Starting Monday, December 2, 2024, creditors holding Ghana’s energy sector bonds will begin receiving payments for outstanding debts from ESLA Plc. This marks a significant step in addressing obligations tied to the country’s energy sector.
The decision follows an agreement reached last week between ESLA Plc and investors for an early repayment arrangement. This development comes just two months after ESLA reported that approximately 90% of non-sovereign bondholders had submitted their bonds for tender under the domestic debt exchange program.
Election-Related Pressures
Citi Business News has learned that some creditors remain uneasy about the timing of the payments, as they coincide with the December 7 general elections. The government is under considerable pressure to settle these obligations before its tenure ends on January 7, 2025.
Payment Terms and Adjusted Bond Liabilities
The payments will be made at par value, excluding interest payments. ESLA Plc currently holds an outstanding bond liability of GHS 6.4 billion. Initially, these bonds carried coupon rates between 19.5% and 20.5%. However, under the 2023 debt restructuring program, rates were reduced to between 8.35% and 15%, with maturities extended to between 2027 and 2038.
Context of Debt Restructuring
Ghana launched its debt restructuring program in December 2022 as part of broader efforts to secure an International Monetary Fund (IMF) bailout. The restructuring was necessitated by the country’s unsustainable debt levels, which had ballooned to critical proportions.
As ESLA Plc begins bond repayments, stakeholders will closely monitor its impact on investor confidence and the broader financial environment ahead of the elections.
