The Ghana Education Trust Fund (GETFund) is to borrow a total of GH¢2.3 billion, equivalent to US$500 million, from a consortium of financial institutions to be used to finance education infrastructure nationwide.
Graphic Online understands that among the infrastructure to benefit from the loan are the construction and completion of basic schools and vocational and technical training centers across the country.
In a request for expression of interest (EOI) published in the Tuesday, July 11 edition of the Daily Graphic newspaper, the Ministry of Finance, which is overseeing the transaction, said the facility is to be refinanced by a portion of allocations to the Ghana Education Trust Fund (GETFund).
The GETFund Act mandates that an equivalent of 2.5 per cent of VAT collections be transferred to the fund on annual basis.
Other sources of financing for the fund include money approved by Parliament, contributions, grants, gifts and donations as well as investment proceeds.
The Expression of Interest (EOI) asked interested lenders to note that the loan does not constitute government debt and the government will not guarantee it.
Last year, Parliament approved the disbursement of a total of GH¢790 million for the GETFund to distribute to the tertiary, secondary and basic education subsectors as well as other agencies under the fund.
This year, however, the amount approved rose to GH¢924.8 million.
Tenor of loan
It further explained that the facility will have a lifespan of 24 months and will be “on the back of a portion of GETFund receivables as enacted by the Ghana Education Trust Fund Act 2000 (Act 581).”
It added that the refinancing will be on a portion of the VAT – Value added tax – receivables as prescribed by the GETFund Act.
The EOI further explained that the borrower “will ideally seek to access the funds by the end of September 2018.”
As a result, it asked interested financial institutions, including investment banks, to factor the timeline in mind, when preparing their proposals.
“The lender will be expected to release funds for the project on the presentation of certified interim payment certificates (IPC) verified by consultants appointed by them,” it said.