As the original DFI lender, AfDB has arranged the loan to Ghana Cocoa Board, with Credit Suisse and the Industrial and Commercial Bank of China, acting as commercial lenders
Image: AfDB, Credit Suisse, the Industrial and Commercial Bank of China and Ghana President at the signing ceremony. Photo: Courtesy of African Development Bank.
The African Development Bank (AfDB), Credit Suisse and the Industrial and Commercial Bank of China have inked an agreement to provide Ghana Cocoa Board (COCOBOD) with a loan of $600m to boost cocoa production in the country.
Before the agreement, COCOBOD did not have access to long-term debt capital. Last year, the COCOBOD transaction was launched at the Africa Investment Forum and a year later, the agreement has been signed, which shows the Forum’s ability to raise financing from international commercial financiers for African projects.
The loan will help Ghana increase cocoa productivity and warehousing capability
The loan will be used by COCOBOD to raise cocoa yields per hectare and increase the country’s overall production. It will also include financial interventions to increase cocoa plant fertility, improving irrigation systems, rehabilitating aged and disease-infected farms.
The funding will also help in increasing warehouse capacity and provide support to cocoa-processing companies in the country.
AfDB acted as the original development finance institution (DFI) lender and initially mandated lead arranger. Credit Suisse acted as the original commercial lender and has provided $250m comprising dual-tranche facility, seven-year DFI tranche with the bank, along with $350m in the five-year commercial tranche.
The Industrial and Commercial Bank of China’s London branch joined as one of the original commercial lenders.
Ghanaian President Nana Akufo-Addo said: “It was critical that we find a mechanism for scaling up the value chain for our farmers and that is where the Bank came in.
“We see this agreement as a turning point and…to what is possible on this continent.”
African Development president Akinwumi Adesina said. “All cocoa producing countries will get similar support (from the Bank). Ghana is bankable, cocoa is bankable and of course Africa is bankable.”
It is estimated that about 800,000 rural families are employed in the cocoa sector in Ghana, producing crops worth $2bn in foreign exchange annually.
As a fully state-owned company, COCOBOD is solely responsible for the country’s cocoa industry, controlling the purchase, marketing and export of all cocoa beans produced in the country.