November 11, 2019 / 7:09 PM / a month ago

Ghana to finalize $600 million cocoa loan package this week

FILE PHOTO: Cocoa beans are pictured next to a warehouse at the village of Atroni, near Sunyani, Ghana April 11, 2019. REUTERS/Ange Aboa

JOHANNESBURG (Reuters) - Ghana’s cocoa regulator will this week finalize a $600 million loan to finance new warehouses, rehabilitate plantations and support the processing sector, officials said on Monday.

Under the deal, the world’s No.2 cocoa producer Ghana sought $250 million from development finance institutions led by the African Development Bank (AfDB), while Credit Suisse Group AG (CSGN.S) was charged with lining up $350 million from commercial lenders.

“Cocobod has reached financial close. They will be tidying that up tomorrow. All the lawyers are going to be here tomorrow,” AfDB President Akinwumi Adesina told Reuters on the sidelines of its Africa Investment Forum in Johannesburg.

An official for the regulator, known as Cocobod, confirmed they planned to close the deal at the conference on Tuesday.

The rehabilitation program will carry out the replacement of aging cocoa trees and the destruction of plantations infected with swollen shoot disease. Other financing will help Cocobod offer short-term working capital support to local cocoa-processing companies.

Increased warehouse capacity will allow Ghana to store its cocoa beans longer without deterioration in quality.

Ghana and its neighbor Ivory Coast - the world’s top producer - have stepped up cooperation in the sector in recent years, aiming to exert greater influence over global cocoa prices LCCc2.

Ivory Coast has also voiced interest in seeking financial backing for reforms from the AfDB, whose board last month agreed to increase the Abidjan-based lender’s capital by 125% to $208 billion.

“With our capital increase at the bank, we have a lot more capital to support with. And we will be supporting (Ivory Coast) just the same way we’ve supported Ghana,” Adesina said.

Reporting by Joe Bavier; Editing by Lisa Shumaker

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