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ICBC contributes to $1.13 billion syndicated receivables-backed trade finance facility to COCOBOD for its 2022/2023 crop season financing needs (Linked to Record ID#95486)
| Funder | Industrial and Commercial Bank of China (ICBC) |
|---|---|
| Recipient Organization | Ghana Cocoa Board (COCOBOD) |
| Country | Ghana |
| Start Date | Oct 04, 2022 |
| End Date | Mar 21, 2033 |
| Duration | 3,821 days |
| Number of Grantees | 1 |
| Roles | Recipient |
| Data Source | AidData Chinese Aid |
| Grant ID | 95485 |
Grant Description
In 2022, ICBC and Bank of China contributions to $1.13 billion syndicated receivables-backed trade finance facility to COCOBOD for its 2022/2023 crop season financing needs, Ghana On October 4, 2022, a consortium of at least 18 financial institutions — including the Industrial and Commercial Bank of China (ICBC) and Bank of China (BOC) — finalized a $1.13 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 2022/2023 crop season.
Participants in the loan syndicated included Bank of China, Industrial and Commercial Bank of China (ICBC), Coöperatieve Rabobank, MUFG Bank Ltd, Natixis, Standard Chartered Bank, Ghana international Bank plc, DZ BANK AG Deutsche Zentral-Genossenschaftsbank Frankfurt am Main (DZ Bank), the Arab Bank for Economic Development in Africa (BADEA), EcoBank Ghana Limited, the OPEC Fund for International Development, United Bank for Africa PLC, Ahli United Bank B.S.C., Federated Hermes Inc, AfrAsia Bank Limited, Citibank N.A, Absa Bank Ghana Limited, and GCB Bank Plc.
Standard Chartered Bank, Coöperatieve Rabobank, Industrial and Commercial Bank of China (ICBC), MUFG Bank Ltd, Natixis and Ghana International Bank plc were the Initial Mandated Lead Arrangers for the facility.
Bank of China Limited, London branch joined the facility as Senior Mandated Lead Arranger, while DZ BANK AG Deutsche Zentral-Genossenschaftsbank, Frankfurt am Main and the Arab Bank for Economic Development in Africa (“BADEA”) joined as Mandated Lead Arrangers. Ecobank joined as Arranger. The OPEC Fund, United Bank for Africa PLC, Ahli United Bank B.S.C. and Federated Hermes Inc joined as Lead Managers.
AfrAsia Bank Limited, Citibank N.A, Absa Bank Ghana Limited and GCB Bank Plc joined as Managers.
ICBC's estimated contribution is captured via Record ID#95485 and Bank of China Limited's estimated contribution is captured via Record ID#95486.
The borrowing terms included a 7-month repayment period, an interest rate of the Secured Overnight Finance Rate (SOFR) plus a 1.75% margin, and a 0.5% default (penalty) interest rate. 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 ($62,777,777) across all 18 members of the syndicate, which implies that the total financial commitment from Chinese state-owned banks was $125,555,554.
- 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).
- The syndicated loan agreement can be accessed in its entirety via https://www.dropbox.com/s/usqqxqv4mknnm6f/COCOBOD%202022%20Syndicated%20Loan%20Agreement.pdf?dl=0.
Sources & References
- COCOBOD secures US$1.13 billion to purchase cocoa
- Cocobod signs $1.13 Billion 30th Annual Cocoa Syndicated Loan
- COCOBOD SIGNS US$1.13 BILLION TRADE FINANCE FACILITY FOR 2022/2023 COCOA SEASON
- COCOBOD will not default in repaying loans; Syndicated Loan to be successful – Redd Intelligence
- Ghana's Cocobod signs $1.13 billion loan for 2022-2023 cocoa purchases
- Ghana's Cocobod Signs $1.13bn Loan For 2022/23
- Joint Memorandum on Approval of the Terms and Waivers
- US$1,130 million pre-export receivables backed trade finance facility 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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