Cameroon - Second Camdev Project : Loan 1508 - Loan Agreement - Conformed

CONFORMED COPY LOAN NUMBER 1508 CM Loan Agreement (Second CAMDEV Project) between UNITED REPUBLIC OF CAMEROON and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT Dated February 1, 1978 LOAN NUMBER 1508 CM LOAN AGREEMENT AGREEMENT, dated February 1, 1978, between UNITED REPUBLIC OF CAMEROON (hereinafter sometimes called the Borrower or Cameroon) and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT (herein- after called the Bank). WHEREAS (A) the Borrower has requested the Bank to assist in the financing of the Project described in Schedule 2 to this Agreement by making the Loan as hereinafter provided; (B) Parts A, B, D and E of the Project will be carried out by the Cameroon Development Corporation, and Part C of the Project will be carried out jointly by the Cameroon Development Corpora- tion and the Fonds National de D6veloppement Rural (hereinafter called FONADER), all with the Borrower's assistance and, as part of such assistance, the Borrower will make available to the Cameroon Development Corporation and FONADER, respectively, the proceeds of the Loan allocated to said Parts of the Project as hereinafter provided; (C) the Borrower intends to contract from Caisse Centrale de Coop6ration Economique, an agency of the Republic of France (hereinafter called Caisse Centrale), a loan (hereinafter called the Caisse Centrale Loan) in an amount of thirty six million seven hundred fifty thousand French francs (FF36,750,000) to assist in financing the Project on the terms and conditions set forth in an agreement (hereinafter called the Caisse Centrale Loan Agree- ment) to be entered into between the Borrower and Caisse Centrale; (D) the Borrower further intends to contract from the Commonwealth Development Corporation, a statutory corporation established in the United Kingdom of Great Britain and Northern Ireland, a loan (hereinafter called the Commonwealth Development Corporation Loan) in an amount equivalent to seven million five hundred thousand dollars ($7,500,000) to assist in financing Parts A through E of the Project on the terms and conditions set forth in an agreement (hereinafter called the Commonwealth Development Corporation Loan Agreement) to be entered into between the Borrower and the Commonwealth Development Corporation; (E) pursuant to a loan agreement dated March 28, 1967, and a development credit agreement of even date therewith, the Bank -2- and the International Development Association have made available to the Cameroon Development Corporation and the Borrower, respec- tively, a loan (No. 490 CM) and a development credit (No. 100 CM) for the purpose of assisting the Cameroon Development Corporation in carrying out a prior development project; and WHEREAS the Bank has agreed, on the basis inter alia of the foregoing, to make the Loan available to the Borrower upon the terms and conditions set forth hereinafter and in a project agreement of even date herewith between the Bank and the Cameroon Development Corporation; 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 Loan and Guarantee Agreements of the Bank, dated March 15, 1974, with the same force and effect as if the" were fully set forth herein (said General Conditions Applicable k Loan and Guarantee Agreements of the Bank being hereinafter ct, led the General Conditions); it being understood that the Project Agreement (as defined herein- after) is deemed to be an "agreement supplemental" to the Loan Agreement within the meaning of Section 2.01 (3) of 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 additional terms have the following meanings: (a) "Project Agreement" means the agreement between the Bank and the Cameroon Development Corporation of even date herewith, as the same may be amended from time to time, and such term includes all agreements supplemental to the Project Agreement; (b) the "Cameroon Development Corporation" refers to a de- velopment corporation of the Borrower established and operating pursuant to the Borrower's Law No. 66/LF/19, dated December 11, 1966, Law No. 68/LF/9, dated June 10, 1968, Decree No. 68/DF/275, dated July 15, 1968, and Decree No. 73/597, dated September 26, -3- 1973, and the Memorandum and Articles of Association annexed thereto, as such Laws, Decrees and Memorandum and Articles of Association may be amended from time to time; (c) "Cameroon Development Corporation Financing Agreement" means the agreement to be entered into between the Borrower and the Cameroon Development Corporation 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 Cameroon Devel- opment Corporation Financing Agreement; (d) "FONADER" means the Fonds National de Dfveloppement Rural of the Borrower, established and operating pursuant to the Borrower's Ordinance No. 73/24, dated May 29, 1973 (as amended by the Borrower's Law No. 77/05, dated July 13, 1977), and Decree No. 73/496, dated August 28, 1973, as such Ordinance and Decree may be amended from time to time; (e) "FONADER Financing Agreement" means the agreement to be entered into between the Borrower and FONADER pursuant to Section 3.01 (d) of this Agreement, as the same may be amended from time to time, and such term includes all schedules to the FONADER Financing Agreement; and (f) "Credit Administration Agreement" means the agreement to be entered into between the Cameroon Development Corporation and FONADER pursuant to Section 3.02 (a) of this Agreement and Section 2.02 (a) (i) of the Project Agreement, as the same may be amended from time to time, and such term includes all schedules to the Credit Administration Agreement. ARTICLE II The Loan Section 2.01. The Bank agrees to lend to the Borrower, on the terms and conditions in the Loan Agreement set forth or referred to, an amount in various currencies equivalent to fifteen million dollars ($15,000,000). Section 2.02. The amount of the Loan may be withdrawn from the Loan 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 Bank, for expendi- tures made (or, if the Bank shall so agree, to be made) in respect -4- of the reasonable cost of goods and services required for the Project and to be financed out of the proceeds of the Loan. Section 2.03. Except as the Bank shall otherwise agree, procurement of the contracts for the purchase of goods and civil works to be financed out of the proceeds of the Loan shall be governed by the provisions of Schedule 4 to this Agreement. Section 2.04. The Closing Date shall be December 31, 1982, or such later date as the Bank shall establish. The Bank shall promptly notify the Borrower of such later date. Section 2.05. The Borrower shall pay to the Bank a commit- ment charge at the rate of three-fourths of one per cent (3/4 of 1%) per annum on the principal amount of the Loan not withdrawn from time to time. Section 2.06. The Borrower shall pay interest at the rate of seven and nine-tenths per cent (7.90%) per annum on the prin- cipal amount of the Loan withdrawn and outstanding from time to time. Section 2.07. Interest and other charges shall be payable semiannually on February 15 and August 15 in each year. Section 2.08. The Borrower shall repay the principal amount of the Loan in accordance with the amortization schedule set forth in Schedule 3 to this Agreement. ARTICLE III Execution of the Project Section 3.01. (a) The Borrower shall carry out Part F of the Project through its Ministry of Economic Affairs and Planning with due diligence and efficiency and in conformity with appropriate administrative, economic, financial 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 Loan Agreement, the Borrower shall cause the Cameroon Development Corporation to perform in accor- dance with the provisions o: the Project Agreement, the Cameroon Development Corporation Financing Agreement and the Credit Admin- istration Agreement all the obligations therein set forth, shall take or cause to be taken all action, including any necessary joint actioun to be taken with the Cameroon Development Corporation and the provision of funds, facilities, services and other resources, necessary or appropriate to enable the Cameroon Devel- opment Corporation 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 funds required for Parts A, B, C (i), D and E of the Project available to the Cameroon Devel- opment Corporation under a financing agreement to be entered into between the Borrower and the Cameroon Development Corporation, on terms and conditions which shall have been approved by the Bank. (d) The Borrower shall make the funds required for Part C (ii) of the Project available to FONADER under a financing agree- ment to be entered into between the Borrower and FONADER, on terms and conditions which shall have been approved by the Bank. Such terms and conditions shall, inter alia, include that such funds shall be used for providing inputs to 3mallholders under Part C (ii) of the Project through the Cameroon Development Corporation as agent of FONADER, in accordance with the provisions of the Credit Administration Agreement. (e) The Borrower shall exercise its rights under the Cameroon Development Corporation and FONADER Financing Agreements in such manner as to prote4-, the interests of the Borrower and the Bank and to accomplish the purposes of the Loan, and, except as the Bank shall otherwise agree, the Borrower shall not assign, amend, abrogate or waive the Cameroon Development Corporation Financing Agreement or the FONADER Financing Agreement or any provision thereof. Section 3.02. (a) The Borrower shall cause FONADER to enter into a credit edministration agreement with the Cameroon Devel- opment Corporation on terms and conditions satisfactory to the Bank for the purpose of the joint execution of Part C of the Project by FONADER and the Cameroon Development Corporation and, in particular, the provision of financial assistance to small- holders under Part C (ii) of the Project. (b) The Borrower shall cause FONADER to duly perform all its obligations under the Citedit Administration Agreement, to -6- exercise its rights thereunder in such manner as to protect the interests of the Borrower and the Bank and to accomplish the purposes of the Loan and, except as the Bank may otherwise agree, not to assign, amend, suspend, terminate, abrogate or waive the Credit Administration Agreement or any provision thereof. (c) The Borrower shall cause FONADER: (i) at the request of the Bank, to exchange views with the Bank with regard to the progress of Part C (ii) of the Project, the performance of FONADER's obligations under the FONADER Financing Agreement and under the Credit Administration Agreement, and other matters relating to the purposes of the Loan; and (ii) promptly to inform the Bank of any condition which interferes, or threatens to interfere, with the progress of Part C (ii) of the Project, the accomplishment of the purposes of the Loan, or the performance by FONADER of its obligations under the FONADER Financing Agreement and under the Credit Administration Agreement. Section 3.03. The Borrower shall take all action necessary to ensure that any smallholder participating in the smallholder development programs to be established under Part C of the Project shall have the right to use the plantings established by such smallholder under said programs for the entire period of the economic.life of such plantings. Section 3.04. In order to secure assistance in carrying out Part F of the Project, the Borrower shall employ consultants and experts whose qualifications, experience and terms and conditions of employment shall be satisfactory to the Bank. Section 3.05. The Borrower shall review the progress of Part F of the Project at least once every year in consultation with the Bank and, on the basis of such reviews, annually furnish to the Bank, for its concurrence, detailed proposals regarding the further action to be taken by the Borrower for carrying out said Part of the Project. Section 3.06. (a) The Borrower undertakes to insure, or make adequate provision for the insurance of, the imported goods to be financed out of the proceeds of the Loan allocated to Part F of the Project against hazards incident to the acquisition, trans- portation and delivery thereof to the place of use or installa- tion, and for such insurance any indemnity shall be payable in a currency freely usable by the Borrower to replace or repair such goods. -7- (b) Except as the Bank shall otherwise agree, the Borrower shall cause all goods and services financed out of the proceeds of the Loan allocated to Part F of the Project to be used exclu- sively for said Part of the Project. Section 3.07. (a) The Borrower shall furnish to the Bank, promptly upon their preparation, the plans, reports, contract documents and work ar. procurement schedules for Part F of the Project, and any material modifications thereof or additions thereto, in such detail as the Bank shall reasonably request. (b) The Borrower: (i) shall maintain or cause to be main- tained records and procedures adequate (A) to record and monitor the progress of Part F of the Project (including the cost there- of), (B) to identify the goods and services financed out of the proceeds of the Loan allocated thereto and to disclose the use thereof in said Part of the Project, and (C) to reflect in accordance with consistently maintained appropriate accounting practices the operations, resources and expenditures, i respect of said Part of the Project, of the departments or agene of the Borrower responsible for carrying out said Part of tta .oject; and (ii) shall furnish to the Bank at regular intervals i1 such information as the Bank shall reasonably request concerni.g Part F of the Project, the expenditure of the proceeds of the Loan allocated thereto and the goods and services financed out of such proceeds. ARTICLE IV Other Covenants Section 4.01. (a) It - the policy of tne Bank, in making loans to, or with the guarane.i of, its members not to seek, in normal circumstances, spec.% se-urity from the member con- cerned but to ensure that no o external debt shall have priority over its loans in the allocation, realization or distri- bution of foreign exchange held under the control or for the benefit of such member. To that end, if any lien shall be created on any public assets (as hereinafter defined), as security for any external debt, which will o-; might result in a priority for the benefit of the creditor of such external debt in the alloca- tion, realization or distribution of foreign exchange, such lien shall, unless the Bank shall otherwise agree, ipso facto and at no cost to the Bank, equally and ratably secure the principal of, and interest and other charges on, the Loan, and the Borrower, in creating or permitting the creation of such lien, shall make express provision to that effect; provided, however, that, if for any constitutional or other legal reason such provision cannot be made with respect to any lien created on assets of any of its political or administrative subdivisions, the Borrower shall promptly and at no cost to the Bank secure the principal of, and interest and other charges on, the Loan by an equivalent lien on other public assets satisfactory to the Bank. (b) The foregoing undertaking shall not apply to: (i) any lien created on property, at the time of purchase thereof, solely as security for payment of the purchase price of such property; and (ii) any lien arising in the ordinary course of banking transactions and securing a debt maturing not more than one year after its date. (c) As used in this Section, the term "public assets" means assets of the Borrower, of any political or administrative subdivision thereof and of any entity owned or controlled by, or operating for the account or benefit of, the Borrower or any such subdivision, including gold and other foreign exchange assets held by any institution performing the functions of a central bank or exchange stabilization fund, or similar functions, for the Borrower. Section 4.02. Without any limitation or restriction upon any of its other obligations under the Loan Agreement, the Bor- rower shall take or cause to be taken all action, including the provision of funds, services and other resources, necessary: (a) to enable the Cameroon Development Corporation: (i) to bring the plantings established under Parts A and B of the Project into production; and (ii) to perform its obligations under Sections 3.01 (b) (ii) and 4.04 (a) of the Project Agreement; and (b) to ensure: (i) that the plantings to be established under Part C of the Project shall be brought into, and maintained in, production; and (ii) that adequate processing -facilities are available for the produce of the plantings to be established under Parts A, B and C of the Project. Section 4.03. The Borrower shall set the producer prices for latex and oil palm fruit bunches upon recommendation of the Cameroon Development Corporation and at levels adequate to -9- ensure (A) a reasonable revenue to smallholders under Part C of the Project from their plantings, and (B) the recovery by the Cameroon Development Corporation of the cost of collection of latex and oil palm fruit bunches from smallholders and processing thereof and of its other expenses related to the smallholder development programs under Part C of the Project, and such prices shall be the subject of annual exchanges of views between the Borrower and the Bank. Section 4.04. Except as the Bank may otherwise agree, the Borrower shall cause FONADER to use the proceeds of the Loan disbursed on account of inputs provided on credit to smallholders under Part C (ii) of the Project, as and when such credits are repaid by beneficiaries, for providing further such credits under the financial assistance programs established under said Part of the Project. ARTICLE V Remedies of the Baak Section 5.01. For the purposes of Section 6.02 of the General Conditions, the following additional events are specified pursuant to paragraph (k) thereof: (a) The Cameroon Developioent Corporation shall have failed to perform any covenant, agreement or obligation of the Cameroon Development Corporation under the Project Agreement. (b) A default shall occur in the performance of any cove- nant, agreement or obligation on the part of the Cameroon Devel- opment Corporation or FONADER, as the case may be, under the Credit Administration Agreement or the FONADER Financing Agree- ment. (c) An extraordinary situation shall have arisen which shall make it improbable: (i) that the Cameroon Development Corporation will be able to perform its obligations under the Project Agree- ment; or (ii) that FONADER will be able to perform its obligations under the Credit Administration Agreement. (d) A representation made by the Cameroon Development Corporation in or pursuant to the Project Agreement, or any statement furnished in connection therewith, and intended to be relied upon by the Bank in making the Loan, shall have been incorrect in any material respect. - 10 - (e) The Cameroon Development Corporation shall have become unable to pay its debts as they mature or any action or proceeding shall have been taken by the Cameroon Development Corporation or by others whereby any of the assets of the Cameroon Development Corporation shall or may be distributed among its creditors. (f) The Borrower or any other authority having jurisdiction shall have taken any action for the dissolution or disestablish- ment of the Cameroon Development Corporation or for the suspension of its operations. (g) Any provision of the Borrower's Laws or Decrees referred to in Section 1.02 (b) of this Agreement, or of the Memorandum and Articles of Association of the Cameroon Development Corpora- tion referred to in said Section, shall have been amended, sus- pended, terminated or repealed so as to affect materially and adversely the Cameroon Development Corporation's ability to carry out the covenants, agreements and obligations set forth in the Project Agreement. (h) The Borrower or any other authority having jurisdiction shall have taken any action for the dissolution or disestablish- ment of FONADER or for the suspension of its operations without prior arrangements satisfactory to the Bank having been made by the Borrower for the transfer to another department or agency of the Borrower of the functions of FONADER with respect to the smallholder development programs to be established under Part C of the Project. (i) Any provision of the Borrower's Ordinance No. 73/24, dated May 29, 1973 (as amended by the Borrower's Law No. 77/05, dated J ly 13, 1977), or Decree No. 73/496, dated August 28, 1973, shall have been amended, suspended, abrogated, repealed or waived so as to affect materially and adversely the ability of FONADER to assist in carrying out Part C of the Project in accordance with the Credit Administration Agreement. (j) (i) Subject to subparagraph (ii) of this paragraph: (A) the right of the Borrower or the Cameroon De- velopment Corporation to withdraw the proceeds of any grant or loan made to the Borrower or the Cameroon Development Corporation for the financing of the Project, including the Caisse Centrale Loan and the Commonwealth Development - 11 - Corporation Loan, shall have been suspended, cancelled or terminated in whole or in part, pursuant to the terms of the agreement pro- viding therefor; or (B) any such loan shall have become due and payable prior to the agreed maturity therefor. (ii) Subparagraph (i) of this paragraph shall not apply if: (A) such suspension, cancellation, termination or prematuring is not caused by the failure of the Borrower or the Cameroon Development Corporation to perform any of its obligations under such agreement; and (B) adequate funds for the Project are available to the Borrower or the Cameroon Development Corporation, as the case shall require, from other sources on terms and conditions consis- tent with the obligations of the Borrower under this Agreement and of the Cameroon Development Corporation under the Project Agreement. Section 5.02. For the purposes of Section 7.01 of the General Conditions, the following additional events are specified pursuant to paragraph (h) thereof: (a) any event specified in paragraphs (a) or (b) of Section 5.01 of this Agreement shall occur and shall continue for a period of sixty days after notice thereof shall have been given by the Bank to the Borrower and the Cameroon Development Corporation or FONADER, as the case may be; and (b) any event specified in paragraphs (e), (f), (g), (h) or (j) (i) (B) of Section 5.01 of this Agreement shall occur. ARTICLE VI Effective Date; Termination Section 6.01. The following events are specified as addi- tional conditions to the effectiveness of the Loan Agreement within the meaning of Section 12.01 (c) of the General Conditions: - 12 - (a) the Cameroon Development Corporation Financing Agreement has been executed on behalf of the Borrower and the Cameroon Development Corporation; (b) the Caisse Centrale Loan Agreement and the Commonwealth Development Corporation Loan Agreement have been duly signed and all conditions, if any, precedent to initial disbursements under the Caisse Centrale Loan Agreement and the Commonwealth Develop- ment Corporation Loan Agreement, except for the effectiveness of the Loan Agreement, have been fulfilled; and (c) the specialists referred to in paragraphs (a) (i) and (b) (i) of Section 2.03 of the Project Agreement have been appointed by the Cameroon Development Corporation in accordance with the provisions of said Section. Section 6.02. The following are specified as additional matters, within the meaning of Section 12.02 (c) of the General Conditions, to be included in the opinion or opinions to be furnished to the Bank: (a) that the Project Agreement has been duly authorized or ratified by the Cameroon Development Corporation, and is legally binding upon the Cameroon Development Corporation in accordance with its terms; and (b) that the Cameroon Development Corporation Financing Agreement has been duly authorized or ratified by the Borrower and the Cameroon Development Corporation, and is legally binding upon the Borrower and the Cameroon Development Corporation in accordance with its terms. Section 6.03. The date June 1, 1978, is hereby specified for the purposes of Section 12.04 of the General Conditions. ARTICLE VII Representatives 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: - 13 - For the Borrower: Ministry of Economic Affairs and Planning Yaoundr United Republic of Cameroon Cable address: Telex: MINEP 8268 KN Yaoundf For the Bank: International Bank for Reconstruction and Development 1818 H Street, N.W. Washington, D.C. 20433 United States of America Cable address: Telex: INTBAFRAD 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/ Benott Bindzi Authorized Representative INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT By /s/ Roger Chaufournier Regional Vice President Western Africa - 14 - SCHEDULE 1 Withdrawal of the Proceeds of the Loan 1. The table below sets forth the Categories of items to be financed out of the proceeds of the Loan, the allocation of the amounts of the Loan to each Category and the percentage of expenditures for items so to be financed in each Category: Amount of the Loan Allocated % of (Expressed in Expenditures Category Dollar Equivalent) to be Financed (1) Vehicles, equip- 10,400,000 39% ment, civil works, field development (including land clearing, planting materials, ferti- lizer and other supplies, planting and maintenance) and operating costs, including specialists' services and other staff salaries, under Parts A and B of the Project (2) Vehicles, equipment, 600,000 39% civil works and operating costs, including specialists' services and other staff salaries, of the Cameroon Development Corporation under Part C of the Project (3) Planting materials, 400,000 39% fertilizer and other inputs for Part C (ii) of the Project - 15 - Amount of the Loan Allocated % of (Expressed in Expenditures Category Dollar Equivalent) to be Financed (4) Technical assistance 600,000 39% services for Part D of the Project (5) Civil works, equip- 700,000 39% ment, materials and operating costs, including specialists' services and other staff salaries, under Part E of the Project (6) Vehicles, equip- 900,000 39% ment, operating costs and consul- tants' services under Part F of the Project (7) Unallocated 1,400,000 TOTAL 15,000,000 2. The disbursement percentages have been calculated in compli- ance with the policy of the Bank that no proceeds of the Loan 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 Loan decreases or increases, the Bank 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 Bank. 3. Notwithstanding the provisions of paragraph 1 above, no withdfawals shall be made: - 16 - (a) in respect of payments made for expenditures prior to the date of this Agreement; and (b) in respect of expenditures under Categories (2) and (3), until evidence satisfactory to the Bank shall have been furnished to the Bank, showing: (i) that the FONADER Financing Agreement has been duly signed on behalf of the Borrower and FONADER; (ii) that the Credit Administration Agreement has been duly signed on behalf of the Cameroon Development Corporation and FONADER; (iii) that the execution of the FONADER Financing Agreement on behalf of the Borrower and FONADER and of the Credit Administration Agree- ment on behalf of FONADER and the Cameroon Development Corporation has been duly authorized or ratified by all necessary governmental and corporate action; and (iv) that the FONADER Financing Agree- ment is legally binding upon the Borrower and FONADER and the Credit Administration Agreement is legally binding upon FONADER and the Cameroon Development Corporation, in accordance with their respective terms. 4. Notwithstanding the allocation of an amount of the Loan or the disbursement percentages set forth in the table in paragraph 1 above, if the Bank has reasonably estimated that the amount of the Loan then allocated to any Category will be insufficient to finance the agreed percentage of all expenditures in that Cate- gory, the Bank may, by notice to the Borrower: (i) reallocate to such Category, to the extent required to meet the estimated shortfall, proceeds of the Loan which are then allocated to another Category and which in the opinion of the Bank are not needed to meet other expenditures; and (ii) if such realloca- tion cannot fully meet the estimated shortfall, reduce the dis- bursement 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 Bank 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 Loan and the Bank may, without in any way restricting or limiting any other right, power or remedy of the Bank under the Loan Agreement, by notice to the Borrower, cancel such amount of the Loan as, in the Bank's reasonable opinion, represents the amount of such expenditures which would otherwise have been eligible for financing out of the proceeds of the Loan. - 17 - 6. If the conditions precedent referred to in subparagraph 3 (b) of this Schedule are not fulfilled on or before May 31, 1979, or such other date as the Borrower and the Bank may agree, the Bank may, by agreement with the Borrower, terminate the right of the Borrower to make withdrawals in respect of expendi- tures under Categories (2) and (3) of paragraph 1 of this Schedule. Upon reaching such agreement the amount of the Loan corresponding to such Categories shall be cancelled and the commitment charge (referred to in Section 2.05 hereof) applicable to such cancelled portion of the Loan shall cease to accrue. - 18 - SCHEDULE 2 Description of the Project The Project consists of the following Parts: Part A: Rubber Estates (i) Clearing of about 7,900 ha of land, planting of such land with rubber and initial maintenance of such plantings until mid-1982, at the following locations: - Kompina Estate, to be established in the Mungo Division at about 55 kilometers North of Douala: about 5,000 ha; - Malende/Meanja Estate: about 1,000 ha; - Mbonge Estate: about 1,000 ha; and - Tombel Estate: about 900 ha. (ii) Provision of infrastructure required for said Estates, including offices, stores, housing, schools, social facilities and utilities, about 35 km of access roads, a ferry at Kompina Estate, and two latex processing factories, each with a capacity of about 17 tons per day, at Mbonge and Tombel Estates, respectively. (iii) Provision of vehicles, equipment and materials required for said Estates. Part B: West Coast Oil Palm Estates (i) Clearing of about 600 ha of land, planting of such land with oil palm and initial maintenance of such plantings until mid-1982, in an area adjoining the Cameroon Development Corporation's existing oil palm estates between Debundscha and Idenau. (ii) Provision of additional infrastructure required for the oil palm estates to be expanded under Part B (i) of the Project, including an office and - 19 - storage facility, housing, a school, social facili- ties and utilities. (iii) Provision of vehicles, equipment and materials required for said oil palm estate plantings. Part C: Outgrower Development (i) Establishment of smallholder programs covering the planting of about 1,000 ha of rubber (mainly in the areas of the Kompina and Malende Estates) and about 1,000 ha of oil palms (mainly in the area of the Mondoni/Mungo Estate) on land cleared by smallholders, including extension services to such smallholders. (ii) Financial assistance to smallholders under Part C (i) of the Project, partly in cash for labor and partly through provision, on credit, of the inputs required for the establishment of their rubber and oil palm plantings. Part D: Technical Support for the Cameroon Development Corpora- tion Management Strengthening and support of the Cameroon Development Corporation's technical management. Part E: Preparation of the Future Expansion Program of the Cameroon Development Corporation - Definition of the third expansion program of the Cameroon Development Corporation through the topo- graphical and pedological surveys necessary to show the potentialities of the soils with respect to both the present crops of the Cameroon Development Corpo- ration (inter alia palm oil and rubber) and new crops which might be developed under the ecological con- ditions of the area (inter alia coconuts). - Preparation of feasibility studies required for projects to be included in the above program. - Within the framework of the above objectives, rubber tapping research, establishment of about 50 ha of - 20 - coconut seed gardens, about 28 ha of coconut trial plots and a field laboratory for coconut research, and provision of access infrastructure to the devel- opment area of about 10,000 to 12,000 ha North-West of Mount Cameroon, including construction of a bridge across the Meme River and of an access road of about 40 km. Part F: West Coastal Region Master Plan Preparation of a master plan for the agricultural development of the Western coastal zone North of the Wouri River for the purpose of, inter alia, selecting areas for future estate and smallholder tree crop plantings, establishing a long-range agricultural development program and examining related environmental, developmental and infrastructural problems in said zone. The Project is expected to be completed by June 30, 1982. - 21 - SCHEDULE 3 Amortization Schedule Payment of Principal Date Payment Due (expressed in dollars)* On each February 15 and August 15, beginning August 15, 1983, through February 15, 1998 500,000 * To the extent that any portion of the Loan is repayable in a currency other than dollars (see General Conditions, Section 4.02), the figures in this column represent dollar equivalents determined as for purposes of withdrawal. - 22 - Premiums on Prepayment The following percentages are specified as the premiums payable on repayment in advance of maturity of any portion of the principal amount of the Loan pursuant to Section 3.05 (b) of the General Conditions: Time of Prepayment Premium Not more than three years before maturity 1.20% More than three years but not more than six years before maturity 2.35% More than six years but not more than eleven years before maturity 4.35% More than eleven years but not more than sixteen years before maturity 6.30% More than sixteen years but not more than eighteen years before maturity 7.10% More than eighteen years before maturity 7.90% - 23 - SCHEDULE 4 Procurement A. International Competitive Bidding 1. Except as provided in Parts B and D hereof, contracts for the purchase of goods or for civil works shall be procured in accor- dance with procedures consistent with those set forth in the "Guidelines for Procurement under World Bank Loans and IDA Cred- its" published by the Bank in March 1977 (hereinafter called the Guidelines), on the basis of international competitive bidding as described in Part A of the Guidelines. 2. To the extent feasible, vehicles, equipment and materials shall be grouped for purposes of bidding so as to permit bulk procurement. B. Other Procurement Procedures Contracts estimated to cost the equivalent of $100,000 or less may be procured on the basis of competitive bidding adver- tised locally and in accordance with local procedures satisfactory to the Bank. C. Evaluation and Comparison of Bids for Goods; Preference for Domestic Manufacturers 1. For the purpose of evaluation and comparison of bids for the supply of goods except those to be procured in accordance with local procedures: (i) bidders shall be required to state in their bid the c.i.f. (port of entry) price for imported goods, or the ex-factory price for domestically-manufactured goods; (ii) customs duties and other import taxes on imported goods, and sales and similar taxes on domestically-supplied goods, shall be excluded; and (iii) the cost to the Borrower, the Cameroon Development Corporation or FONADER, as the case may be, of inland freight and other expenditures incidental to the delivery of goods to the place of their use or installation shall be included. 2. Goods manufactured in Cameroon may be granted a margin of preference in accordance with, and subject to, the following provisions: (a) All bidding documents for the procurement of goods shall clearly indicate any preference which will be granted, - 24 - the information required to establish the eligibility of a bid for such preference and the following methods and stages that will be followed in the evaluation.and comparison of bids. (b) After evaluation, responsive bids will be classified in one of the following three groups: (1) Group A: bids offering goods manufactured in Cameroon if the bidder shall have established to the satisfaction of the Borrower or the Cameroon Development Corporation, as the case may be, and the Bank that the manufacturing cost of such goods includes a value added in Cameroon equal to at least 20% of the ex-factory bid, price of such goods. (2) Group B: all other bids offering goods manufactured in Cameroon. (3) Group C: bids offering any other goods. (c) All evaluated bids in each group shall be first compared among therselves, excluding any customs duties and other import taxes on goods to be imported and any sales or similar taxes on goods to be supplied domestically, to determine the lowest evaluated bid of each group. Such lowest evaluated bids shall then be compared with each other, and if, as a result of this comparison, a bid from group A or group B is the lowest, it shall be selected for the award. (d) If, as a result of the ccmparison under paragraph (c) above, the lowest bid is a bid from group C, all group C bids shall be further compared with the lowest evaluated bid from group A after adding to the c.i.f. bid price of the imported goods offered in each group C bid, for the purpose of this further comparison only, an amount equal to (i) the amount of customs duties and other import taxes which a non-exempt importer would have to pay for the importation of the goods offered in such group C bid; or (ii) 15% of the c.i.f. bid price of such goods if said customs duties and taxes exceed 15% of such price. If the group A bid in such further comparison is the lowest, it shall be selected for the award; if not, the bid from group C which as a result of the comparison under paragraph (c) is the lowest evaluated bid shall be selected. - 25 - D. Procurement Without Contracting Civil works consisting of land clearing, construction of roads, minor estate facilities and field development works may be carried out by force account by the Cameroon Development Corporation. E. Review of Procurement Decisions by the Bank 1. Review of invitations to bid and of proposed awards and final contracts: With respect to all contracts estimated to cost the equiva- lent of $100,000 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 Bank for its comments, and such modifications shall be made in the said documents or procedures as the Bank shall reasonably request. Any further modification to the bidding documents shall require the Bank's concurrence before it is issued to the prospective bidders. (b) After bids have been received and evaluated and before a final decision on the award is made, the Bank 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 informa- tion as the Bank shall reasonably request, shall be furnished to the Bank, in sufficient time for its review. The Bank shall, if it determines that the intended award would be inconsistent with the Guidelines or this Schedule, promptly inform the Borrower, the Cameroon Development Corporation or FONADER, as the case may be, and state the reasons for such determination. (c) The terms and conditions of the contract shall not, without the Bank's concurrence, materially differ from those on which bids were asked or prequalification invited. (d) Two conformed copies of the contract shall be furnished to the Bank promptly after its execution and prior to the submis- sion to the Bank of the first application for withdrawal of funds from the Loan Account in respect of such contract. - 26 - 2. With respect to each contract to be financed out of the proceeds of the Loan 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 Bank shall reasonably request, shall be fur- nished to the Bank promptly after the execution of such contract and prior to the submission to the Bank of the first application for withdrawal of funds from the Loan Account in respect of such contract. The Bank shall, if it determines that the award of the contract was not consistent with the Guidelines or this Schedule, promptly inform the Borrower, the Cameroon Development Corporation or FONADER, as the case may be, and state the reasons for such determination.