GH¢3.6bn interest paid so far by ESLA Plc  

KPMG Ghana, Partner, Fredrick Dennis

A total of GH¢3.615 billion has been disbursed as interest payment to Energy Sector Levy Act (ESLA) Plc –the institution established for the purpose of raising money to clear outstanding energy sector debts– bondholders so far, KPMG, administrators of Special Purpose Vehicle (SPV), has revealed.

A partner at KPMG, Fredrick Dennis, told investors and brokers at the Ghana Stock Exchange (GSE) that an outstanding amount of GH¢266.44 million has been transferred to the Trustee to be paid to bondholders of the last two bonds in December 2020 and January 2021.

“One of the things that ESLA has been known for is that we pay our coupons. Because of the way our system has been set up, it would be very difficult for us to default in terms of our coupon payment. We have over the period paid out our coupons according to schedule. Therefore, all bondholders should expect to receive their funds on the due date,” he said at the GSE’s Fact Behind the Figures series.

ESLA Plc has, since inception, issued bonds worth GH¢8.294 billion while there is a total outstanding of GH¢7.63 billion following a buyback of some GH¢664 million in June 2019.

EDRL Collections

The major channel through which funds are mobilized to pay bondholders is the Energy Debt Recovery Levy (EDRL). In 2019, the EDRL collections stood at a monthly average of GH¢140.6 million. This represents 101.21 percent of expected collections and is above the 88.50 percent expected realization of projected amounts. Excess collections for 2019 presented some cash flow robustness and supported the issuance of new tranches in the first quarter of 2020.

For January-October 2020, actual EDRL collections stand at a monthly average of GH¢128.1 million. Actual cash collections for the period represent 80.79 percent of expected collections. In nominal terms, on a monthly average EDRL collection for 2020 is lesser than that of 2019, thus far.

However, data for September and October 2020 show increased collections of GH¢180.4 million and GH¢190.7 million respectively above the projected average monthly collection of GH¢158.6m for 2020. The increased collections witnessed in September and October, 2020 is expected to continue for the rest of the year in light of the peak election season and pending Christmas festivities, thus improving ESLA’s cash flow and liquidity.

ESLA Plc background

ESLA Plc was incorporated in September 2017 as a Special Purpose Vehicle (SPV), sponsored by the Government of Ghana, to amongst others issue debt securities to refinance and repay energy sector debt.

It has successfully collected revenues over the last two years, a combination of historical actuals as well as projections from the National Petroleum Authority (NPA) have been used to forecast petroleum products’ consumption over a 12-year forecast period to 2032.

ESLA Bond Transaction has been recognized as the best restructuring deal at the Europe, Middle East, Africa (EMEA) Finance Achievement Awards 2017. The ESLA Bond Transaction was part of nine transactions across EMEA that were recognized in various categories that year.

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