Already, a team from the board, led by its Chief Executive Officer, Dr Stephen K. Opuni, is in Germany, where the arrangement for the loan will be sealed.Interest on this year’s loan is expected to be below two per cent due to the track record COCOBOD has attained in the syndication of funds to finance cocoa production in the country.

The Public Affairs Manager of the board, Mr Noah Amenyah, told the Daily Graphic in Accra that the board had successfully completed the repayment of the US$1.8 billion that was taken to finance cocoa productions in the ongoing cocoa season.

He explained that COCOBOD completed the repayment in August, this year, paving the way for it to sign for a fresh set of funds this week.Mr Amenyah said the board would be signing for US$1.8 billion although Parliament had given it the approval to raise US$2 billion.

The remaining US$200 million, he said, would be raised at a later date.

Interest on last year’s loan

Mr Amenyah said the repayment was done on both the principal and the interest, which was 1.19 per cent.This means that the board paid a total of US$2.4 billion on the syndicated facility that was taken in two tranches.

The first tranche of US$1.8 billion was taken in September last year after COCOBOD and the banks had completed the signing ceremony in France.The final tranche of US$200 million was taken in April this year in line with an earlier arrangement that was approved by Parliament in 2015.

Mr Amenyah said the second tranche of the funds was released after the banks were convinced that the COCOBOD’s operations were in line with agreed criteria.“Most of them visited our operations in the course of the year. Some of them went to inspect the cocoa roads, the nurseries, warehouses, farms and even the Cocoa Research Institute of Ghana (CRIG)”.

“It was after these visits and talking to the farmers that they were convinced that COCOBOD was on track and decided to release the second tranche,” he said.The visits were also part of efforts by the lenders to operationalise the know your customer (KYC) requirement in lending, which requires that financial institutions constantly interact with their borrowers to ensure that they are properly updated on how the funds are applied to help avoid risk of default.

Credible institution

Mr Amenyah said COCOBOD’s ability to  repay the loan had boosted its credibility with the banks. As a result, he said, the board was convinced that this year’s syndication would be successful.Globally, financial experts have long praised COCOBOD's syndication process as one of the best long-running commodity-backed deals that continues to attract interest from dozens of financial institutions.

The syndication process started in the 1992/3 cocoa season, when the board raised US$140 million from a group of banks to finance that season's cocoa production. Since then, the syndication process has become an annual affair that foreign lenders look forward to.

In last year’s deal, for instance, some 20 foreign banks participated, confirming the notion that COCOBOD is now a credible institution.