Announcement of Fifteen Million Dollars World Bank Loan for Agriculture in Cameroon on December 29, 1977

-.world 3ank 1818 H Street, N.W., Washington, 0.C. 20433, U.S.A. • Telephone: {202) 393-6360 BANK NEWS RELEASE NO. 78/34 December 29, 1977 $15 MILLION WORLD BANK LOAN FOR AGRICULTURE IN CAMEROON The World Bank has approved a S15 million loan to help finance a proj- ect that will expand the production of rubber and oil palm produce in the Cameroon. The project will assist the Cameroon Government's program to increase and diversify ttie activities of the Cameroon Development Corporation (CAMOEV), a state-owned agricultural development agency. Established in 1946, the agency operates large agricultural estates, based on rubber and oil palm as the major crops. At present, CAHDEV employs 12,000 people, who work on some 30,000 hec- tares of rubber and oil palm estates. Under the project, CAMOEV's production will be increased through the clearing and planting of 7,900 h~ctares of rubber estate and 600 hectares of oil palm estate. Another 2,000 hectares will be developed for smallholder •• fanners, outgrowers, who will also plant rubber and oil palm. The efficiency of the agency wilt be improved by the strengthening of its management and admin- istration as well as the provision of·technical assistance services. This project marks the second stage of CAt1DEV's long-term deve1opment program. The first stage, initiated in the 1960s, has just been successfully completed. The project was a 1so supported by the \./or 1d Bank .and its affi 1 i ate, the International Development Association (IDA), with a combined loan and credit worth $18 mi-11 ion. The new project is expected to increase the output of rubber and oil palm produce, thus helping to improve significantly Cameroon's balance of pay- ments. The estates portion of the project. will provide 5,000 new jobs, while the outgrower program will increase the income of about 1,300 farmer famii ies. The $15 million World Bank loan will pay 38 percent of the total cost of the project, estimated at $39.3 million. Other external contributors are the United Kingdom's Corrmonwealth Development Corporation (CDC) and the Caisse Centrale de Cooperation Economique of France with loans of $7.S million each. The remainder of the project cost will be borne by CAHDEV and the Government of Cameroon who wilt contribute $7.6 million and $1.7 million respectively. The World Bank loan will be for 20 years, including 5 years of grace, • with an interest rate of 7.9 percent per annum . !!£II: Honey figures are expressed in U.S. dollar equivalents. FORM NO. 1121 (!5-7f5) T ECHN I CA L DAT A • PROJECT: Second CAMDEV COUNTRY: Cameroon TOTAL COST: $3 9. 3 mi 11 i on BANK FINANCING: $15.0 million for 20 years, including 5 years of grace, at an interest rate of 7.9 percent per annum. OTHER FINANCING: Caisse Centrale de Cooperation Economique of France (CCCE) $7.5 million; Commonwealth Development Corporation (CDC) of the United Kingdom $7.5 million; Cameroon Development Corporation (CAMDEV) $7.6 million; Government of Cameroon $1.7 million. IMPLEMENTING ORGANIZATION: The Cameroon Development Corporation (CAMDEV) Bota Victoria, United Repub 1 i c of C<...· "1eroon PROJECT DESCRIPTION: The proposed project, a fol low-up to a successfully com- pleted first stage project, aims at i~creasing the produc~· ticm and efficiency of CAMOEV, introducing a smallholder development program, and preparing for future development of CAHDEV and its surrounding area. The project will be implemented over a 4-1/2 year investment period and will include: (a) estab- lishing 7,900 hectares (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) preparation for CAMDEV's future expansion program anticipated to begin in 1982/83, including a Master Plan for the coastal region. PROCUREMENT: Goods and services subject to international competitive bidding, following Bank guidelines -- mainly machinery, vehicles and equipment, fertilizer and some imports for construction· -- are estimated to cost about $11.6 million. Locally manufactured goods will be allowed a preference of 15 percent or the level of applicable import duty, whichever is lower. Contracts not exceeding $100,000 will be let on the basis of competitive bidding advertised locally under procedures satisfactory to the Bank. Most land clearing, estate road building, plantation work and minor estate construction will be done on force account ($13.6 million) using equipment purchased u~der the project. CONSULTANTS: Specialists and consultants wilt be selected following Bank guidelines. • ECONOMIC RATE OF RETURN: 17 percent ESTIMATED COMPLETION DATE: 1982 - 0 -