Finance Ministry names lead managers for GH¢10bn energy bond

Fidelity Bank and Standard Chartered Bank will lead the issuance of a GHC10 million bond to clear Ghana’s energy sector debt, a statement from the Finance Ministry has announced, after it evaluated 10 proposals to a request for transaction advisers for an Energy Sector Levy Act (ESLA) backed Bond.

“This Energy bond issuance, the proceeds of which will be used to repay the legacy debt of the energy sector SOEs, is in line with our strategy as stated in paragraph 805 of the 2017 Budget Statement and Economic Policy of Government, to streamline ESLA flows to resolving the various issues within the energy sector, which have led to intermittent power supply and high tariffs, as well as provide liquidity to the banking sector,” the statement said.

According to the statement, the total estimated legacy debt within the energy sector is about GH¢10 billion.

“The Ministry looks forward to a successful ESLA Sponsored Bond issuance as we take steps to resolve the challenges of the energy sector, improve our country risk and debt sustainability outlook, as well as deepen our domestic capital market and promote broader economic growth and development,” it said.

Below is the full statement:

GOVERNMENT APPOINTS FIDELITY BANK AND STANDARD CHARTERED BANK AS LEAD MANAGERS FOR THE ISSUANCE OF AN ESLA BACKED LONG-TERM BOND TO RESOLVE THE ENERGY SECTOR SOE LEGACY DEBTS

1. After evaluating ten (10) proposals received in response to our Request for Proposals for Transaction Advisors for an Energy Sector Levy Act (ESLA) backed Bond, the Ministry of Finance is pleased to announce the selection of Fidelity Bank and Standard Chartered Bank led consortia as Joint Lead Managers (JLMs).

2. The Joint Lead Managers are expected to work closely with members of their respective syndicates/consortia and any other local banks/ financial institutions as Co-managers with the view to building capacity locally and facilitating knowledge transfer.

3. The Lead Managers on behalf of Government (the “Sponsor”) shall set up a Special Purpose Vehicle (ESLA-SPV) to issue a long-term bond (The “Energy Bond” or the “Bond”) on the back of ESLA receivables assigned to the SPV, which shall be listed on the Ghana Stock Exchange (GSE). The ESLA SPV is expected to issue bond(s) to the tune of about GH¢10 billion, being the total estimated legacy debt within the energy sector. A portion of the bond proceeds shall also be used to refinance previously restructured debt due Banks that are currently being repaid with ESLA receivables, as well as the BDC debt due the Banks.

4. This Energy bond issuance, the proceeds of which will be used to repay the legacy debt of the energy sector SOEs, is in line with our strategy as stated in paragraph 805 of the 2017 Budget Statement and Economic Policy of Government, to streamline ESLA flows to resolving the various issues within the energy sector, which have led to intermittent power supply and high tariffs, as well as provide liquidity to the banking sector.

5. The Ministry looks forward to a successful ESLA Sponsored Bond issuance as we take steps to resolve the challenges of the energy sector, improve our country risk and debt sustainability outlook, as well as deepen our domestic capital market and promote broader economic growth and development.

Signed

ISSUED BY THE PUBLIC RELATIONS UNIT

MINISTRY OF FINANCE

Finance Ministry names lead managers for GH¢10bn energy bond

Fidelity Bank and Standard Chartered Bank will lead the issuance of a GHC10 million bond to clear Ghana’s energy sector debt, a statement from the Finance Ministry has announced, after it evaluated 10 proposals to a request for transaction advisers for an Energy Sector Levy Act (ESLA) backed Bond.

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