We're on course to secure US$1.3bn loan despite coronavirus - COCOBOD

The Chief Executive Officer of the Ghana Cocoa Board (COCOBOD), Joseph Boahen Aidoo, has assured of his outfit resolves to secure its US$1.3 billion syndicated loan come Septemeber.

According to him, despite the COVID-19 pandemic, reports that the COCOBOD could not raise its planned amount from the banks were inaccurate adding that the process is on a steady move, with everything on schedule.

“It is important that I inform you that COCOBOD has paid its 2019/2020 loan facility in this present month of June 2020, three months ahead of schedule, even in this time of COVID-19. And so with respect to the US$1. 3 billion syndicated loan, COCOBOD issued Requests for Proposals (RFP) in February 2020 to international banks to raise the funds for the 2020/2021 cocoa purchases.”

Mr Aidoo was speaking at the launch of the US$600 million syndicated loan facility it signed with a consortium of development finance institutions to enhance productivity in Ghana's cocoa sector.

Explaining further, he added that, “On the 12th of June, 2020, the financial institutions, including COCOBOD’s traditional banks, submitted their proposals. Evaluation of the proposals was held on 18th June, 2020 by an in-house committee chaired by the chief executive, with representatives from the Ministry of Food and Agriculture, the Ministry of Finance and the Bank of Ghana.”

Joseph Boahen Aidoo, in his address, also announced that per the normal practice, COCOBOD was currently negotiating the terms of the proposals with the banks.

According to him, “Once the terms are finalised, all due processes will be followed through to their logical conclusion, up to the signing of the facility which is expected in September 2020.”

On the US$600 million received in November last year, the COCOBOD CEO noted that the board received the first tranche of US$200 million out of the stipulated amount it signed with a consortium of development finance institutions.

He said the loan would be beneficial to COCOBOD in terms of strengthening the cocoa value chain, help alleviate poverty by increasing productivity as well as ensure a progressive cocoa consumption environment.

“I must put on record that with our own resources, significant progress has been made in our collective resolve to implement various Productivity Enhancement Programmes (PEPs) to increase yield per hectare to at least 1,000 kilogrammes.

“For instance, the 2020 Mass Pruning Exercise which began two months ago has been excellent.

I am happy to indicate that we have achieved 100 per cent coverage of farm area, giving more prospects for higher yields,” Mr Aidoo stated.

Background

In November 2019, COCOBOD signed a $600-million loan agreement with some development banks. They included African Development Bank (AfDB), the Development Bank of Southern Africa, the Japan International Cooperation Agency (JICA), and Casa Depositi e Prestiti Spa.

The rest were the Credit Suisse AG and the Industrial Commercial Bank of China.

AfDB acted as the mandated lead arranger with a tranche of $250 million, Credit Suisse arranged the commercial tranche of up to $350 million, with the Industrial and Commercial Bank of China (ICBC) acting as a joint underwriter.