Quantum Terminals Limited secures guarantees for $10m bond
PIDG Company GuarantCo has signed a deal with Quantum Terminals to support the operations of Quantum’s Liquefied Petroleum Gas (LPG) storage business in Ghana.
Quantum Terminals is issuing a GHC45 million ($10 million) 10-year corporate bond on the Ghanaian Stock Exchange.
This is the first corporate bond to be issued by a non-financial institution in Ghana.
The bond has a 75% partial credit guarantee from GuarantCo, for the benefit of pension fund investors that have subscribed to the issue.
This is the first tranche of a GH¢140 million bond programme by the company. Quantum Terminals is the first non-financial institution to issue a corporate bond on the Ghana Fixed Income Market.
The long tenor of 10 years is also a first in the Ghanaian corporate bond market.
The local currency nature of the bond will allow Quantum Terminals to manage future exchange rate volatility.
The bond’s innovative nature and ability to strengthen capital markets in Ghana is inextricably connected to GuarantCo’s mission, which is to support the development of capital markets and infrastructure in emerging and frontier markets, to assist with the alleviation of poverty.
This bond issuance is expected to have significant demonstration effect in Ghana.
GuarantCo CEO, Lasitha Perera said, “GuarantCo is delighted to have partnered with Quantum Terminals Limited on this landmark corporate bond issue, which will support the construction of essential energy infrastructure. Ghana’s capital markets have a crucial role to play in the development of the country’s infrastructure sector, which is critical to its economic development and future prosperity. It is our hope that through the precedents and framework that this transaction establishes other corporates, and investors can benefit and stimulate the growth of the local capital markets.”
In an allied development, another PIDG company, the Emerging Africa Infrastructure Fund (EAIF) announced today it has agreed terms to lend US$10 million to Quantum Terminals.
EAIF is one of the leading providers of debt funding to private infrastructure projects in Africa.
EAIF and GuarantCo are the joint Mandated Lead Arrangers of the debt finance for the gas storage and power station projects.
Financial close on the EAIF loan to Quantum Terminals is expected later this month.
Emmanuel Egyei-Mensah, Executive Director at Quantum Terminals, said, “This is not only the first 10-year guaranteed and secured notes in Ghana, but also the first by a non-financial institution in the country and GuarantCo’s guarantee has been very critical in facilitating this transaction. This is a great example of how development finance institutions should be partnering with the private sector. I believe the completion of this bond will signal a new beginning for corporates accessing capital markets in Ghana. We expect this to be the first of many more”.
EU-funded research has suggested that LPG is one of the cleanest thermal fuels available in terms of CO2 emissions, which on average, in industrial use, generates 15% less CO2 per kilowatt hour than oil and 50% less than coal.
Quantum Terminals helps to increase the uptake of LPG for domestic use, substituting coal and wood, the resultant fumes of which when used in cooking has detrimental health impacts on residents.
Women and children, in particular, on average spend more time in the house compared to men and will see significant health benefits from substituting wood/charcoal with zero emission LPG.