Government ready to disburse Eurobond
Mr Seth Terkper, Minister of Finance and Economic Planning, on Monday announced government’s readiness to release proceeds from the $1 billion Eurobond for infrastructural development.
He said $750 million of the $1 billion was to be released soon for those infrastructural development projects.
Mr Terkper, who announced this during the daily media briefings at the Flagstaff House, Kanda said the Eurobond transaction proceeds had been lodged with the Bank of Ghana.
He said ongoing road projects at Madina, Kintampo and Konongo were some of the projects to benefit from the facility.
The Minister said the gas infrastructure project at Atuabo and the Bui Dam Hydroelectric project would also benefit from the facility.
He indicated that the proceeds would be used as counterpart funding for projects already approved, mainly through loan agreements.
“They would also support capital expenditures in the 2013 budget statement and for refinancing of maturing domestic and foreign debt to reduce the cost of borrowing,” the Minister added.
The Finance Minister added that $102 million would be used for road projects with counterpart funding, $300 million for new projects, $250 million to refinance the 2007 bond while $340 Million would be used to refinance domestic debt.
Mr Terkper said considering the fact that access to concessional funds would dwindle as a result of the country’s attainment of a lower middle income status, “the tapping of the global bond market and provisioning for existing bonds will strengthen Ghana’s credentials as a regular and responsible borrower in those markets.”
Besides, he said, the Eurobond proceeds would speed up the implementation of development projects in the 2013 budget, “In particular, counterpart funding can be made available for previously approved projects to enable these projects to be completed”.
He said the early redemption of Ghana’s debut 2007 Eurobond would reduce the rollover risk of refinancing the $750 million bond when it matured in 2017.
The Minister said the bond was successful considering the oversubscription and 10-year tenure for repayment.
He said the bond was also an attempt to add to the country’s sources of funding.
Government a couple of weeks ago floated a one billion dollar Eurobond, which was oversubscribed raking in dividends that would be used to finance a number of development projects.