Overview

ICBC contributes to $1.5 billion syndicated receivables-backed trade finance facility to COCOBOD for its 2010/2011 crop season financing needs

Commitments (Constant USD, 2023)$53,589,102

Commitment Year•2010Country of Activity•GhanaDirect Recipient Country of Incorporation•GhanaSector•Agriculture, Forestry, FishingFlow Type•Loan

Status

Project lifecycle

Completion

Pipeline: PledgePipeline: CommitmentImplementationCompletion

Timeline

Key dates

Commitment date: Sep 23, 2010

Last repayment (originally scheduled): Sep 23, 2011

Stakeholders

Organizations involved in projects and activities supported by financial and in-kind transfers from Chinese government and state-owned entities

Ultimate beneficial owners

At least 25% host country ownership

Funding agencies

State-owned Commercial Banks

Industrial and Commercial Bank of China (ICBC)

Cofinancing agencies

Private Sector

Crédit Agricole Corporate and Investment Bank (CACIB) (Crédit Agricole CIB) (Formerly Calyon) (Formerly Crédit Agricole Indosuez (CAI))
Sumitomo Mitsui Banking Corporation (SMBC)

State-owned Banks

Ghana International Bank plc

Receiving agencies

State-owned companies

Ghana Cocoa Board (COCOBOD)

Implementing agencies

State-owned companies

Ghana Cocoa Board (COCOBOD)

Guarantors

Government Agencies

Government of Ghana

Collateral providers

State-owned companies

Ghana Cocoa Board (COCOBOD)

Loan description

ICBC contribution to USD $1.5 billion syndicated receivables-backed trade finance facility to COCOBOD for its 2010/2011 crop season financing needs

Grant element•3.9419%Interest rate (t₀)•1.36281%Interest type•Variable Interest RateMaturity•1 years

Collateral

The facility (loan) was secured by the assignment of one or more sales contracts between COCOBOD and cocoa buyers. The cash proceeds from cocoa sales -- under the assigned sales contracts -- were to be paid into an offshore escrow collection account, which at all times was to equal to a fixed percentage (110%) of the amount outstanding under the facility (as a source of cash collateral). The borrower granted the lenders a charge over the offshore escrow collection account into which the proceeds payable under the assigned cocoa contracts were to be collected.

Narrative

Full Description

Project narrative

On September 23, 2010, a consortium of 36 financial institutions — including the Industrial and Commercial Bank of China (ICBC) — 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 2010/2011 crop season. The 36 participants in the loan syndicate included Credit Agricole CIB, Ghana International Bank, Industrial and Commercial Bank of China (ICBC), Standard Bank and SMBCE. The borrowing terms included a 1-year repayment period and an interest rate of LIBOR plus 90 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.

Staff comments

1. AidData has estimated the all-in interest rate by adding 0.90% to the average 6-month LIBOR rate in September 2010 (0.519%). 2. The individual contributions of the banks that participated in the lending syndicate are unknown. For the time being, AidData assumes equal contributions ($41,666,666) across all 36 members of the syndicate. 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.