Govt to launch $2.5bn energy bond to retire energy debts

Mr Ken Ofori Atta, Finance Minister

Mr Ken Ofori Atta, Finance Minister

The proposed Energy Bond by the government, which is aimed at raising about $2.5 billion to retire the country’s energy debts, will be launched next month.

Ken Ofori-Atta, the Finance Minister, who disclosed this during an interaction with journalists after the closing session of the African Capacity Building Foundation (ACBF) meeting in Accra on Tuesday, said structures were being put in place for the bond to be issued.

The two-day programme which ended in Accra yesterday, under the theme “Enhancing access to and absorption of development resources in Africa,” was attended by Ministers of Finance and Planning from Africa.

It discussed a five-year Strategic Plan (2017-20210) of the ACBF, which among others, aimed at raising $250 million in the next five years to support capacity building programmes on the African continent.

The Finance Minister said the interest of investors in the Energy Bond had been high.

“We have already completed a mini international road show on the Energy Bond and the response by the investors was encouraging,” he said.

Government this year announced plans to raise bonds to address the country’s energy legacy debts.

The country’s energy sector  debts which runs into millions of Ghana Cedis was largely accrued due to the reliance on gas and crude by the Volta River Authority  to produce power  as a result of the drop of the water level  in the Akosombo Dam, the main hydro power generation source  for the country.

Analysts say the huge energy debts remained a serious risk, particularly to the banking industry, due to the huge exposure of some of the universal banks to the energy sector.

Touching on the objectives of the ACBF, Mr Ofori-Atta said the member countries of ACBF expressed their resolve to upscale their financial support to the organisation.

He indicated that Ghana has pledged to provide $2million to the ACBF in the next five years.

The Executive Secretary of ACBF, Professor Emmanuel Nnadozie, in his closing remarks, said the World Bank and other donor partners had pledged to support his outfit to raise the $250 million.

He stressed that the capacity challenges facing the continent needed to be addressed to facilitate and accelerate the development of Africa.

Prof Nnadozie disclosed that ACBF had been adopted by the African Union as a specialised agency for capacity building.

He entreated ACBF member-countries to step-up their financial support to the Foundation to make it independent, saying “ACBF has to be politically and financially independent.”

The Chair of the Board of Governors of ACBF, Goodall Gondwe, commended Ghana for sponsoring the meeting.

He also lauded Ghana for her continuous financial support for the ACBF, adding that all the ACBF member countries should increase their financial support for the Foundation to reduce its reliance on donors.


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