ICBC contributes to $1.2 billion syndicated receivables-backed trade finance facility to COCOBOD for its 2009/2010 crop season financing needs (linked to ID#92056)

On September 25, 2009, a consortium of 33 financial institutions (including China Development Bank whose contribution is captured via project ID#92056 and the Industrial and Commercial Bank of China (ICBC) whose contribution is captured via project ID#92055) finalized a $1.2 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 2009/2010 crop season. The 33 participants in the loan syndicate included the Bank of Tokyo-Mitsubishi UFJ, Ltd., Calyon – Crédit Agricole CIB, China Development Bank Corporation, Ghana International Bank plc, ICBC (London) Limited, Natixis, Société Générale Corporate & Investment Banking, Sumitomo Mitsui Banking Corporation, Standard Bank, Standard Chartered Bank, BNP Paribas, HSBC, KFW IPEX Bank GmbH, Nedbank, African Development Bank, Bank of Baroda, Banco Espirito Santo, S.A., BHF-Bank Aktiengesellschaft, FBN Bank (UK) Ltd, WestLB AG, DZ BANK AG, Fortis Bank (Nederland) N.V., Intesa Sanpaolo S.p.A (Paris Branch), Landesbank Baden-Wurttemberg, MediCapital Bank Plc, The OPEC Fund for International Development (OFID), State Bank of India, London Branch, Zenith Bank (UK) Limited, Ecobank Ghana Limited, Ghana Commercial Bank Limited, Mega International Commercial Bank Co., Ltd., National Bank of Kuwait (International) PLC, and Union Bank UK Plc. The borrowing terms included a 1-year repayment period and an interest rate of LIBOR plus 250 basis points. 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.

Additional details

1. AidData has estimated the all-in interest rate by adding 2.5% to the average 6-month LIBOR rate in September 2009 (0.677%). 2. The individual contributions of the banks that participated in the lending syndicate are unknown. For the time being, AidData assumes equal contributions ($36,363,636) across all 33 members of the syndicate, which implies that the total financial commitment from Chinese state-owned banks (the contribution from ICBC captured in project ID#92055 and the contribution from CDB captured in project ID#92056) was $72,727,272. 3. 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.

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