Debt bt Refina inancing ncing Invest estor Presen enta tati - PowerPoint PPT Presentation

December 2019 Consolid solidati ating ng Gains ns in Energy rgy Sector or Debt bt Refina inancing ncing Invest estor Presen enta tati tion on

Outline 1 Executi cutive e Summa mary 2 The Transaction saction Structure cture Update on the “E.S.L.A.” Bond Programme 3 4 The Energy Sector Levy Act (“E.S.L.A.”) 5 Amend ndmen ment t to the Programme mme 6 At a Glance: “E.S.L.A.” & The Bond d Market 7 Summa mary of Financi ncial al Model el Assum umpti ptions ons 8 Summa mary of Financi ncial al Model el Output puts 9 Indica icati tive e Term Sheet et 2

Executive Summary E.S.L.A. Plc lc is is a publi blic li limi mited ed li liabili ability ty compan ompany esta establ blis ishe hed in in 2017 as as an an in inde dependent endent Spec ecial al Purpos ose Vehicle ehicle (SPV) V) prim imari arily ly to to issu issue de debt bt se securities ities to to ref efin inan ance the the Ener Energy gy Sect ector or Debt Debt. It It was as es esta tabli blishe hed by by the he Go Govern ernment ment of of Ghan Ghana ac actin ting th through ough the he Min inistr istry of of Fi Finan ance, e, wi with th the Nat National onal Trust st Holdin olding Compan ompany (NT NTHC) as as its its sole sole nomin ominee ee sh shareh arehol olde der. E.S.L.A. Plc lc is is man anage aged by by KPMG as as the the Ad Admin inistrat istrator or.  In 2017, E.S.L.A. Plc successfully issued the first E.S.L.A. Bonds, Tranche E1 and Tranche E2 maturing in 2024 and 2027 respectively, and raising GHS 4.784 billion in total for the purpose indicated above. An additional GHS 880 million of Tranche E2 was also raised in 2018. E.S.L.A. Plc has also issued Tranche E3, a GHS 1 billion 2029 maturity bond in 2019. The Bonds are backed by the Energy Debt Recovery (EDR) Levy imposed under the Energy Sector Levy Act.  The current outstanding issuance is GHS 6 billion, representing a total issuance of GHS 6.664 billion, out of which GHS 664 million was redeemed in a buyback transaction financed with funds from the Lock Box account.  In the 2019 Mid-Year Budget Review, the Government of Ghana increased the EDRL for Petrol, Diesel, LPG and Marine Gas Oil (Foreign) to GHp49, GHp49, GHp41 and GHp49 respectively, whereas Marine Gas Oil (Local) and Fuel Oil remained the same at GHp3 and GHp4 respectively.  E.S.L.A. Plc seeks the consent of bondholders to decrease the Debt Service Coverage Ratio from 2x to 1.25x under Condition 12.3(c) of the Prospectus, in order to issue additional bonds to pay outstanding energy sector debts.  E.S.L.A. Bonds have seen satisfactory demand and liquidity. Data from the Central Securities Depository (September 2019) show that E.S.L.A. Bonds account for 6.26% of total bonds outstanding. The bondholder profile is as follows: Domestic Investors, 99.51%; Offshore Investors, 0.49%. Domestic Investors include Banks 42.38%, Asset Managers 25.62%, Pensions 8.52%, Bank of Ghana Welfare 3.51%, SSNIT 3.18%, Insurance Companies 1.46% and Others 14.82%. 3

The “E.S.L.A.” Bond Transaction Structure Transac acti tion on structure ture is simple e and straightf ghtfor orwar ard d with buffer ers built lt-in. in.  SPV is totally ring fenced, no cash flows back to Sponsor until bonds are fully redeemed.  The Lock Box holds excess EDR Levy cash flows above the minimum debt service reserve amount.  Cash built up in Lock Box account can flow back to DSRA to meet any debt service shortfall.  MOF Capped Cash Commitment can be drawn on demand to support debt service funding shortfall, if any. E.S.L.A .L.A. . PLC repays energy gy sector tor lender ers and supplier liers directly tly with cash from bond proceeds eeds. Payable on Debt Demand Cappe pped MOF Service Due Commitme tment Debt Service e Reserv erve e Energy Bond (GHS600mn) Account t (DSRA RA) (Bondhol olders) 1.25x 25x Cover er Excess cashflow above Minimum1.25x (or shortfall below) Debt Service Cover DSRA Issues Proceeds of Energy EDRL Lock ck Box Account Energy Bond Energ rgy Debt Bonds Payments Oil Marketi eting g (excess ess flows s abov ove e Recov overy ery Levy y Compa panie ies s (OMCs) s) DSRA RA minimu mum (EDRL) requirem emen ents ts) ) Assignment of EDRL Flows by Government (Iss ssuer) Proceeds from Sales of Petroleum Products Repayment of Energy Sector Debts Petrol oleum m Prod oduct t Consu sume mers Energy Sector tor Lenders and Suppl pplie iers 4

Update on the “E.S.L.A.” Programme E.S.L.A .L.A. . Plc was incor orporat orated ed in Septem ember er 2017 as a Special ial Purpose Vehic icle le (SPV), , sponsor ored ed by the Govern ernmen ent t of Ghan ana, a, to to among ngst t ot others issue e debt securit rities ies to to refinan nance e and repay energy rgy sector or debt. t. 7 Year Tranch nche e (E1) 10 Year Tranch nche e GHS2.409 billion (E2) November 2017 GHS2.375 billion Buyback k and 10 Year Tranch nche e November 2017 cance ncell llation ion of (E3) Tap of 10 Year GHS1 billion 2024s and 2027s Tranch nche e (E2- B) B) Tap of 10 Year June 2019 totall lling ing GHS615 million Tranch nche e (E2- C) C) GHS664 million January 2018 GHS265 million June 2019 August 2018 November January August June 2017 2018 2018 2019 Total Issuance of GHS6.664 billion Tota otal l Outsta tandin ding g of GHS 6 bill llio ion Source: E.S.L.A Plc. 5

Update on the E.S.L.A. Programme E.S.L.A. Plc Bond Programme (GHS’ million) Inves estor tors by Type 7,000.00 6,664. 64.74 74 (664. 4.74) 74) 6,000. 00.00 00 SSNIT Pension Others 6,000.00 3.18% 8.52% 14.82% Rural Banks 0.02% Bank of Ghana Foreign Investors Welfare Fund 0.49% 5,000.00 3.51% Insurance 1.46% 6,664.7 .74 4,000.00 Firms/Institutions 6,000.0 00.00 25.62% 3,000.00 2,000.00 Commercial Banks 42.38% 1,000.00 0.00 Origina iginal Iss ssue Buy Back y Back Outsta tstanding ing Amou mount Source: MOF, June 2019 E.S.L.A Management Accounts; CSD, September 2019 6

Energy Sector Levies Act (E.S.L.A.) “E.S.L.A.” consolida olidates es existing ing energy gy sector tor levies ies and redef efines ines a framework ork to to correc ect imbalanc alances es, , promot ote e financ ancial ial viabilit ility of Energy gy Sector or State Owned d Enterp rprise ises (SOEs) and facilitate investments into the sector. The levies imposed by the “E.S.L.A.” are deriv ived ed from the sale of petrol, ol, diesel, el, marin ine e gas oil, , residual dual fuel oil, l, liquef efied d petroleu oleum gas, keros osen ene, e, and electri tricit ity within in Ghana na No. Levy vy Purpose ose Collect ection on Agenc gency Accou ount Levy vy Com ompone onents 1. 1. EDR Levy y To facilitate the debt recovery GRA 1. EDSA; and Act 899 Act 997  Ghp41/ltr on Petrol and Diesel  Ghp49/ltr on Petrol and Diesel of the TOR, downstream 2. PGISsA  Ghp3 /ltr on Marine Gas Oil  Ghp3 /ltr on Marine Gas Oil – petroleum sector foreign  Ghp41 /ltr on Marine Gas Oil – exchange under-recoveries and Local  Ghp49 /ltr on Marine Gas Oil – power generation and Foreign  Ghp4 /ltr on Fuel oil infrastructure support Foreign  Ghp37 /kg on LPG  Ghp4 /ltr on Fuel oil  Ghp41 /kg on LPG  Ghp12 per litre on Petrol  Ghp16 per litre on Petrol 2. 2. Price e Stabi bilisation on To be used as a buffer for under-recoveries NPA Price Stabilisation and  Ghp10 per litre on diesel  Ghp14 per litre on diesel and Recove overy ry Levy vy or subsidies to stabilise petroleum prices Recovery Levy (“PSRL”)  Ghp10 per kg on LPG  Ghp14 per kg on LPG for consumers  Ghp40 per litre on Petrol  Ghp48 per litre on Petrol Road Fund Levy vy To support road maintenance GRA Road Fund 3. 3.  Ghp40 per litre on diesel  Ghp48 per litre on diesel  Ghp1 per litre on Petrol 4. 4. Energ ergy Fund Lev evy To support the activities of the Energy GRA Energy Commission  Ghp1 per litre on Diesel Commission as technical regulator (“EC”) Source: Energy Sector Levies (Amendment) Bill, 2017  Ghp1 per litre on Kerosene  Ghp1 per litre on Fuel Oil  3% per price of kWh charged on all categories of consumers 5. 5. Public Light ghting Levy vy To support investment, maintenance and ECG, NEDCo, VRA Ministry of Energy and payment of energy consumed by traffic and other the Electricity lights, street lights, public lights on suppliers of Distribution Companies highways electricity  2% per price of kWh charged on all categories of consumers 6. 6. Nationa onal To provide funding to support the national ECG, NEDCo, VRA National Electrification Elec ectrifi fication on electrification programme to improve and other Fund Schem eme Lev evy access to electricity across the country suppliers of electricity 7