Parliament last Friday approved five agreements to allow the country to derive maximum value from its mineral resources and monetise its mineral income accruing to the country in a sustainable and responsible manner, in line the Minerals Income Investment Fund (MIIF) Act, 2018 (Act 978).
The approval will enable the country to use a special purpose vehicle (SPV), Agyapa Royalties Limited, to secure about $1 billion to finance large infrastructural projects.
With that, Agyapa, which will operate as an independent private sector entity, will be able to raise funds from the capital market, both locally and internationally, as an alternative to the conventional debt capital market transactions.
The funds, which are expected to be raised from the Ghana Stock Exchange (GSE) and the London Stock Exchange (LSE), will be a long-term capital, without a corresponding increase in Ghana’s total debt stock and hence without a public debt repayment obligation.
The approval covered the Minerals Royalties Agreement, the Amended and Restated Minerals Royalties Investment Agreement and the relationship agreement among the government, the MIIF, Agyapa Royalties Limited and ARG Royalties Ghana Limited in relation to the gold royalties monetisation transaction under Act 978.
The rest are the assignment agreement between the MIIF and Agyapa Royalties Limited for the assignment of the right of the fund to Agyapa to receive the royalty value due from ARG under the investment agreement for the acquisition of the allocated minerals royalties from the Fund in consideration for shares to be issued by Agyapa to the Fund at an agreed price of $1 billion.
In addition, the approval covered the indemnity agreement among the government, Merrill Lynch International, JP Morgan Securities plc., BMO Capital Markets Limited, Peel Hunt LLP and Tamesis Partners LLP under the Minerals Royalties Investment Agreement in respect of the proposed offering of shares in Agyapa Royalties by Agyapa and the MIIF to institutional investors outside Ghana and the admission of the shares to the standard listing segment of the Official List of the Financial Conduct Authority and to trading on the LSE in relation to gold royalties monetisation transaction under Act 978.
The agreements were presented to the House on August 13, 2020, and referred to the Finance Committee for consideration and report.