Cameroon - Second Cameroon Development Corporation Project

Decument of The World Bank IFOIR EDlCIAL USIE ONLY Repprt No. P-2150-CM REPORT AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT TO THE EXECUTIVE DIRECTORS ON A PROPOSED LOAN TO THE UNITED REPUBLIC OF CAMEROON FOR A SECOND CAMDEV PROJECT December 8, 1977 TDei tmemt bh n Fcg( i X I o b2 ue byileSp ony Im &e p2firm pce ofi er ofielDa mies. io oee gDFy imoa cbAene be disoeaBI wfihonn Woirna MEam amAOghflon.  CAMEROON SECOND CAMDEV PROJECT CURRENCY EQUIVALENTS CURRENCY UNIT CFA Franc (CFAF) US$1 CFAF 245 1/ CFAF 1,000 US$4.1 CFAF 1,000,000 = US$4,082 1/ Floating exchange rate. ABBREVIATIONS BEAC - Banque des Etats de l'Afrique Centrale CAMDEV - Cameroon Development Corporation CCCE - Caisse Centrale de Cooperation Economique CDC - Commonwealth Development Corporation EDF - European Development Fund EIB - European Investment Bank FONADER - Fonds National de Developpement Rural HEVECAM - Societe Hevea - Cameroun ONAREST - Office National-de Recherches Scientifiques et Techniques PAMOL - Societe Pamol - Cameroun SAFACAM - Societe Africaine Forestiere et Agricole FISCAL YEAR July 1 to June 30  FOR OFFICIAL USE ONLY CAMEROON SECOND CAMDEV PROJECT LOAN AND PROJECT SUMMARY Borrower: United Republic of Cameroon Beneficiary: Cameroon Development Corporation (CAMDEV) Amount: US$15.0 million Terms: 20 years including 5 years of grace at interest rate of 7.9 percent per annum. Relending Terms: US$12.9 million of the proceeds of the Bank loan would be relent to CAMDEV on the same terms applicable to the Bank loan; US$1.1 million would be passed on as grants to FONADER and CAMDEV for the outgrower program; the Government would apply the remaining US$1.0 million against the financing of a master plan study. Co-Financing: The Caisse Centrale de Cooperation Economique of France (CCCE) and the U.K.'s Commonwealth Development Cor- poration (CDC) would make loans to the Government for the same project amounting to US$7.5 million equiva- lent each. Project Description: The proposed project, a follow-up to a successfully completed first stage project, aims at increasing the production and efficiency of CAMDEV, introducing a smallholder development program, and preparing for future development of CAMDEV and its surrounding area. The project would be implemented over a 4-1/2 year investment period and would include: (a) establishing 7,900 ha of estate rubber and 600 ha of estate oil palm and 2,000 ha of outgrower rubber and oil palm; (b) management and administration including provision of technical assistance services; and (c) preparations for CAMDEV's future expansion program anticipated to begin in 1982/83, including a Master Plan for the coastal region. Main benefits from project-financed investments would consist of increased output of rubber and palm kernels which would help significantly improve Cameroon's balance of payments and of palm oil mostly to meet a growing do- mestic demand. The project would also provide for the continued strengthening and development of CAMDEV on This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  - ii - which the prosperity of the western part of Cameroon is based. Employment and substantially increased incomes would be provided for about 5,000 estate workers most of whom are expected to come from the poorer parts of the region and about 1,300 farming families in the outgrower program. There are no major risks involved with the proposed project although initial difficulties may be encountered in attracting participants for the outgrower program. However, CAMDEV's experience and good reputation would facilitate recruitment of estate laborers and the financially attractive outgrower returns should induce local farmer participation in the program. Estimated Cost: The total estimated cost net of taxes of the project is US$37.2 million. The foreign exchange component is US$21.2 million. Contingencies total US$9.4 million with price contingencies 21 percent and physical con- tingencies 10 percent of base cost. x of Total Local Foreign Total Project ---------US$ million