ROSEMOND BOATENG ADDAI
FIDELITY BANK Ghana, technical advisors to the government on the controversial Energy Bond, has expressed its dissatisfaction about some reports on the Bond.
According to the bank, though they were not able to achieve their target of GH¢ 6 billion, the programme had been successful.
They, therefore, urged Ghanaians to be positive about the programme in order not to drive away investors.
Addressing the media yesterday, the chairman of the bank, Mr Edward Effah, said they were able to achieve about 85% of their targeted revenue, which, according to him, could be described as a successful programme.
He said the seven-year bond was oversubscribed at GH¢ 2.529 billion above the target of GH ¢2.4 billion at an interest of 19%.
He added that the 10-year bond closed with total bids of GH¢ 2.79 billion relative to the target of GH¢ 3.6 billion.
Mr Effah further argued that the transaction had helped to transform the restructuring legacy non-performing loans within Ghana’s energy sector into listed securities, which provide investors with more liquid and tradable exposure.
“We saw a significant increase in local investor participation in this issue. This is deemed as a remarkable development that signals local investor appetite for well-structured and tradable local instruments by a corporate,” he said.
Minority on energy bond
At a press conference on Wednesday, the Minority caucus in Parliament, led by former Deputy Finance Minister, Cassiel Ato Forson, said the issuance of the bond was in a terrible mess because the government allegedly cooked figures to outwit investors.
The Minority said the bond issuance ought to have gone through Parliament for approval, and indicated that it would summon the Finance Minister, Mr Ken Ofori-Atta, before the House over the case of under-subscription of the government’s Energy Bond.
According to Mr Forson, the Finance Minister had caused financial loss to the state to the tune of GH¢ 1.2 bn as a result of the under-subscription.
Between 2010 and 2015, the country recorded a poor rainfall pattern, which resulted in a recalibration of Ghana’s power generation mix.
In view of this, the government resolved to import crude oil and natural gas at world market prices to power thermal plants to generate more power.
In a bid to address the challenges in the energy sector and help generate the needed fund for the repayment of the energy sector debt, the Government of Ghana promulgated the ESLA Act in 2015 to charge specific levies rather than utilise its fiscal space.
On the back of the ESLA, the government, through the Ministry of Finance, invited proposals from local financial institutions to structure and securitise the Energy Debt Recovery Levy.
The GH¢10 billion ESLA Bond programme allowed the issuance of bond up to GH¢ 6 billion, given the existing model assumption on current cash flow projections.