The government of Ghana will issue a 1.5 billion dollars Eurobond later this year, Minister of Finance Seth Emmanuel Terkper told parliament here on Tuesday.

eurobond
eurobond

The bond will be raised with a World Bank Policy Based Guarantee (PBG) of 400 million dollars, which is another sub-Saharan Africa initiative, and first for the nation.

This was contained in the 2015 revised budget estimates presented to parliament by the minister that seeks to raise additional resources of 271.18 million dollars to fund additional expenditures resulting from the revisions made to the 2015 budget.

The Eurobond, which is the fourth Ghana is embarking upon since 2007, is to be used to restructure some maturing debts including the 2017 Eurobond and finance some capital projects.

In view of this, Terkper said domestic interest payment would be lower than previously estimated while foreign interest payment would be higher than previously projected.

He explained that the 1.5 billion Eurobond was part of government’s strategy to diversify funding sources and lengthen the maturity profile of the debt portfolio.

According to him, part of the money raised would be used to buy out the 750 million Eurobond issued in 2007 which would be due for payment in 2017.

“Mr. Speaker, Government has developed a Medium-Term Debt Strategy to ensure that financing requirements are met promptly at the lowest possible cost consistent with prudent degree of risk.

“In line with the strategy, Government intends to diversify funding sources and lengthen the maturity profile of the debt portfolio. The strategy includes the use of innovative financing instruments as well as plans to issue a Eurobond of 1.5 billion dollars,” the minister stated. Enditem

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