Ghana to use $750 million of China loan in 2012, sell bonds

Ghana will spend $750 million of a loan from the China Development Bank Corp. on oil and gas projects next year and plans to offer longer-dated domestic bonds, according to the finance ministry.

The West African nation plans to borrow 1.6 billion cedis ($984 million) through domestic Treasury bill and bond sales, Simon Kyei, director of budgets at the finance ministry, told reporters in Accra today. The country will offer its first seven-year and 10-year bonds in 2012, said Deputy Finance Minister Seth Terkper. The longest-dated local-currency issue is currently five years.

Ghana, the world’s second-biggest cocoa producer, turned to the Chinese lender for a loan package worth $3 billion, the biggest in the country’s history, to finance infrastructure projects.

Ghana, which sold Eurobonds worth $750 million in 2007, is still considering a second offer, said Terkper.

“The Eurobond forms part of the financing mix that the Ministry of Finance is looking at,” he said. “We are monitoring the market to enter at the appropriate time.”

The terms on Ghana’s loan from China are more attractive right now, Terkper said.