Government may been compelled to issue the proposed energy bond for clearing energy sector debt at a rate higher than it targeted.
The proposed bond was expected to be issued at an 18% interest rate but its been gathered the new interest rate on its issuance will likely be 19% (1% higher than the earlier targeted rate).
Prime Business News gathered that the consideration of a higher interest rate is influenced by the corporate nature of the energy bond which the government plans to issue with the backing of the VRA’s books rather than directly via the Bank of Ghana with the Ministry of Finance to be treated as public debt.
Earlier during the IMF meeting with the government, the international financial agency pressured the administration to issue the energy bond in tranches and as a sovereign one but government maintained its position that, such method would be an additional burden to the nation in increased national debt: consequently, placing unnecessary constraints on its investment spending.
It also pointed out that it already in April this year issued a 10 and 5 year domestic bond at an interest rate of 18.75% and equally obligated with paying of interest on existing Eurobonds currently floating at an 8 to 10.75% interest range.
Alongside the road energy bond road show launched last week Thursday to woo foreign and local investors, there is speculations across the business community that government and the IMF will reach an agreement this week on the specific mode of issuance for the energy bond and consequently, have the first batch issued by the close of this week.
Related stories on energy bond: https://www.primenewsghana.com/business/govt-to-commence-road-show-for-energy-bond-tomorrow.html
https://www.primenewsghana.com/business/energy-bond-to-be-issued-in-fragments.html