Finance Minister Ken Ofori Atta has said government raised GHC4.87billion – over $1billion- from the largely undersubscribed $2.5billiom energy sector bond, making it the highest energy bond on the continent.
The minority in Ghana’s parliament at a recent news conference said Ghana following the under subscription of the seven-year bond has become a “laughing stock” in the International community.
Addressing the media at the presser, the minority spokesperson on finance, Casiel Ato Forson further added Ghana lost some $1.2billion as a result.
Also, he raised red flags over the expenditure covering the floatation of the “failed” energy bond.
According to him “an astronomical GHs 80 million was spent on “administrative expenses” which essentially covers air tickets, hotel accommodation, per diems and other such expenses.”
“We are unable to come to terms with how such huge amounts could be spent on the team that floated this bond especially given the embarrassing failure that they encountered,” Ato Forson said in a statement.
But presenting the 2018 budget Wednesday in parliament, Mr. Ofori Atta dismissed the suggestion that the floatation of the energy sector bond was a gargantuan failure, saying: “It is now the highest energy bond in Africa.”
“As indicated in the Mid-Year Fiscal Policy Review, Government planned to restructure the debt of the energy sector SOEs by leveraging the Energy Debt Recovery Levy component of the ESLA. As a result, the Ministry of Finance this year sponsored the establishment of the E.S.L.A. Plc as a Special Purpose Vehicle (SPV).
“The SPV established a bond programme to issue Cedi-denominated medium-to-long-term amortizing bonds on the back of ESLA receivables to repay legacy debt to the tune of up to GH¢10,000.00 million.
“The first tranche of bonds issued under this programme, comprised a 7-year (GH¢2,408.60 million) and a 10-year (GH¢2,375.35 million) bond with coupons of 19.0 percent and 19.5 percent respectively, for a total of GH¢4,783.97 million,” he told the lawmaking chamber.
The proceeds from the bond issuance, he said, had helped reduce Non-Performing Loans within the banking sector and strengthened the balance sheets of the SOEs in the energy sector, saying: “To date the stock of energy sector debt has been almost halved. E.S.L.A Plc will continue to issue bonds to completely pay off the legacy debts.”
Source: Ghana/StarrFMOnline.com/103.5FM
