Completed Commercial AidData Chinese Aid

ICBC contributes to $1.3 billion syndicated receivables-backed trade finance facility to COCOBOD for its 2017/2018 crop season financing needs (Linked to Record ID#92556)

$48.15M USD

Funder	Industrial and Commercial Bank of China (ICBC)
Recipient Organization	Ghana Cocoa Board (COCOBOD)
Country	Ghana
Start Date	Sep 20, 2017
End Date	May 02, 2033
Duration	5,703 days
Number of Grantees	1
Roles	Recipient
Data Source	AidData Chinese Aid
Grant ID	`92557`

Grant Description

In 2017, Bank of China and ICBC contributions to $1.3 billion syndicated receivables-backed trade finance facility to COCOBOD for its 2017/2018 crop season financing needs, Ghana On September 20, 2017, a consortium of 27 financial institutions — including the Industrial and Commercial Bank of China (ICBC) and Bank of China (BOC) — finalized a $1.5 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 2017/2018 crop season.

The 27 participants in the loan syndicate included Ghana International Bank, Rabobank, Crédit Agricole, Natixis, Standard Bank, Sumitomo Mitsui, Bank of China, Tokyo-Mitsubishi UFJ Bank, Commerzbank, the Industrial and Commercial Bank of China, Rand Merchant Bank, Société Générale, ABN AMRO, Standard Chartered Bank, Barclays Bank, Afrasian Bank, Attijariwafa Bank, Ecobank, the Federated Project, Trade Finance Core Fund, and Tender Fund.

The borrowing terms included a 11-month repayment period, an interest rate of 1-month LIBOR plus 65 basis points, a commitment fee of 0.2275%, and an upfront fee of 0.7%. 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.

The first tranche of the loan was disbursed during the first week of October 2017.

📋 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 ($48,148,148) across all 27 members of the syndicate, which implies that the total financial commitment from Chinese state-owned banks was $96,296,296 (BOC's contribution is captured via Record ID#92556 and ICBC's contribution is captured via Record ID#92557).
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 0.7% flat (upfront) fee is functionally equivalent to a management fee.
The security margin is the assignment of cocoa contracts for 110% of the facility amount.

📚 Sources & References

COCOBOD 2016/2017 Files
COCOBOD secures US$1.3billion for 2017/18 cocoa season, 2017/2018 Cocoa Season To See $1.3bn Financial Boost
Cocobod PXF closes at US$500mn lighter
Ghana Parliament Approves U.S.$1.3 Billion for Cocobod
FINANCE COMMITTEE 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.