Active Mixed AidData Chinese Aid

ICBC contributes to $1.3 billion syndicated receivables-backed trade finance facility to COCOBOD for its 2020/2021 crop season financing needs (Linked to Record ID#92596)

$54.17M USD

Funder	Industrial and Commercial Bank of China (ICBC)
Recipient Organization	Ghana Cocoa Board (COCOBOD)
Country	Ghana
Start Date	Sep 29, 2020
End Date	Apr 29, 2033
Duration	4,595 days
Number of Grantees	1
Roles	Recipient
Data Source	AidData Chinese Aid
Grant ID	`92295`

Grant Description

In 2020, Bank of China and ICBC contribute to USD 1.3 billion syndicated receivables-backed trade finance facility to COCOBOD for its 2020/2021 crop season financing needs, Ghana On September 29, 2020, a consortium of 24 financial institutions — including the Industrial and Commercial Bank of China (ICBC) and Bank of China (BOC) — finalized a $1.3 billion receivables-backed trade finance facility (loan) agreement with Ghana Cocoa Board (COCOBOD), a state-owned enterprise and the world's second-largest cocoa producer, for purchasing cocoa from farmers during the 2020/2021 crop season.

Participants in the loan syndicate included: Bank of China (London Branch), Industrial and Commercial Bank of China (London Branch), Coöperatieve Rabobank U.A., DZ Bank AG, Ghana International Bank plc, MUFG Bank, Natixis, Société Générale, Standard Chartered Bank PLC, Citibank, Deutsche Bank, Commerzbank, Sumitomo Mitsui Banking Corporation, Sumitomo Mitsui Trust Bank, Banque Cantonale de Genève, London Forfaiting Company Ltd, AfrAsia Bank, and the OPEC Fund for International Development.

African and Ghanaian banks in the syndicate included Ecobank Ghana, Société Générale Ghana, Absa Bank Ghana, Stanbic Bank Ghana, and United Bank for Africa. Asian participation also included the State Bank of India.

The borrowing terms included a 7-month repayment period, an interest rate of 1-month LIBOR plus 175 basis points, a commitment fee of 0.62%, and an upfront fee of 1.25%. The Government of Ghana issued a sovereign guarantee in support of the loan. The loan was also secured by (i.e. collateralized against) receivables from future cocoa sales contracts.

📋 Staff Comments

For loan and debt rescheduling records with variable interest rates, AidData calculates the all-in interest rate at T0 based on the reference rate (such as LIBOR or EURIBOR) on the loan start date, plus any known margin. Please see the methodology for additional details.
The individual contributions of the banks that participated in the lending syndicate are unknown. For the time being, AidData assumes equal contributions ($54,166,666) across all 24 members of the syndicate.
Ghana’s cocoa production is regulated by the Ghana Cocoa Board (COCOBOD), an organization separate from the Ministry of Food and Agriculture that is wholly owned by the Government of Ghana. COCOBOD does not purchase any of the cocoa which is exported, but is responsible for assuring the quality of the product. To ensure the high quality of Ghana’s cocoa exports, the COCOBOD oversees horticulture practices and regulates the use of pesticides and fertilizer. In addition, COCOBOD sets the producer prices for cocoa farmers and, through a subsidiary, oversees the marketing of cocoa. The operations of the COCOBOD are funded through the receipt of a percentage of the revenue received from cocoa exports, but all profits after covering expenses are passed onto the Government of Ghana in the form of export taxes.
In August 2017, COCOBOD told the country’s parliament it was in financial distress due to obligations that included servicing China Eximbank loans for the Bui Dam Construction Project (captured via Record ID#183, ID#30801, ID#30709, and ID#30086).
AidData has assumed that the 1.25% flat (upfront) fee is functionally equivalent to a management fee.

📚 Sources & References

PRESS RELEASE: COCOBOD SIGNS $1.3 BILLION DOLLARS TRADE FINANCE FACILITY FOR THE YEAR 2020/2021 CROP SEASON
UPDATE 2-Ghana cocoa regulator signs $1.3 bln finance deal for 2020/21 season
COCOBOD SIGNS US$1.3 BILLION SYNDICATED LOAN FACILITY FOR 2020/2021 CROP SEASON
COCOBOD signs US$1.3bn syndicated loan to finance 2020/2021 cocoa purchase
Cocobod signs $1.3 Billion Dollars Trade Finance Facility for the Year 2020/2021 Crop Season
Parliament approves US$1.3 billion syndicated loan for 2020/21 cocoa purchase Loan applications and disbursements are still being received and processed as the projects continue to evolve. Ongoing monitoring and evaluation are in place to ensure project continuity.

All Grantees

Ghana Cocoa Board (COCOBOD)

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