Cameroon - Plaine Des M"bo Rural Development Project : Credit 0672 - Credit Agreement - Conformed

0 CONFORMED COPY CREDIT NUMBER 672 CM DEVELOPMENT CREDIT AGREEMENT (Plaine des M'bo Rural Development Project) between UNITED REPUBLIC OF CAMEROON and INTERNATIONAL DEVELOPMENT ASSOCIATION Dated February 28, 1977 DEVELOPMENT CREDIT AGREEMENT AGREEMENT, dated February 28, 1977, 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 Caisse Centrale de Cooperation Economique, an agency of the Republic of France (hereinafter called Caisse Centrale), a loan (hereinafter called the Caisse Centrale Loan) in an amount of ten million French Francs (FF10,000,000) to assist, inter alia, in financing the Project on the terms and conditions set forth in an agreement (hereinafter called the Caisse Centrale Loan Agreement) to be entered into between the Borrower and Caisse Centrale; and 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: -2- 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 Agree- ments of the Association being hereinafter called the General Conditions). Section 1.02. Wherever used in this Agreement, unless the context otherwise requires, the several terms defined in the General Conditions and in the Preamble to this Agreement have the respective meanings therein set forth and the following terms have the following meanings: (a) "SODERIM" means Societe de Developpement de la Rizicul- ture dans la Plaine des M'bo, a societe de developpement established and operating pursuant to Law No. 68/LF/9 of the Borrower of June 11, 1968; (b) "SODERIM Statutes" means the statutes approved by Decree No. 76/1 of the Borrower of January 3, 1977, as the same may be amended from time to time; -3- (c) "Financing Agreement" means the agreement to be entered into between the Borrower and SODERIM pursuant to Section 3.01 (b) of this Agreement, as the same may be amended from time to time, and such term includes all schedules to the Financing Agreement; (d) "Project Area" means the area described in the preamble to the description of the Project set forth in Schedule 2 to this Agreement; and (e) "FCFA" means the currency of the Borrower. -4- 0 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 equiva- lent to two million dollars ($2,000,000). 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 by agreement between the Borrower and the Association, 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 civil works to be fi- nanced out of the proceeds of the Credit, shall be procured in accordance with the provisions of Schedule 3 to this Agreement. Section 2.04. The Closing Date shall be June 30, 1980, or such later date as the Association shall establish. The Associ- ation shall promptly notify the Borrower of such later date. * -5- 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 March 15 and September 15 in each year. Section 2.07. The Borrower shall repay the principal amount of the Credit in semi-annual installments payable on each March 15 and September 15, commencing March 15, 1987, and ending September 15, 2026, each installment to and including the in- stallment payable on September 15, 1996, 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 prin- cipal amount. Section 2.08. The currency of the Republic of France 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 Agree- ment, the Borrower shall simultaneously prepay 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 prepayment by the Borrower in accor- dance with this Section. -6- ARTICLE III Execution of the Project Section 3.01. (a) The Borrower shall cause SODERIM to carry out the Project in accordance with the provisions of the Financ- ing Agreement, with due diligence and efficiency and in confor- mity with appropriate agricultural, engineering, financial and administrative practices, and shall provide to SODERIM, promptly as needed, the funds, facilities, services and other resources required for the purpose. (b) The Borrower shall make the funds required for the execution of the Project, including the proceeds of the Credit and of. the Caisse Centrale Loan, available to SODERIM under a financing agreement to be entered into between the Borrower and SODERIM under terms and conditions satisfactory to the Associa- tion and which shall include, inter alia, that the Borrower shall take all action necessary to ensure that SODERIM shall at all times have available liquid funds in an amount of not less than FCFA 70,000,000 for the purpose of prefinancing expenditures under the Project. (c) The Borrower shall exercise its rights under the Financ- ing Agreement in such manner as to protect the interests of the Borrower and the Association and to accomplish the purposes of the Credit, and the Borrower shall ensure that, except as the Association shall otherwise agree, neither the Financing Agree- ment nor any provision thereof shall be assigned, amended, abrogated or waived. S -7- Section 3.02 (a) In order to assist SODERIM in carrying out Parts A through G of the Project, the Borrower shall cause SODERIM to employ agricultural, health and economics consultants whose qualifications, experience and terms and conditions of employment shall be satisfactory to the Association. (b) Except as the Association may otherwise agree, the con- sultants assisting SODERIM in carrying out Parts A through C of the Project shall be employed not later than March 31, 1977, and the consultants assisting SODERIM in carrying out Parts D through F of the Project shall be employed not later than June 30, 1977. Section 3.03. The Borrower shall cause SODERIM to employ a Director General serving as Project Manager, an Administrative and Financial Manager and a Director in charge of applied research whose qualifications, experience and terms and conditons of employment shall be satisfactory to the Association. Section 3.04. (a) The Borrower shall cause SODERIM to insure, or to make adequate provision for the insurance of, the imported goods to be financed out of the proceeds of the Credit against hazards incident to the acquisition, transportation and delivery thereof to the place of use or installation, and for such insur- ance any indemnity shall be payable in a currency freely usable by SODERIM to replace or repair such goods. -8- (b) Except as the Association shall otherwise agree, the Borrower shall cause all goods and services financed out of the proceeds of the Credit to be used exclusively for the Project. Section 3.05. The Borrower shall cause SODERIM: (a) to furnish to the Association, promptly upon their preparation, the plans, specifications, reports, contract docu- ments and work and procurement schedules for the Project, and any material modifications thereof or additions thereto, in such detail as the Association shall reasonably request; and (b) (i) to maintain records adequate to record the progress of the Project (including the cost thereof) and to identify the goods and services financed out of the proceeds of the Credit, and to disclose the use thereof in the Project; (ii) to enable the Association's accredited renresentatives to visit the facil- ities and construction sites included in the Project and to ex- amine the goods financed out of the proceeds of the Credit and any relevant records and document; and (iii) to furnish to the Association promptly upon their completion copies of all reports and studies prepared under the Project, and all such information as the Association shall reasonably request concerning the Proj- ect, the expenditure of the proceeds of the Credit and the goods and services financed out of such proceeds. Section 3.06. The Borrower shall, before June 30, 1977, or such later date as the Association may agree, make available to SODERIM the land situated in the Project Area pursuant to the provisions of its Decrees No. 76/166 and No. 76/167, both of April 27, 1976. Section 3.07. The Borrower shall ensure that, until the Project will have been completed, SODERIM's budgets will make adequate provision for all expenditures to be incurred by SODERIM during the budget period, including without limitation expendi- tures on account of commitments entered into before such period by or for the account of SODERIM, and that adequate liquid funds will be available to SODERIM to meet such expenditures promptly when due. Section 3.08. The agricultural development and settlement of the land situated in the Project Area, including development and settlement under the Project, shall be limited to an area of 1,100 ha, until (i) the Project will have been completed; or (ii) the Bor,ower and the Association shall have agreed that an expansion of said area is justified in view of the results obtained under the Project. -10- ARTICLE IV Other Covenants Section 4.01. The Borrower shall cause SODERIM to maintain records adequate to reflect in accordance with consistently maintained sound accounting practices the operations and financial condition of SODERIM. Section 4.02. The Borrower shall cause SODERIM to: (i) have its accounts and financial statements (balance sheets, statements of income and expenses and related statements) for each fiscal year audited, in accordance with sound auditing principles con- sistently applied, by independent auditors acceptable to the Association; (ii) furnish to the Association as soon as available, but in any case not later than four months after the end of each such year, (A) certified copies of its financial statements for such year as so audited, and (B) the report of such audit by said auditors, or such scope and in such detail as the Association shall have reasonably requested; and (iii) furnish to the Association such other information concerning the accounts and financial statements of SODERIM and the audit thereof as the Association shall from time to time reasonably request. - 11 - ARTICLE V Remedies of the Association Section 5.01. For the purposes of Section 6.02 of the General Conditions, the following additional events are specified pursuant to paragraph (h) thereof: (a) The SODERIM Statutes shall have been amended., suspended, abrogated or repealed without the prior a.pproval of the Association. (b) (i) Subject to subparagraph (ii) of this paragraph: (A) The right of the Borrower to withdraw the proceeds of the Caisse Centrale Loan 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 Caisse Centrale Loan shall have become due and payable prior to the agreed matu- rity thereof. (ii) Subparagraph (i) of this paragraph shall not apply if the Borrower establishes to the sat- isfaction of the Association that: (A) such suspension, cancellation, termination or pre- maturing is not caused by the failure of the Borrower to perform any of its obligations - 12 - 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 Bor- rower under this Agreement. Section 5.02. For the purposes of Section 7.01 of the General Conditions, the following additional events are specified pursuant to paragraph (d) thereof, namely that the event specified in para- graph (b) (i) (B) of Section 5.01 of this Agreement shall occur. S- 13 - ARTICLE VI Effective Date; Termination Section 6.01. The following events are specified as addi- tional conditions to the effectiveness of this Agreement within the meaning of Section 12.01 (b) of the General Conditions: (a) the conditions precedent, if any, to initial disburse- ments under the Caisse Centrale Loan Agreement have been fulfilled; (b) the execution of the Financing Agreement on behalf of the Borrower and SODERIM, respectively, has been duly authorized or ratified by all necessary corporate and governmental action; and (c) the personnel specified in Section 3.03 of this Agreement has been appointed. Section 6.02. The following is specified as an additional matter, within the meaning of Section 12.02 (b) of the General Conditions, to be included in the opinion or opinions to be fur- nished to the Association, namely, that the Financing Agreement has been duly authorized or ratified by the Borrower and SODERIM and is legally binding upon the Borrower and SODERIM in accor- dance with its terms. -14 - Section 6.03. The date June 28, 1977, is hereby specified for the purposes of Section 12.04 of the General Conditions. Section 6.04. The obligations of the Borrower under Sections 4.01 and 4.02 of this Agreement shall cease and determine on the date on which the Development Credit Agreement shall terminate or on a date five years after the date of this Agreement, whichever shall be the earlier. 0 -15 - ARTICLE VII Representative of the Borrower; Addresses Section 7.01. The Minister of the Borrower responsible for planning is designated as representative of the Borrower for the purposes of Section 11.03 of the General Conditions. Section 7.02. The following addresses are specified for the purposes of Section 11.01 of the General Conditions: For the Borrower: Ministry of Economic Affairs and Planning Yaoundg United Republic of Cameroon Cable address: Telex: MINEP 8268 KN Yaoundg For the Association: International Development Association 1818 H Street, N.W. Washington, D.C. 20433 United States of America Cable address: Telex: INDEVAS 440098 (ITT) Washington, D.C. 248423 (RCA) or 64145 (wUI) - 16- IN WITNESS WHEREOF, the parties hereto, acting through their representatives thereunto duly authorized, have caused this Agree- ment 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/ Michael Kima Authorized Representative INTERNATIONAL DEVELOPMENT ASSOCIATION By /s/ Xavier de la Renaudibre Director Country Programs Department Western Africa Regional Office - 17 - SCHEDULE 1 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 amount 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 220,000 75% (2) Equipment 320,000 75% (3) Operating costs of 380,000 75% SODERIM, including salaries of local personnel (4) Consultants' and 710,000 75% management ser- vices (5) Unallocated 370,000 TOTAL 2,000,000 - 18 - 0 2. The disbursement percentages have been calculated in compli- ance 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 re- spect 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 with- drawals shall be made in respect of payments made for expenditures prior to the date of this Agreement. 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 Cate- gory, the Association may, by notice to the Borrower: (i) reallo- cate to such Category, to the extent required to meet the estimated shortfall, proceeds of the Credit which are then allocated to an- other 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 fur- ther withdrawals under such Category may continue until all expen- ditures thereunder shall have been made. - 19 - 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 the Development Credit 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. - 20 - SCHEDULE 2 Description of the Project The Project, which constitutes part of a first program of agricultural development of the Plaine des M'bo, an area of about 23,000 ha in the Littoral and Western Provinces of Cameroon, consists of the following Parts: A. Soil investigations. B. Agronomic trials to develop an economic cropping system. C. Trial of various mechanization and settlement systems on about 300 ha, and provision of extension and support services to farmers settled thereon. D. A marketing study for locally produced soja. E. A migration study for the settlement of the Plaine des M'bo. F. A 3tudy of health control measures required for development of the Plaine des M'bo, particularly tse-tse eradication. G. A feasibility study for a second program of agricultural development of the Plaine des M'bo. The Project is expected to be completed by December 31, 1979. - 21 - SCHEDULE 3 Procurement A. Procurement Procedures Contracts for the purchase of goods or for civil works shall be procured on the basis of competitive bidding advertised locally in accordance with procedures acceptable to the Association. B. Review of Procurement Decisions by the Association 1. Review of invitations to bid and of proposed awards and final contracts: With respect to all contracts for civil works estimated to cost the equivalent of $100,000 or more, and with respect to all contracts for equipment estimated to cost the equivalent of $25,000 or more: (a) Before bids are invited, the text of the invitations to bid and the specifications and other bidding documents, together with a description of the advertising procedures to be followed for the bidding shall be furnished to the Association for its comments, and such modifications shall be made in the said documents or procedures as the Association shall reasonably request. Any further modification to the bidding documents shall require the Association's concurrence before it is issued to the prospective bidders. - 22 - (b) After bids have been received and evaluated and before a final decision on the award is made, the Association shall be informed of the name of the bidder to which the award of the contract is intended to be made, and a detailed report on the evaluation and comparison of the bids received, together with such other information as the Association shall reasonably request, shall be furnished to the Association in sufficient time for its review. The Association shall, if it determines that the intended award would be inconsistent with this Schedule, promptly inform SODERIM and state the reasons for such determination. (c) The terms and conditions of the contract shall not, without the Association's concurrence, materially differ from those on which bids were asked. (d) Two conformed copies of the contract shall be furnished to the Association promptly after its execution and prior to the submission to the Association of the first application for with- drawal of funds from the Credit Account in respect of such contract. 2. With respect to each contract to be financed out of the proceeds of the Credit and not governed by the preceding paragraph, two conformed copies of such contract, together with the analysis of the respective bids, recommendations for award and such other information as the Association shall reasonably request, shall be furnished to the Association promptly after its execution and prior to the submission to the Association of the first application for withdrawal of funds from the Credit Account in respect of such contract. The Association shall, if it determines that the award of the contract was not consistent with this Schedule, promptly inform SODERIM and state the reasons for such determination.