Ver Angola


Angola reviews financing plan and admits issuing “green” bonds

Angola is reviewing its debt plan for 2022, due to the current geopolitical context and market volatility, and admits opting in the future to issue green bonds, governed by environmental and social criteria, according to an official source.


In an interview with Lusa, the director of the Public Debt Management Unit (UGD) of the Ministry of Finance, Dorivaldo Teixeira, said that despite the successful issuance of Eurobonds, in April, and in view of the increase in revenues, mainly due to the increase in the price of oil, the Government is reconsidering its financing needs.

"We have been reflecting on whether it makes sense to go ahead with more funding and, eventually, maybe it won't because external funding, given this phase in which markets are becoming increasingly volatile, especially due to the current geopolitical component and inflation ", he justified.

In April, Angola successfully concluded the issuance of debt securities on the international market in Eurobonds, worth 1.75 billion dollars, with a maturity of 10 years and a rate of 8.75 percent.

"The best thing, after closing this operation, which to some extent covered the needs for external financing, would be to use part of the additional revenues from oil, and not only, to meet the financing needs of the State. internal indebtedness, we will continue with what was planned", stressed the head of the UGD.

Dorivaldo Teixeira stressed that, from the point of view of public debt, the perspective is to "always have flexibility".

"If the conditions change, the amount will be available there, but if the current terms are maintained, eventually we will not even move forward (with more Eurobond issuances)", said the expert.

Dorivaldo Teixeira said that the ministry is carrying out internal studies to assess the possibility of issuing bonds associated with environmental and social criteria, known as ESG (an acronym for environmental, social and corporate governance issues).

"The Government has been investing in this perspective, we are evaluating how they can be made. But we are still at a premature stage, we have to work with the ministries that have the projects and it may not be appropriate to do so this year. But if the conditions remain adequate and the market is receptive, eventually we will be able to do it", he admitted.

But, in general, the stance regarding debt issuance "is more conservative", he stressed.

The war in Ukraine, if, on the one hand, had a positive effect on the price of oil, on the other hand, it increased the level of volatility in international markets, which could imply a rise in interest rates. "And this will require the States to be more cautious in launching issues in international markets, but perhaps at the end of the year, less tense markets will be possible," said Dorivaldo Teixeira.

The UGD official admitted that investors may tend to avoid emerging markets, and that, in general terms, debt will be more expensive.

But, "the case of Angola is special", he underlined: "we are coming from a reform process that has resulted in macroeconomic stability, with a continuous appreciation of the kwanza, and that helps us to tell a story of solidity, of a country that is shaping up for a growth process".

As for additional revenues, the intention is to "adopt a stance of reducing debt refinancing for the domestic market and creating savings for future challenges".

"It is necessary to take advantage of the high prices to 'clean up the house' and be able to carry out more operations of active management of liabilities", highlighted Dorivaldo Teixeira.

According to the debt plan, available on the Finance website since 8 February, Angola expects to raise 10.74 million dollars this year, of which up to 2.8 billion dollars could be raised in international markets through the issuance of bonds. debt in foreign currency (Eurobond).

Domestically, Angola expects to borrow 4.76 billion dollars, divided into 320 million dollars in contractual debt and 4.44 billion dollars in securitized debt.

According to official data, Angola's public debt stood at 30.34 billion kwanzas on 30 March, which represents 68 percent of GDP.

According to the same data, of this total, the debt with China and the domestic debt represent 30 percent each.


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