Ghana initiated its 2021 International Capital Market Programme for the issuance of sovereign bonds in the last quarter of 2020. Subsequently, Parliament on 10th November 2020, granted Government approval to issue bonds amounting to US$3.00 billion, of which proceeds of up to US$1.5 billion was to be applied to support the 2021 budget and growth expenditures. The balance was to be used for reprofiling domestic debt and liability management purposes. Parliament also approved a further issuance of up to US$ 2.0 billion, for liability management purposes and reprofiling of domestic debt, should market conditions prove favourable.
In March 2021, Ghana successfully issued bonds worth US$3.025 billion comprising the first 4-tranche Eurobond which included an innovative zero-coupon bond, under the 2021 ICM Programme. The 4-tranche transaction was executed after a three-day virtual roadshow with a series of fixed income meetings with investors mainly domiciled in North America and Europe. Based on feedback received from various investor engagements, including the roadshow meetings in March, Ghana accelerated its plans to develop and establish a Sustainable Financing Framework (the “Framework”) that could be used in connection with any future ESG linked or related capital markets issuance.
The Ministry is pleased to report that the Framework, including the Second Party Opinion (SPO), has now been published on the Ministry’s website. It should be noted that publishing the Framework does not imply any new issuance under the ICM Programme. The intention of publishing the Framework is simply to allow our investors and stake holders to review its contents and be guided by it.
The Framework provides the Government of Ghana, through the Ministry of Finance the criteria to screen programmes and projects with sustainable, green and/or social credentials that may require financing from the National Budget.
Under the Framework, it is recommended that any ESG related issuances should fall under two (2) broad categories of Sustainable Financing Instruments- (a) those that will finance or re-finance eligible green and social projects and expenditures (Green, Social and Sustainability bonds) and (b) those that are linked to our performance versus our targets on certain defined KPIs (Sustainability Linked Bonds).
It is however important to note that, given the current market conditions, strong reserves position, the recent US$ 1.007 billion SDR allocation and the relatively stable currency, the Government of Ghana does not intend to access the international capital markets again this year.
Source: Ministry of Finance