Government settles on Fidelity, StanChart as joint Energy bond managers
Government has settled on Fidelity Bank and Standard Chartered Bank as led managers for its 10-year Energy bond.
This was after evaluating proposals from 10 transaction advisers that wanted to act as managers for the Energy Sector Levy Act backed bond.
According to a statement from the Finance Ministry, the Joint Lead Managers are expected to work closely with members of their respective syndicates or consortia and any other local banks or financial institutions as co-managers with the view to building capacity locally and facilitating knowledge transfer.
"The Lead Managers on behalf of Government (the “Sponsor”) shall set up a Special Purpose Vehicle (ESLA-SPV) to issue a long-term bonds (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 statement said.
The ESLA SPV is expected to issue bond(s) to the tune of about GHC10 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.
"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," the statement added.
The Ministry explained this is to streamline ESLA flows to resolving the various issues within the energy sector, which have led to an intermittent power supply and high tariffs, as well as provide liquidity to the banking sector.