The African Development Bank (AfDB), Credit Suisse AG, the Industrial and Commercial Bank of China Limited and Ghana Cocoa Board (COCOBOD), on Tuesday signed a $600 million syndicated receivables-backed term loan to boost cocoa productivity in Ghana, the world’s second-largest cocoa producer.
Nigerian cocoa farmers and other farmers of the cash crop across West Africa would also be assisted by the bank to develop the cocoa value chain, the AfDB President, Dr Akinwumi Adesina, said in Johannesburg after signing the facility.
Ghanaian President, Nana Addo Dankwa Akufo-Addo, Dr Adesina, senior officials from Credit Suisse and ICBC, oversaw the signing of the facility, at a ceremony held on the second day of the 2019 Africa Investment Forum, Daily Trust reports.
The multi-million dollar agreement is a milestone for the bank-convened Africa Investment Forum, a transactional platform dedicated to transforming the continent’s investment and development agenda, which kicked off in Sandton City, Johannesburg on Monday.
The COCOBOD transaction was launched at the Africa Investment Forum in 2018, and a year later, the signing is a demonstration of the Forum’s ability to raise much needed financing, including from international commercial financiers, for projects in Africa.
Prior to the agreement, COCOBOD did not have access to long-term debt capital.
At a press conference following the signing, President Akufo-Addo said the agreement would help to ensure higher incomes for Ghana’s cocoa farmers.
“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,” Akufo Addo said. “We see this agreement as a turning point and…to what is possible on this continent.”
The Bank, as Original DFI Lender and Initial Mandated Lead Arranger, is partnering with Credit Suisse as Original Commercial Lender, Global Commercial Coordinator, Co-Mandated Lead Arranger.
Credit Suisse is also acting as Joint Commercial Underwriter and Bookrunner to structure and fund a dual-tranche facility comprising a $250 million, 7-year DFI tranche with the Bank, as well as a $350 million 5-year commercial tranche.
The Industrial and Commercial Bank of China Limited, London Branch joined as an Original Commercial Lender, Co-Mandated Lead Arranger and Joint Commercial Underwriter and Bookrunner ahead of syndication.
Syndication of the facility is underway, according to AfDB officials.
Making sure that Africa gets to the top of the value chain is one of the African Development’s Bank’s top priorities, President Adesina said, adding that Africa could become a global hub for cocoa and cocoa-based products.
“All cocoa producing countries will get similar support (from the Bank). Ghana is bankable, cocoa is bankable and of course Africa is bankable,” Adesina said.
Signing for Credit Suisse, Madthav Patki said the “landmark” transaction would facilitate future long-term investment in the Ghanaian cocoa sector.
“This is a positive contribution to a key sector of Ghana’s economy. “It is a moment of tremendous pride…This is what the Africa Investment Forum is all about,” Patki said.
He also commended the Bank’s signature expertise in financial instruments, that enabled them to leverage financing for the deal.
The Africa Investment Forum, an initiative of the African Development Bank is an innovative, multi-stakeholder transactional marketplace, dedicated to raising capital, advancing projects to bankable stage, and accelerating financial closure of deals.
Ghana’s cocoa sector employs some 800,000 rural families and produces crops worth about $2 billion in foreign exchange annually.
Meanwhile, COCOBOD is a fully state-owned company solely responsible for Ghana’s cocoa industry, controlling the purchase, marketing and export of all cocoa beans produced in the country.
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