Cameroon - Niete Rubber Estate Project : Credit 0574 - Credit Agreement - Conformed

CONFORMED COPY CREDIT NUMBER 574 CM Development Credit Agreement (Nitd Rubber Estate Project) BETWEEN UNITED REPUBLIC OF CAMEROON AND INTERNATIONAL DEVELOPMENT ASSOCIATION DATED JULY 30, 1975 CONFORMED COPY CREDIT NUMBER 574 CM Development Credit Agreement (Nitd Rubber Estate Project) BETWEEN UNITED REPUBLIC OF CAMEROON AND INTERNATIONAL DEVELOPMENT ASSOCIATION DATED JULY 30, 1975 DEVELOPMENT CREDIT AGREEMENT AGREEMENT, dated July 30, 1975, 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 2 to this Agreement by extending the Credit as hereinafter provided; (B) The Borrower intends to contract from the Caisse Centrale de Cooperation Econoinique (hereinafter called Caisse Centrale), an agency of the Republic of France, a loan (hereinafter called the Caisse Centrale Loan) in an aggregate principal amount of twenty million French francs (FF20,000,000) to assist in financing sych Project, on the terms and conditions set forth in agreements between Caisse Centrale and the Borrower (hereinafter called the Caisse Centrale Loan Agreement); (C) The Project with the exception of its Part G will be carried out by Socidtd H6v&a-Cameroun (hereinafter called HEVECAM) with the Borrower's assistance and, as part of such assistance, the Borrower will make available to HEVECAM a portion of the proceeds of the Credit as hereinafter provided, and will also make available to HEVECAM the proceeds of the Caisse Centrale Loan; and (D) The Association is willing to make the Credit available upon the terms and conditions set forth hereinafter and in a project agreement of even date herewith between the Association and HEVECAM; 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 March 15, 1974, with the same force and effect as if they were fully set forth herein (said General Conditions Applicable to Development Credit Agreements of the Association being hereinafter called the General Conditions). 4 Section 1.02. Wherever us.ed 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) "HEVECAM" means Socidtd Hv&i-Cameroun, a societ6 de dfveloppement of the Borrower, established and operating pursuant to Law No. 68/LF/9 of June 11, 1968, Decree No. 75/284 bis of April 30, 1975, and Decree No. 75/346 of May 23, 1975; (b) "Project Agreement" means the agreement between the Association and HEVECAM of even date herewith, as the same may be amended from time to time, and such term includes all schedules to the Project Agreement; (c) "Project Financing Agreement" means the agreement to be entered into between the Borrower and HEVECAM pursuant to Section 3.01(c) of this Agreement, as the same may be amended from time to time, and such term includes all schedules to the Project Financing Agreement; (d) "Management Services and Technical Assistance Contract" means any agreement concluded between HEVECAM and another party or parties providing for management services and technical assistance on terms and conditions satisfactory to the A ssociation and includes the Convention dated May 23, 1975 between HEVECAM on the one hand and on the other hand the Socite Africaine Forestidre et Agricole-Cameroun (hereinafter called SAFACAM), a company established and operating under the laws of the Borrower with its sige social at Yaounde; (e) "Francs CFA" and "CFAF" mean francs in the currency of the Borrower; and (f) "French francs" and "FF" mean francs in the currency of the Republic of France. 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 sixteen million dollars ($16,000,000). 5 Section 2.02. The amount of the Credit may be withdrawn from the Credit Account in accordance with the provisions of Schedule 1 to this Agreement, as such Schedule may 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 Project and to be financed out of the proceeds of the Credit. Section 2.03. Except as the Association shall otherwise agree, contracts for the purchase of goods or for the carrying out of works or services (other than consultants' services) for the Project shall be awarded in accordance with the provisions set forth or referred to in Section 2.03 of the Project Agreement. Section 2.04. The Closing Date shall be June 30, 1981 or such later date as the Association shall establish. The Association shall promptly notify the Borrower of such later date. 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 sh'all be payable semi-annually on April 1 and October 1 in each year. Section 2.07. The Borrower shall repay the principal amount of the Credit in semi-annual installments payable on each April 1 and October 1 commencing October 1, 1985 and ending April 1, 2025, each installment to and including the installment payable on April 1, 1995 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. Section 2.09. Except as the Borrower and the Association shall otherwise agree, if the Borrower shall repay in advance of maturity any part of its indebtedness under the Caisse Centrale Loan Agreement, the Borrower shall simultaneously repay a proportionate amount of the Credit then outstanding. All the provisions of the General Conditions relating to repayment in advance of maturity shall be applicable to any repayment by the Borrower in accordance with this Section. 6 ARTICLE III Execution of the Project Section 3.01. (a) The Borrower shall carry out Part G of the Project, and shall cause HEVECAM to carry out Parts A through F of the Project, with due diligence and efficiency and in conformity with appropriate administrative, engineering and planning practices, and shall provide, promptly as needed, the funds, facilities, services and other resources required for the purpose. (b) Without any limitation or restriction upon any of its other obligations under the Development Credit Agreement, the Borrower shall cause HEVECAM to perform in accordance with the provisions of the Project Agreement and the Project Financing Agreement all the obligations therein set forth, shall take and cause to be taken all action, including the provision of funds, facilities, services and other resources, necessary or appropriate to enable HEVECAM to perform such obligations, and shall not take or permit to be taken any action which would prevent or interfere with such performance. (c) The Borrower shall make the portion of the proceeds of the Credit and the Caisse Centrale Loan required for the execution of Parts A through F of the Project available to HEVECAM under a Project Financing Agreement to be entered into between the Borrower and HEVECAM on terms and conditions satisfactory to the Association. (d) The Borrower shall exercise its rights tinder the Project Financing Agreement in such manner as to protect the interests of the Borrower and the Association and to accomplish the purposes of the Credit, and except as the Association shall otherwise agree the Borrower shall not assign, amend, abrogate or waive the Project Financing Agreement or any provision thereof. (e) In order to ensure that adequate working capital shall be available to HEVECAM, the Borrower shall take all action necessary on its part to enable HEVECAM to dispose at all times of a cash and bank balance, including overdraft facilities guaranteed by the Borrower, to cover HEVECAM's expenditures during the four-month period following, but in any event not less than CFAF300,000,000. (f) Without any limitation or restriction upon any of its obligations under paragraph (a) of this Section, the Borrower shall provide HEVECAM, or cause HEVECAM to be provided, with the funds, services and other resources necessary to ensure that the plantings included in Part A of the Project are brought into, and maintained in, production and adequate processing facilities are installed therefor. 7 Section 3.02. The Borrower shall make or cause to be made available to HEVECAM, promptly as needed, all facilities and title to and rights in respect of land required for the carrying out and operation of the Project, free from all restrictions, encumbrances or liabilities on the use thereof. Section 3.03. The Borrower shall make arrangements satisfactory to the Association to provide the schools included in the Project with (i) qualified teachers in such numbers as shall be necessary for their efficient operation, and (ii) the funds necessary for the efficient operation and maintenance of the said schools and for the payment of salaries to the said teachers. Section 3.04. The Borrower shall: (i) not later than December 31, 1976 or such other later date as shall be agreed with the Association, take all action necessary to improve the roads and bridges between Douala and Kribi to allow year-round traffic between the said cities, and (ii) grant permission for the use of the bridge over the Sanaga River by heavy trucks. Section 3.05. The Borrower shall: (a) prepare, in consultation with the Association, the master plan for the development of the Kribi area included in Part G of the Project; and (b) (i) carry out a study of the transportation and other infrastructure long-term needs for the development of the Kribi area, in particular of the roles to be played by its harbors, inter alia, the Douala and Kribi harbors, and (ii) furnish to the Association, not later than December 31, 1978 or such other later date as shall be agreed with the Association, the recommendations made by the said study for an exchange of views thereon. Section 3.06. The Borrower shall ensure that all goods imported by HEVECAM for the Project will be exempt from all import duties levied by the Borrower including, without limitation, the Common External Tariff, Customs Import Duties, Turnover Tax and Complementary Tax. ARTICLE IV Remedies of the Association Section 4.01. For the purposes of Section 6.02 of the General Conditions the following additional events are specified pursuant to paragraph (h) thereof: (a) HEVECAM shall have failed to perform any covenant, agreement or obligation of HEVECAM under the Project Agreement. 8 (b) An extraordinary situation shall have arisen which shall make it improbable that HEVECAM will be able to perform its obligations under the Project Agreement or Project Financing Agreement. (c) Decree No. 75/284 of the Borrower shall have been amended, suspended, abrogated, repealed or waived without the prior approval of the Association. (d) The Borrower or any other authority having jurisdiction shall have taken any action for the dissolution or disestablishment of HEVECAM or for the suspension of its operations. (e) The Management Service and Technical Assistance Contract shall have been in any material respect terminated, amended, suspended, waived or designed without the prior approval of the Association. (f) (i) Subject to subparagraph (ii) of this paragraph: (A) The right of the Borrower to withdraw the proceeds of the Caisse Centrale Loan made to the Borrower for the financing of the Project shall have been suspended, cancelled or terminated in whole or in part, pursuant to the terms of the Caisse Centrale Loan Agreement or (B) The raisse Centrale Loan shall have become due and payable prior to the agreed maturity thereof. (ii) Subparagraph (i) of this paragraph shall not apply if the Borrower establishes to the satisfaction of the Association that: (A) suspension, cancellation, termination or prematuring is not caused by the failure of the Borrower to perform any of its obligations under such agreement, and (B) adequate funds for the Project are available to the Borrower from other sources on terms and conditions consistent with the obligations of the Borrower under this Agreement and of HEVECAM under the Project Agreement. Section 4.02. For the purposes of Section 7.01 of the General Conditions, the following events are specified pursuant to paragraph (d) thereof: 9 (a) the event specified in paragraph (a) of Section 4.01 of this Agreement shall occur and shall continue for a period of 60 days after notice thereof shall have been given by the Association to the Borrower; and (b) the events specified in paragraphs (c), (d), (e) and (f)(i)B of Section 4.01 of this Agreement shall occur. ARTICLE V Effective Date; Termination Section 5.01. The following events are specified as additional conditions to the effectiveness of the Development Credit Agreement within the meaning of Section 12.01(b) of the General Conditions: (a) the execution and delivery of the Project Agreement on behalf of HEVECAM have been duly authorized or ratified by all necessary corporate and governmental action; (b) the execution and delivery of the Project Financing Agreement on behalf of the Borrower and HEVECAM, respectively, have been duly authorized or ratified by all necessary corporate and governmental action; (c) the Management Service and Technical Assistance Contract referred to in Section 2.02 of the Project Agreement has been entered into; (d) the Borrower has made available to HEVECAM an initial contribution to HEVECAM's equity in the amount of CFAF300 million and has furnished to the Association a schedule, satisfactory to the Association, for the payment of the remainder of its contribution to HEVECAM's equity; and (e) the conditions precedent, if any, to initial disbursements under the Caisse Centrale Loan Agreement have been fulfilled. Section 5.02. The following are specified as additional matters, within the meaning of Section 12.02(b) of the General Conditions, to be included in the opinion or opinions to be furnished to the Association: (a) that the Project Agreement has been duly authorized or ratified by, and executed and delivered on behalf of, HEVECAM, and is legally binding upon HEVECAM in accordance with its terms; and 10 (b) that the Project Financing Agreement has been duly authorized or ratified by, and executed and delivered on behalf of, the Borrower and HEVECAM, respectively, and is legally binding upon the Borrower and HEVECAM, respectively, in accordance with its terms. Section 5.03. The date December 1, 1975 is hereby specified for the purposes of Section 12.04 of the General Conditions. Section 5.04. The obligations of the Borrower under the provisions of paragraphs (a) through (e) of Section 4.01 of this Agreement and those of paragraphs (a) and (b) of Section 4.02 of this Agreement shall cease and determine on the date on which the Development Credit Agreement shall terminate or on a date twenty years after the date of this Agreement, whichever shall be the earlier. ARTICLE VI Representative of the Borrower; Addresses Section 6.01. The Ministre de l'Econonie et du Plan of the Borrower is designated as representative of the Borrower for the purposes of Section 11.03 of the General Conditions. Section 6.02. The following addresses are specified for the purposes of Section 11.01 of the General Conditions: For the Borrower: Ministere de 1'Economie et du Plan Yaound6 Cameroon Cable address: Telex: MINEP 8268 KN Yaound6, Cameroon For the Association: International Development Association 1818 H Street, N.W. Washington, D.C. 20433 United States of America 11 Cable address: Telex: INDEVAS 440098 (ITT) Washington, D.C. 248423 (RCA) or 64145 (WUI) IN WITNESS WHEREOF, the parties hereto, acting through their representatives thereunto duly authorized, have caused this Agreement to be signed in their respective names in the District of Columbia, United States of America, as of the day and year first above written. UNITED REPUBLIC OF CAMEROON By /s / F. X. Tchoungui Authorized Representative INTERNATIONAL DEVELOPMENT ASSOCIATION By /s/ R. Chaufournier Regional Vice President Western Africa 12 SCHEDULE I Withdrawal of the Proceeds of the Credit 1. The table below sets forth the Categories of items to be financed out of the proceeds of the Credit, the allocation of the amounts of the Credit to each Category and the percentage of expenditures for items so to be financed in each Category: Amount of the Credit Allocated % of (Expressed in Expenditures Category Dollar Equivalent) to be Financed (1) Civil works and 4,800,000 58% plantations (2) Equipment and 2,200,000 58% materials (3) Administration 2,500,000 58% (4) Food crop develop- 300,000 58% ment (5) Technical assis- 580,000 58% tance (6) Project related 120,000 58% studies (7) Master Plan 700,000 58% (8) Unallocated 4,800,000 TOTAL 16,000,000 13 2. The disbursement percentages have been calculated in compliance with the policy of the Association that no proceeds of the Credit shall be disbursed on account of payments for taxes levied by, or in the territory of, the Borrower on goods or services, or on the importation, manufacture, procurement or supply thereof; to that end, if the amount of any such taxes levied on or in respect of any item to be financed out of the proceeds of the Credit decreases or increases, the Association may, by notice to the Borrower, increase or decrease the disbursement percentage then applicable to such item as required to be consistent with the aforementioned policy of the Association. 3. Notwithstanding the provisions of paragraph 1 above, no withdrawals shall be made in respect of expenditures prior to the date of this Agreement, except that withdrawals may be made in respect of Categories (1) and (2) on account of expenditures incurred after January 1, 1975 in an aggregate amount not exceeding the equivalent of $300,000. 4. Notwithstanding the allocation of an amount of the Credit or the disbursement percentages set forth in the table in paragraph 1 above, if the * Association has reasonably estimated that the amount of the Credit then allocated to any Category will be insufficient to finance the agreed percentage of all expenditures in that Category, the Association may, by notice to the Borrower: (i) reallocate to such Category, to the extent required to meet the estimated shortfall, proceeds of the Credit which are then allocated to another Category and which in the opinion of the Association are not needed to meet other expenditures, and (ii) if such reallocation cannot fully meet the estimated shortfall, reduce the disbursement percentage then applicable to such expenditures in order that further withdrawals under such Category may continue until all expenditures thereunder shall have been made. 5. If the Association shall have reasonably determined that the procurement of any item in any Category is inconsistent with the procedures set forth or referred to in this Agreement, no expenditures for such item shall be financed out of the proceeds of the Credit and the Association may, without in any way restricting or limiting any other right, power or remedy of the Association under the Development Credit Agreement, by notice to the Borrower, cancel such amount of the Credit as, in the Association's reasonable opinion, represents the amount of such expenditures which would otherwise have been eligible for financing out of the proceeds of the Credit. 14 SCHEDULE 2 Description of the Project The Project is the first phase of the development of a rubber estate during the years 1975 through 1980 located north of the Ni6t6 River in the Kribi area of the Borrower's Ocean Department. The Project consists of the following parts: Part A The clearing of about 5,800 hectares and planting high-yielding rubber thereon, the preparation of about 1,700 hectares for planting thereon in 1981, and the maintenance of plantings during the development period of the Project. Part B The conducting of field trials of promising planting material and agro.omic research, if required. Part C The construction of housing, health, education and social facilities for about 3,000 families living on the rubber estate, and the building of service roads for the rubber estate. Part D The establishment of a commissariat on the rubber estate to provide food supplies and to supervise trials with foodcrops. Part E The preparation of a follow-up project, including the continuation of the pedological and topographical prospection. Part F The preparation of a program for training and technical assistance. Part G The preparation of a master plan for the Kribi area which emphasizes the production of perennial crops. The Project is expected to be completed by December 31, 1980.