Government receives Eurobond proceeds

Seth Terkper, Minister for FinanceSeth Terkper, Minister for FinanceThe government has received proceeds from the $1 billion Eurobond to facilitate the speedy implementation of projects and programmes under the 2013 budget.

The Minister of Finance and Economic Planning, Mr Seth Terkper, who made this known yesterday, said the $102 million (GH¢204 million) allocated for counterpart funding would facilitate the disbursement for committed funds from the development partners for the implementation of existing projects.

The counterpart funding projects include the Afram Plains Irrigation Project; rice projects in the northern and southern parts of the country; rural electrification project – Self Help Electrification Project (SHEP 4) — as well as the completion of the Bui Dam.

Major road networks which are at various stages of completion will also attract part of the counterpart funding. The roads include Awoshie-Pokuase; Asikuma Junction–Hohoe, Dodo-Pepesu Nkwanta, Nkwanta–Oti Damanko, Fufulso-Sawla, Ayamfuri-Asawinso and Agona Junction-Elubo.

Mr Terkper was briefing the media at the Flagstaff House on the status of the Eurobond proceeds and how they would be utilised.

Ghana went to the international market to raise $1 billion through bonds denominated in foreign currency (Eurobond) for a number of activities, including financing capital projects in the 2013 budget, refinancing maturing debts to reduce the cost of  finance, as well as using part to redeem the $750 million Eurobond issued in 2007 at a higher coupon rate (interest rate) of 8.5 per cent.

The minister said $307 million (GH¢614 million) had been earmarked for new projects in the 2013 budget, as well as $341 million (GH¢682 million) for refinancing maturing domestic debts, among others.

Mr Terkper said the early resumption of Ghana’s debut 2007 Eurobond would reduce the roll-over risk of refinancing the entire $750 million bond when it matured in 2017.

After four months of preparation, Ghana launched its Eurobond transaction on July 25, 2013. Following a road show that took the country to the UK, Germany and the USA, Ghana’s bid to raise $1 billion from the international capital market was oversubscribed.

On why the government did not go to the market early, Mr Terkper said, “We are not in the market early enough because of the process. We have a long but transparent process. The fact that the bond has been oversubscribed means we could not have chosen a better time.”

He also debunked claims that the bond was the only source of financing projects, saying, “We are financing mainly capital projects” and that the Ghana government would continue to finance projects.

By Timothy Gobah & Musah Jafaru Yahaya/Daily Graphic/Ghana