Ghana announces first social bond issue for USD 2 billion

Ghana will issue up to $ 2 billion in green and social bonds by November. The proceeds from these durable bonds will be used to refinance debt used for social and environmental projects, Ghana Finance Minister Ken Ofori-Atta said in an interview with Bloomberg.

This operation will make Ghana the first African country to sell debt to finance development programs. The country plans to borrow up to $ 5 billion in international markets this year.

“The bonds are expected to be issued in the fall and the maximum could be $ 2 billion”, after Ghana already sold $ 3.03 billion in March of the $ 5 billion for which he approved his budget, Ofori-Atta said. Of this total, $ 3.5 billion will be used to refinance the debt already collected. “Our new real debt will be $ 1.5 billion,” he said.

The Minister of Finance also said that durable bonds “are not cheap, there is no discount”, and that Ghana is however seeking to negotiate the best terms.

Ghana, Africa’s largest gold producer, which targets a budget deficit of 9.5% of gross domestic product this year from a deficit of 11.7% in 2020, expects its production to increase by 5% against 0.4% last year.

A social bond is a debt instrument used to raise funds for projects with positive social outcomes, such as education, health care and food security. His show is on a global upward trajectory, with investors combining profits and missions to fight inequality. This type of bond reached record levels in 2020 and is expected to grow by 6% to reach US $ 150 billion in funds raised in 2021.

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