Published: May 2, 2019
Cocobod signs first sustainability-linked syndicated loan in Africa
A three year, US$300mn E&S transaction provides a financial incentive to improve environmental and social practices across the Ghanaian cocoa industry.
On March 19th, Ghana Cocoa Board (otherwise known as Cocobod) signed a three-year US$300mn syndicated loan, which will be used to refinance cocoa bills. Notably, the loan margin is linked to Cocobod’s performance on three environmental and social (E&S) objectives.
These objectives are: providing environmentally friendly cocoa production; increasing sensitivity to child labour; and empowering women. The more Cocobod achieves within these areas, the lower the margins will be.
Societe Generale acted as bookrunner and E&S coordinator on the deal. As Emmanuel Chesneau, global head of trade commodity finance at Societe Generale Corporate & Investment Banking, tells EMEA Finance, this was a landmark transaction not just for Cocobod, but also for Ghana and indeed for Africa.
“This transaction is very important as it is the first syndicated, sustainability-linked transaction in favour of an African borrower,” he says. “It places Ghana in the spotlight and marks a precedent that will hopefully create incentives for other countries and companies to follow the path.”