion).
The money from the new bond, which follows an oversubscribed $1 billion Eurobond issue last month, will help fund infrastructure development work outlined in last year's budget, Finance Minister Kemi Adeosun said.
"The proceeds from this additional note issuance will go towards funding capital projects in the 2016 budget," she said.
Nigeria has been hit by a slump in global oil prices, which has reduced government revenues and battered its naira currency .
The government plans to spend a record 7.3 trillion naira ($24 billion) this year to help get the country out of recession. It planned to spend 6.1 trillion naira last year, but struggled to fund its budget.
Nigeria's February $1 billion Eurobond issue, set to mature in 2032, priced at 7.875 percent and was almost eight times oversubscribed.
The slightly lower yield the government will pay on Wednesday's issue may be an indication of the strength of demand for Nigerian debt overseas.
The country has registered a $300 million Diaspora bond programme, targeted at Nigerians abroad, with the U.S. Securities and Exchange Commission and is seeking at least $1 billion in loans from the World Bank and a $1.3 billion loan from China to fund railway projects.
The country is also planning a 20 billion naira "green bond" next month after a new savings bond this month targeted at retail investors to broaden its funding base. ($1 = 306.6500 naira) (Writing by Paul Carsten and Alexis Akwagyiram; Editing by Hugh Lawson)