Skip to content
AidData logo

Overview

Bank of China contributes to $1.5 billion syndicated receivables-backed trade finance facility to COCOBOD for its 2021/2022 crop season financing needs (Linked to Record ID#92598)

Commitments (Constant USD, 2023)$49,400,444
Commitment Year•2021Country of Activity•GhanaDirect Recipient Country of Incorporation•GhanaSector•Agriculture, Forestry, FishingFlow Type•Loan

Status

Project lifecycle

Pipeline: Commitment

Pipeline: PledgePipeline: CommitmentImplementationCompletion

Timeline

Key dates

Commitment date
Sep 21, 2021
Last repayment (originally scheduled)
Apr 21, 2022

Geospatial footprint

Map overview

Visualizes the AidData-provided feature geometry for this project.

Loading map…

Ghanna Cocoa Board can be found at: https://www.openstreetmap.org/way/496492572

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

  • Bank of China (BOC)

Cofinancing agencies

Private Sector

  • Absa Ghana Limited
  • Coöperatieve Rabobank U.A. (Rabobank)
  • Ecobank Ghana
  • MUFG Bank, Ltd. (Formerly Bank of Tokyo-Mitsubishi UFJ, Ltd. (BTMU))
  • Natixis
  • Nedbank Ltd
  • Société General Ghana Limited
  • Standard Chartered Bank PLC

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 desecription

In 2021, Bank of China and ICBC contributions to $1.5 billion syndicated receivables-backed trade finance facility to COCOBOD for its 2021/2022 crop season financing needs, Ghana

Grant element•2.3598%Interest rate (t₀)•1.25338%Interest type•Variable Interest RateMaturity•0.5833 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 21, 2021, a consortium of 28 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 2021/2022 crop season. The amount is expected to be used to purchase some 950,000 tonnes of cocoa for the period. The 28 participants in the loan syndicate included Bank of China (Record ID#92597), Standard Charted Bank, Industrial and Commercial Bank of China (Record ID#92598), Coöperatieve Rabobank, MUFG Bank Ltd, Natixis, Nedbank Ltd, Ghana international Bank, EcoBank Ghana Limited, Standard Chartered Bank, Société General Ghana Limited and Absa Ghana Limited. The borrowing terms included a 7-month repayment period, an interest rate of LIBOR plus 110 basis points, a commitment fee of 0.62%, and an upfront fee of 1.25%. The loan was expected to be repaid in seven equal installments between February to August 2022. 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 1.1% to the average 6-month LIBOR rate in September 2021 (0.197%). 2. The individual contributions of the banks that participated in the lending syndicate are unknown. For the time being, AidData assumes equal contributions ($53,571,428) across all 28 members of the syndicate, which implies that the total financial commitment from Chinese state-owned banks was $107,142,856. 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. 4. 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). 5. AidData has assumed that the 1.25% flat (upfront) fee is functionally equivalent to a management fee.