Government has appointed Fidelity Bank and Standard Chartered Bank as joint lead Managers for the issuance of an Energy Sector Levy Act (ESLA) backed Bond to the tune of about GH¢10 billion.
The amount is the total estimated legacy debt within the energy sector.
The two banks were selected after government evaluated 10 proposals for Transaction Advisors.
A statement issued by the Publics Relations Unit of the Ministry of Finance said the Joint Lead Managers were 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.
The Lead Managers on behalf of Government shall set up a Special Purpose Vehicle (ESLA-SPV) to issue long-term bonds 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.
The statement said a portion of the bond proceeds shall also be used to re-finance previously restructured debt due Banks that were currently being repaid with ESLA receivables, as well as the BDC debt due the Banks.
The statement said the Energy bond issuance, the proceeds of which would be used to repay the legacy debt of the energy sector SOEs, was in line with our strategy as stated in the Budget Statement and Economic Policy of Government, to streamline ESLA flows to resolving the various issues within the energy sector, which had led to intermittent power supply and high tariffs, as well as provide liquidity to the banking sector.
“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,” the statement added.