Announcement of One Million Seven Hundred Thousand US Dollars Supplemental Loan on February 15, 1973, for the Cameroon Oil Palm Project Approved on Kirch 19, 1969

INTERNATIONAL BANK FOR .• RECONSTRUCTION AND DEVELOPMENT 1818 H STREET', ·N.W., WASHINGT·ON D. C. 20433 TELE,.HONE: EXECUTIVE 3-8380 ---------------------------------------r JI Bank Press Release No. 73/9 Subject: $1.7 million supple•ntal loan February 15, 1973 · "tor the Cameroon oil pal.a project approved on Kirch 19, 1969 In 1969, the World Bank Group approved a $7.9 nd.llion loan to finance a project for the commercial development of palm oil, 11ainly to meet Cameroon's expanding domestic demand for edible rats in conjunction with tw.o French agencies, Fonds diJ.ide et de Coope- 1 ration (FAC) $1.8 million; and Caisse Centrale de Cooperation Eccnomique (CCCI) $1.8 million; and the Cameroon Government $2 .h million. · During project execution, considerable difficulties· were experienced, vh.,1ich called for a revision or said project. After revision in 1972, the total project c~t which is estimated at $19.0 million is $5.8 million higher than the estimated cost ot 1969, taking into account the CFA franc and dollar deva}uations and price increases. \ . ~ e Today the Bank Group announced a supplemental loan or $1.7 million to help finance the incremental cost of $5.8 million with th1) participation ·Of FAC,CCCE and the Govern~ ment through a grant~ a loan and an equity c~ptribution of $).8, $1.1 and $1.h million, respectivel.1'. . \ . , • '!be project covers nine years and consists of a six-year planting program or oil palms on the estates of Eseka. and Mbongo, totaling 21,000 acres, maintenance thereof until establishment, the·construction or an oil ·m:l.11 on each estate, and· the provision or roads, buildings and other infrastructure. At full development in 1981, it will generate about $1.5 million annuall;y in foreign exchange eai,iings on e~rts and save about $2.9 million annually in foreign exchange expendi ture.s. on imports or vegetabl~i oil. It would also provide fuller and more reJ11Unerative employment to about 600 worker fam:l.lies and 1,000 single workers previously engaged.in subsis~nce farming who will also benefit trom better housing, education and health services. · In addition to increasing the country's output of palm oil the project will pave the way,.for further agricultural ·developnent· in the forest areas or Cameroon through u planning of improved smallhdlder oil palm cultivation. The supplemental loan is JQade to Soc:iete ramerounaise de Paldleraies (SOCA.P.A.J.H), which is the new name of SOPAME to ~ch the ,,$7·.9 million loan was made available, vi.th the guarantee of the Un:t~ Republic or Cameroon; the terni or the loan is ot 1h :,ears, in- cluding five years of gn1c-e, and with an interest rate .or 7~ per annwa. '!'he consolidated Bank loan will be disb-q;r~1ed \~..:~: ·over the period 1968/69-1976/77. ';;' ~~ With the exception ·••pi' the Mbongo oil mill which is financed by PJ.C and CCCI, all ·goods and services are to be procu:red through intemational competitive bidding. Honver, SOCAPALM is allowed to grant a 15% margin or prefe;rence to domestic m&nuf'acturers in bid comparisons • ·· • The revised project is expected to. be comple.ted b;y June 30, 1978 • Chemical Bank, New York has·agreed to participate in the Bank loan for a total amount of $21S, 000. - 0 - 1 February 15, 1973 • TECHNICAL DATA. PROJEC?: Oil palm project United Republic of Cameroon TOTAL COST: $5.8 million (incremental cost) BANK FINANCING: $1. 7 million, ]::.\ years, five years of grace with interest ut' 7~% pet"annum. ,. O!BBR !IRiNCING: Fonds d'Aide et de Cooperation; Caia.. Centr&1e·de Cooperation Economique. IMPLEM!NTING ORGANIZATICE: Societe Camerounaise de Palmeraies (SOCAPALM) , • Boite Postale 691, Douala, Cameroon. PROJECT DESCRIPTim: Establishment of about 21,000 acres of oil palm, of . t-1hi_ch about 14 ,800acres at Mbongo estate and about 6,200 acres at Ea~ka estate; construction of a palm oil mill on each of the two estates with capacities of 20 tons/hour at Mbongo and 12 tons/hqur at Eseka, respectively; building of a warehouse and office at Douala; and provision on each estate of necessary roads, buildings and other infrastructure. PROCUREMENT: Vehicles and equipment, houses''and building materials, oil mills equipment, land clearing, seeds, fertilizers, etc. All goods . and services to be procured through intematimal competitive bidding except for one oil mill. CX>NSULTANTS, TECHNICAL ASSISTANCE: Provided by the Institut de Rocherchea pour lea Huiles et Oleagineux •. , ES~IMATED <X>MPLETIC6 IM.TE: June 30, 1978. •