Energy bond to be issued in fragments

By Sam Edem
US Dollar notes
US Dollar notes

The Government has made known its intention to issue the proposed Ghc10 billion energy bond in fragments of two, or more.

It follows increasing calls from the banking sector players and other quarters of the country’s business community on government to end the delays in the issuance of the bond.

Prime Business gathered that this option is considered on the basis that the fragmented issuance will attract relatively low yields in terms of interest and consequently, lessen the burden of the debt on the government.

Deputy Energy Minister - Joseph Cudjoe, said the government is, “looking at raising 6 to 7 billion Ghana cedis at this stage because sometimes when it comes to raising funds, strategically if you go in with the huge amounts, investors can bargain for a higher yield. But if you control it and make it smaller, then many investors that show interest can accept very competitive rates”.

During its meeting with the government of Ghana, the IMF reiterated its recommendation that the bond is issued as a Sovereign one which would mean that the debt is treated as a direct government borrowing.

However, the government has insisted on issuing it on the books of State-Owned Power companies that have strong financial statements.

Also commenting on the proposed decision - Deputy Information Minister, Kojo Oppong Nkrumah explained that the deliberations were ongoing and are expected to last until the 15th of October, 2017.government plans to finance the bond with proceeds from the energy sector levy act, which is acclaimed to have accumulated to over Ghc3.29 billion as of December 2016.

Government plans to finance the bond with proceeds from the energy sector levy act, which is said to have accumulated over Ghc3.29 billion as of December 2016.