Cameroon - Second Highway Project : Credit 0429 - Credit Agreement - 2 - Conformed

CONFORMED COPY CREDIT NUMBER 429 CM Development Credit Agreement (Second Highway Project) BETWEEN UNITED REPUBLIC OF CAMEROON AND INTERNATIONAL DEVELOPMENT ASSOCIATION DATED SEPTEMBER 26, 1973 CONFORMED COPY CREDIT NUMBER 429 CM Development Credit Agreement (Second Highway Project) BETWEEN UNITED REPUBLIC OF CAMEROON AND INTERNATIONAL DEVELOPMENT ASSOCIATION DATED SEPTEMBER 26, 1973 DEVELOPMENT CREDIT AGREEMENT AGREEMENT, dated September 26, 1973, between UNITED REPUBLIC OF CAMEROON (hereinafter called the Borrower) and INTERNATIONAL DEVELOPMENT ASSOCIATION (hereinafter called the Association). WHEREAS (A) The Borrower has requested the Association to assist in the financing of the Project described in Schedule I to the Loan Agreement by extending the Credit as hereinafter provided; (B) The Borrower has also requested the Bank to provide additional assistance towards the financing of the Project and by an agreement of even date herewith between the Borrower and the Bank (hereinafter called the Loan Agreement) the Bank is agreeing to provide such assistance in an aggregate principal amount equivalent to twenty-four million dollars ($24,000,000) (hereinafter called the Loan); (C) The Borrower and the Association intend, to the extent practicable, that the proceeds of the Credit provided for in this Agreement be disbursed on account of expenditures on the Project before disbursements of the proceeds of the Loan provided for in the Loan Agreement are made; WHEREAS the Association has agreed, on the basis inter alia of the foregoing, to extend the Credit to the Borrower upon the terms and conditions hereinafter set forth; NOW THEREFORE the parties hereto hereby agree as follows: ARTICLE I General Conditions; Definitions Section 1.01. The parties to this Agreement accept all the provisions of the General Conditions Applicable to Development Credit Agreements of the Association, dated January 31, 1969, with the same force and effect as if they were fully set forth herein, subject, however, to the following modifications thereof (said General Conditions Applicable to Development Credit Agreements of the Association, as so modified, being hereinafter called the General Conditions): 4 (a) Section 5.01 is deleted; (b) Section 6.02(h) is deleted and Section 6.02(i) becomes 6.02(h); (c) Section 2.01(9) is deleted and the following is substituted therefor: "9. The term 'Project' means the project or projects or program or programs for which the Credit is granted, as described in the Loan Agreement and as the description thereof shall be amended from time to time by agreement between the Borrower, the Bank and the Association." (d) Section 6.02(b) is deleted and the following is substituted therefor: "(b) The Borrower shall have failed to perform any other obligation under the Loan Agreement, the Bonds or the Development Credit Agreement (as such term is defined in the Loan Agreement)." (e) Section 7.01(c) is amended to read as follows: "(c) A default shall occur in the performance of any other obligation on the part of the Borrower under the Loan Agreement, the Bonds or the Development Credit Agreement (as such term is defined in the Loan Agreement), and such default shall continue for a period of 60 days after notice thereof shall have been given by the Bank or the Association to the Borrower." Section 1.02. Wherever used in this Agreement, unless the context otherwise requires, the several terms defined in the General Conditions have the respective meanings therein set forth and the following additional terms have the following meanings: (a) the term "Loan Agreement" means the agreement of even date herewith between the Borrower and the Bank for the purpose of the Project, as such agreement may be amended from time to time; and such term includes the General Conditions Applicable to Loan and Guarantee Agreements of the Bank, dated January 31, 1969, as made applicable to such agreement, all agreements supplemental to the Loan Agreement and all schedules to the Loan Agreement; (b) the term "Loan" means the loan provided for in the Loan Agreement; (c) the term "Loan Account" means the account established pursuant to Section 2.02 of the Loan Agreement; and 5 (d) the several terms defined in the Loan Agreement have the respective meanings therein set forth. ARTICLE II The Credit Section 2.01. The Association agrees to lend to the Borrower, on the terms and conditions in the Development Credit Agreement set forth or referred to, an amount in various currencies equivalent to twenty-four million dollars ($24,000,000). Section 2.02. The amount of the Credit may be withdrawn from the Credit Account in accordance with the provisions of Schedule I to this Agreement, as such Schedule shall be amended from time to time, for expenditures made (or, if the Association shall so agree, to be made) in respect of the reasonable cost of goods and services required for the Proj_ct and to be financed under the Development Credit Agreement; provided, however, that, except as the Association shall otherwise agree, no withdrawal shall be made on account of expenditures in the territories of any country which is not a member of the Bank (other than Switzerland) or for goods produced in, or services supplied from, such territories. Section 2.03. Except as the Association shall otherwise agree, the goods and services (other than services of consultants) required for the Project and to be financed out of the proceeds of the Credit, shall be procured on the basis of international competition under procedures consistent with the Guidelines for Procurement under World Bank Loans and IDA Credits, published by the Bank in April 1972, as revised in October 1972, and in accordance with, and subject to, the provisions set forth in Schedule 3 to the Loan Agreement. Section 2.04. The Closing Date shall be June 30, 1977 or such other date as shall be agreed between the Borrower and the Association. Section 2.05. The Borrower shall pay to the Association a service charge at the rate of three-fourths of one per cent (3/4 of 1%) per annum on the principal amount of the Credit withdrawn and outstanding from time to time. Section 2.06. Service charges shall be payable semi-annually on April 15 and October 15 in each year. Section 2.07. The Borrower shall repay the principal amount of the Credit in semi-annual installments payable on each April 15 and October 15 commencing 6 October 15, 1983, and ending April 15, 2023, each installment to and including the installment payable on April 15, 1993 to be one-half of one per cent (1/2 of 1%) of such principal amount, and each installment thereafter to be one and one-half per cent (1-1/2%) of such principal amount. Section 2.08. The currency of the United States of America is hereby specified for the purposes of Section 4.02 of the General Conditions. ARTICLE III Execution of the Project; Consultation, Information and Inspection Section 3.01. Articles III and V and Sections 4.02 through 4.09 inclusively of the Loan Agreement and Schedules 1, 3 and 4 thereto are hereby incorporated into this Agreement with the same force and effect as if they were fully set forth herein; provided, however, that (i) all references to the Bank in such Articles, Sections or Schedules or in any of them shall be deemed to be references to the Association, and (ii) all references to the Loan in such Articles, Sections and Schedules or in any of them shall be deemed to be references to the Credit. Section 3.02. So long as any part of the Loan provided for under the Loan Agreement or the Bonds shall remain outstanding and unpaid, all action taken, including approvals given, by the Bank pursuant to the Articles of the Loan Agreement enumerated in Section 3.01 of this Agreement, or of Section 2.03 of the Loan Agreement, shall be deemed to be taken or given in the name and on behalf of both the Bank and the Association; and all information furnished by the Borrower to the Bank pursuant to the provisions of such Articles, shall be deemed to be furnished to both the Bank and the Association. ARTICLE IV Taxes and Restrictions Section 4.01. The principal of, and service charges on, the Credit shall be paid without deduction for, and free from, any taxes imposed under the laws of the Borrower or laws in effect in its territories. Section 4.02. The Development Credit Agreement shall be free from any taxes on or in connection with the execution, delivery or registration thereof, imposed under the laws of the Borrower or laws in effect in its territories. 7 Section 4.03. The payment of the principal of, and service charges on, the Credit shall be free from all restrictions, regulations, controls and moratoria of any nature imposed under the laws of the Borrower or laws in effect in its territories. ARTICLE V Remedies of the Association Section 5.01. If any event specified in Section 7.01 of the General Conditions shall occur and shall continue for the period, if any, therein set forth, then at any subsequent time during the continuance thereof, the Association, at its option, may by notice to the Borrower declare the principal of the Credit then outstanding to be due and payable immediately together with the service charges thereon, and upon any such declaration such principal and service charges shall become due and payable immediately, anything to the contrary in the Development Credit Agreement notwithstanding. ARTICLE VI Effective Date; Termination Section 6.01. The following event is specified as an additional condition to the effectiveness of the Development Credit Agreement within the meaning of Section 10.01(b) of the General Conditions, namely, that all the conditions precedent to the effectiveness of the Loan Agreement shall have been fulfilled subject only to the effectiveness of this Agreement. Section 6.02. The date December 27, 1973 is hereby specified for the purposes of Section 10.04 of the General Conditions. Section 6.03. The obligations of the Borrower under Sections 4.02 through 4.09 of the Loan Agreement incorporated by reference in Article III of this Agreement shall cease and determine on the date on which the Development Credit Agreement shall terminate or on a date 25 years after the date of this Agreement, whichever shall be the earlier. ARTICLE VII Representative of the Borrower; Addresses Section 7.01. The Ministre du Plan et de 1' Amenagement du Territoire of the Borrower is designated as representative of the Borrower for the purposes of Section 9.03 of the General Conditions. 8 Section 7.02. The following addresses are specified for the purposes of Section 9.01 of the General Conditions: For the Borrower: Ministre du Plan et de l'Amdnagement du Territoire Yaoundd United Republic of Cameroon Cable address: MINPAT Yaound6, Cameroon For the Association: International Development Association 1818 H Street, N.W. Washington, D.C. 20433 United States of America Cable address: INDEVAS Washington, D.C. IN WITNESS WHEREOF, the parties hereto, acting through their representatives thereunto duly authorized, have caused this Agreement to be signed in their respective names and to be delivered in the District of Columbia, United States of America as of the day and year first above written. UNITED REPUBLIC OF CAMEROON By /s / Franqois-Xavier Tchoungui Authorized Representative INTERNATIONAL DEVELOPMENT ASSOCIATION By /s / Wilfried P. Thalwitz Director, Regional Projects Department Western Africa Regional Office 9 SCHEDULE 1 Withdrawal of the Proceeds of the Credit and of the Loan 1. The table below sets forth the Categories of items to be financed out of the proceeds of the Credit and of the Loan, the allocation of amounts of such proceeds to each Category and the percentage of eligible expenditures so to be financed in each Category: Amount of the Credit and of the Loan Allocated % of (Expressed in Expenditures Category Dollar Equivalent) to be Financed I. Civil Works in- 34,000,000 68% of total ex- cluded in Part penditures (rep- A(1) of the resenting the Project estimated for- eign expenditure component) II. Consultants' 3,700,000 100% of foreign Services in- expenditures cluded in Part A(2), B, C, D and E of the Project III. Unallocated 10,300,000 TOTAL 48,000,000 2. For the purposes of this Schedule: (a) the term "foreign expenditures" means expenditures for goods produced in, or services supplied from, the territories, and in the currency, of any country other than the Borrower; provided, however, that if the currency of the Borrower is also that of another country in the territories of which goods are produced or from the territories of which services are supplied, expenditures in such currency for such goods or services shall be deemed to be "foreign expenditures; 10 (b) the term "local expenditures" means expenditures in the currency of the Borrower, or for goods produced in, or services supplied from, the territories of the Borrower; and (c) the term "total expenditures" means the aggregate of foreign and local expenditures. 3. Notwithstanding the provisions of paragraph I above, no withdrawals shall be made in respect of: (a) expenditures prior to the date of this Agreement; and (b) payments for taxes imposed under the laws of the Borrower or laws in effect in its territories on goods or services, or on the importation, manufacture, pvocurement or supply thereof. To the extent that the amount represented by the percentage set forth in the third column of the table in paragraph I above in respect of any Category would exceed the amount payable net of all such taxes, such percentage shall be reduced to ensure that no proceeds of the Credit or of the Loan will be withdrawn on account of payments for such taxes. In addition, except as the Borrower, the Association and the Bank shall otherwise agree, and until all amounts of the Credit shall have been withdrawn or committed, no withdrawals shall be made from the Loan Account under commitments entered into by the Bank pursuant to Section 5.02 of the General Conditions referred to in Section 1.01 of the Loan Agreement. 4. Notwithstanding the allocation of an amount of the proceeds of the Credit and of the Loan set forth in the second column of the table in paragraph I above: (a) if the estimate of the expenditures under any Category shall decrease, the amount of the proceeds of the Credit and of the Loan then allocated to such Category and no longer required therefor will be reallocated by the Association and by the Bank or, after full withdrawal of all amounts of the Credit, by the Bank, by increasing correspondingly the unallocated amount of the proceeds of the Credit and of the Loan; (b) if the estimate of the expenditures under any Category shall increase, the percentage set forth in the third column of the table in paragraph I above in respect of such expenditures shall be applied to the amount of such increase, and a corresponding amount will be allocated by the Association and by the Bank or, after full withdrawal of all amounts of the Credit, by the Bank, at the request of the Borrower, to such Category from the unallocated amount of the proceeds 11 of the Credit and of the Loan, subject, however, to the requirements for contingencies, as determined by the Association and by the Bank or, after full withdrawal of all amounts of the Credit, by the Bank, in respect of any other expenditures; and (c) if the Association and the Bank shall have reasonably determined that the procurement of any item in any Category is inconsistent with the procedures set forth or referred to in Section 2.03 of this Agreement and of the Loan Agreement, no expenditures for such item shall be financed out of the proceeds of the Credit or, after full withdrawal of all amounts of the Credit, of the proceeds of the Loan and the Association and the Bank may, without in any way restricting or limiting any other right, power or remedy of the Association and the Bank under the Development Credit Agreement and the Loan Agreement, by notice to the Borrower, cancel such amount of the Credit and of the Loan as in the Association's and the Bank's reasonable opinion, represents the amount of such expenditures which would otherwise have been eligible for financing out of the proceeds of the Credit or, after full withdrawal of all amounts of the Credit, of the proceeds of the Loan. 5. Notwithstanding the percentages set forth in the third column of the table set out in paragraph I above, if the estimate of total expenditures under Category I shall increase and no proceeds of the Credit and of the Loan are available for reallocation to such Category, the Association and the Bank or, after full withdrawal of all amounts of the Credit, the Bank, may, by notice to the Borrower, adjust the percentage then applicable to such expenditures in order that further withdrawals under such Category may continue until all expenditures thereunder shall have been made. 01^ A1 INTERNATIONAL BANK FOR WORLD BANK RECONSTRUCTION AND DEVELOPMENT 911 l.1, IDA ' INTERNATIONAL DEVELOPMENT ASSOCIATION 1818 H STREET, N W WASHINGTON D.C. 20433 TELEPHONE EXECUTIVE 3-6360 Bank Press Release No. 73/50 Subject: $24.0 million loan and IDA Press Release No. 73/65 $24.0 million credit to the July 5, 1973. United Republic of Cameroon for a highway project. The World Bank and its affiliate, the International Development Association (IDA), are together providing $48 million to help finance a second highway project in the United Republic of Cameroon. The country's location on the Gulf of Guinea, at the junction of West and Equa- torial Africa, makes it an important gateway for its landlocked neighbors; Chad, and to a lesser extent, the Central African Republic. The distances between Cameroon's principal agricultural areas and the sea are great. Given these distances and the country's dependence on exports and imports, low- cost transportation is a prerequisite to economic growth. During the last ten years major investments have been made in transportation, all designed to reduce transport costs, open up new areas for development especially in the remote North, improve tran- sit services for its landlocked neighbors, and integrate the country. In 1970, in order to assist the Government in meeting these objectives, the World Bank and IDA helped finance the improvement of the N'Gaoundere-Garoua road section of the Transcameroon route, a major interregional and international link about 1,240 miles long which connects the heavily populated and potentially productive northern provinces with the rest of the country and the sea, particularly with Yaounde, the capital, and Douala, the main port. It also serves the southwestern part of land- locked Chad. To complete the Transcameroon route system involves expanding the port of Douala, increasing the capacity of the railway link from Douala to Yaounde, extending this railway to N'Gaoundere, and providing a better road from Garoua to Mora. The present project will contribute to meeting this objective by reconstructing the last low-standard road section of the Transcameroon route. Two sections of the heavily traveled Douala-Bafoussam-Foumban axis will also be reconstructed. Feasi- bility and detailed engineering studies were partly financed through the first project. The present project also includes financing of a feasibility study of forestry feeder roads and studies and technical assistance for the improvement of the highway maintenance system, improvement of transport planning and coordination and formulation of forestry policy and legislation. The United Nations Develop- ment Programme is providing technical assistance. The Bank loan and IDA credit, of $24 million each, will be made to the United Republic of Cameroon. The Bank loan will be for a term of 25 years, including a five-year grace period, with interest at 714. The IDA credit will be for a term of 50 years, including 10 years of grace; it will be interest free but a service charge of 3/4 of 1% will be made to cover administrative costs. -0- July 5, 1973 TECHNICAL DATA PROJECT Second highway project COUNTRY United Republic of Cameroon TOTAL COST: $71.0 million equivalent BANK FINANCING: $24.0 million, 25 years, 5 years of grace, annual interest of 7k%. IDA FINANCING: $24.0 million, 50 years, 10 years of grace, interest free except for 3/4 of 1% service charge to meet IDA's administra- tive expenses. OTHER FINANCING: Government of Cameroon; United Nations Development Programme. IMPLEMENTING ORGANIZATION: Ministere du Plan et de l'Amenagement du Territoire, Yaounde. Republique Unie du Cameroun, Cable Address: MINPAT, Yaounde". PROJECT DESCRIPTION: Reconstruction of three road sections, totaling about 300 miles: Garoua-Mora --160 miles; Douala-Pont du N'kam (Kekem) -- 110 miles; and Pont du Noun (Bafoussam) - Foumban -- 30 miles. Consulting services for: supervision of the above works; a study to improve highway maintenance and to define a betterment program for secondary and feeder roads; feasi- bility study for forestry feeder roads; technical assistance for torestry policies' formulation and for improving transport planning and coordination, and studies of special problems in that area. PROCUREMENT: Construction contracts to be awarded on basis of international com- petitive bidding. CONSULTANTS: To be selected. ESTIMATED COMPLETION DATE: June 1977. - 0-