The Energy Debt Recovery Levy (EDRL) has recorded a monthly average of GHS128.1 million in actual cash collections from January to October 2020 which is lower than projected average of GHS158.6 million each month for this year.
In the latest ESLA investor update published by the Ghana Stock Exchange, total actual cash collections stood at GHS1, 281.84 million falling below expected cash collections of GHS1, 904.53 million for the period, representing 80.79percent of expected collections.
With regards to last year, actual EDRL collections stood at a monthly average of GHS 140.6 million. In 2019, actual cash collections lingered around GHS1687.87 million surging up beyond expected cash collections of GHS1, 666.34 million.
“This represents 101.21 percent of expected collections and is above the 88.50% expected realization of projected amounts,” ESLA Plc. mentioned adding that “In nominal terms, monthly average EDRL collection for 2020 is lesser than that of 2019 thus far”.
However, ESLA further asserted that despite the 2020 actual collections falling short of the stipulated target, “data for September and October 2020 show increased collections of GHS 180.4 million and 190.7 million respectively above the projected average monthly collection of GHS 158.6 m 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 improve ESLA’s cash flow and liquidity,”ESLA pronounced.
Also, the investor update report suggests that the excess cash collections for 2019 presented some cash flow robustness and supported the issuance of Tranche E4 and E4 B.
“In January 2020, ESLA issued a 12 year bond under Tranche E4 which raised GHS 430 million and subsequently in March same year, a further circa GHS 1.20 billion was issued under Tranche E 4 (Tranche E 4 B)
“The Lock Box holds excess EDRL cash flows above the minimum debt service reserve amount”.
Giving some insights into bonds issued so far under the Energy Sector Levy Act (ESLA) 2015, prior to the issuance of E4 bond tranches during the first quarter of 2020, “in 2017 ESLA successfully issued the first bonds under the Bond Programme (the Programme), Tranche E 1 and Tranche E2 maturing in 2024 and 2027 respectively, and raising GHS 4.784 billion in total for the purpose of refinancing energy sector debts.
“An additional GHS 880 million of Tranche E 2 was also raised in 2018. ESLA has also issued Tranche E 3 a GHS 1 billion 2029 maturity bond in 2019”.
Overall, ESLA Plc concludes that “the outbreak of the COVID 19 pandemic in December 2019 has had detrimental impacts across the globe. Ghana, from March 2020 has felt the socio-economic impact of the pandemic, even after a mix of fiscal and monetary measures were implemented by the [Government of Ghana (GoG)] to curb the devastating impacts.
“The three week lock down in parts of the country from March-April, which resulted in a large cross-section of the population (based in the Greater Accra and Ashanti regions) staying at home, reduced mobility and consequently fuel consumption
“This development directly impacted ESLA cash flows as expected with April being the hardest hit month. Nonetheless, the impact thus far on receivables remains manageable and supports current outstanding bonds under the Programme. Furthermore, the removal of restrictions by the President has restored ESLA cash flows to previous levels and expected to improve liquidity”.
