COCOBOD secures $1.3 billion syndicated loan; first tranche expected by October 10

Chief Executive Officer of Ghana Cocoa Board (COCOBOD), Joseph Boahen Aidoo says the first tranche of the newly signed $1.3 billion syndicated loan facility which will cater for the purchase of cocoa beans for the 2020/2021 crop season should hit their accounts by October 10, 2020.

The agreement for the loan was signed in Accra on September 29, 2020, with the participation of 28 banks made up of 4 local and 24 international financial institutions.

The amount is to help COCOBOD facilitate the procurement of some 900,000 metric tons of cocoa beans.

This means that, effective October 1, 2020, COCOBOD through its Licensed Buying Companies will be paying GHS660 for every 64kg bag of cocoa from Ghanaian farmers in line with the increase in the farmgate price announced by government.

While addressing the stakeholders at the signing ceremony, Joseph Boahen Aidoo, assured that the proceeds from the loan will be used for the intended purpose to ensure all stakeholders in the cocoa value chain in Ghana especially the farmers are better off.

“A total of USD1.3 billion at a competitive interest rate plus libor of 1.75% Pre-Export Trade Finance Facility has been signed to finance cocoa purchases for the 2020/2021 crop season. The loan which is repayable in seven (7) calendar months is projected to help purchase about 900,000 metric tonnes of cocoa for the season.”

“I wish to also assure all stakeholders that the loan will be used solely for the purpose for which it has been contracted. In addition, I’d like to also assure our supportive funding institutions that, as we have done over the years, we will repay the loan on schedule,” he assured.

On his part, Hackman Owusu- Agyemang, Board Chairman of COCOBOD, reiterated the need for local players to take over the syndication process in the medium to long term.

“I venture to say personally that, eventually we should have to be able to do this thing by ourselves. Honestly, I believe that at the end of the day, what we have with the participating banks is a symbiotic relationship but as we move forward we must also look at the situation to see how best we can handle it ourselves.”

While acknowledging the challenging times, Minister of Food and Agriculture, Dr. Owusu Afriyie Akoto who addressed the gathering at the signing ceremony via zoom, added that the signing of the current deal goes to show the resolute confidence of relevant stakeholders in the prospects of Ghana’s cocoa sector.

Financial Institutions involved in the deal

Initial Mandated Lead Arrangers of the new loan include;

1. ABN AMRO BANK NIV
2. BANK OF CHINA LIMITED LONDON BRANCH
3. COOPERATIVE RABOBANK UA
4. DZ BANK AG DEUTSCHE ZENTRAL-ZENOSSENSCHA FTS BANK, FRANKFURT AM MAIN.
5. GHANA INTERNATIONAL BANK PLC
6. INDUSTRIAL AND COMMERCIAL BANK OF CHINA LIMITED, LONDON BRANCH
7. MUFG BANK LIMITED
8. NATIXIS
9. SOCIETE GENERALE
10. STANDARD CHARTED BANK

The four local banks that are participating in the deal include: Ecobank Ghana limited, Societe General Ghana Limited, ABSA Ghana Limited and Stanbic Bank Ghana Limited.