Cameroon - Second Western Province Rural Development Project : Loan 2406 - Loan Agreement - Conformed

OFFICIAL LO,N NUMBER 2406 CM DOCUMENTS Loan Agreement (Second Western Province Rural Development Project) between REPUBLIC OF CAMEROON and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT Dated 18 , 1984 LOAN NUMBER 2406 CM LOAN AGREEMENT AGREEMENT, dated j 1 , 1984, between REPUBLIC OF CAMEROON (hereinafter called the Borrower) and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT (hereinafter called the Bank). WHEREAS (A) the Borrower has requested the Bank to assist in the financing of the foreign exchange cost of the Project described in Schedule 2 to this Agreement by making the Loan as hereinafter provided; (B) the Borrower has applied to the International Fund for Agricultural Development (hereinafter called the Fund) for a loan (hereinafter called the Fund Loan) in an amount equivalent to thirteen million seven hundred thousand Special Drawing Rights (SDR 13,700,000) to assist in financing the Project on the terms and conditions set forth in an agreement (hereinafter called the Fund Loan Agreement) to be entered between the Borrower and the Fund; (C) the Fund has appointed the Bank as Cooperating Institu- tion to administer the Fund Loan and the Bank is prepared to accept such appointment; (D) Parts A through H (a) of the Project will be carried out by Union Centrale des Coop6ratives Agricoles de l'Ouest (hereinafter called UCCAO) with the Borrower's assistance and, as part of such assistance, the Borrower will make available to UCCAO part of the proceeds of the Loan and the Fund Loan as hereinafter provided; 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 the Project Agreement of even date herewith between the Bank and UCCAO; 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 October 27, 1980, with -2- the same force and effezt as if they were ful!,- set forth herein (said General Conditions Applicable to Loan and Guarantee Agreements of the Bank 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 addi- tional terms have the following meanings: (a) "Fund Loan Account" means the loan account established under the Fund Loan Agreement. (b) "Project Agreement" means the agreement between the Bank and UCCAO of even date herewith, as the same may be amended from time to time, and such term includes all schedules to the Project Agreement and all agreements supplemental to the Project Agreement. (c) "UCCAO" means the Union Centrale des Cooperatives Agricoles de l'Ouest established and operating pursuant to the Borrower's Law No. 73/15, dated December 7, 1973, and Decree No. 74/874, dated October 29, 1974, as such Law and Decree may be amended from time to time, and UCCAO Statuts. (d) "TCCAO Statuts" means the Statuts of UCCAO dated March 22, 1978 and amended on November 25, 1982, as such Statuts may be further amended from time to time. (e) "MINAGRI' means the Borrower's ministry responsible for agriculture. (f) "Ggnie Rural" means MINAGRI's Direction du G4nie Rural, or any successor thereto. (g) "IRA" means Institut pour la Recherche Agricole, an institute within the Borrower's D4legation Ggnerale a la Recherche Scientifique et Technique. (h) "DEP" means MINAGRI's Direction des Etudes et 2rojets, or any successor thereto. (i) "FONADER" means Fonds National de Developpement Rural of the Borrower, or any successor thereto. -3- (j) "MINEQ" means the Borrower's ministry responsible for road construction and maintenance. (k) "Subsidiary Loan Agreement" means the agreement to be entered into between the Borrower and UCCAO pursuant to Section 4.01 (d) of this Agreement, as the same may be amended from time to time, and such term includes all schedules to the Subsidiary Loan Agreeinent. (1) "Project Area" means the whole area of the Western Province. (m) "CFA franc" and the letters "CFAF" mean the Franc de la Communaute Financiere Africaine, the currency of the Borrower. (n) "Fee" means the fee referred to in Section 2.03 hereof. (o) "ha" means hectare. (p) "Project Account" means the account opened by UCCAO under Section 2.01 of the Project Agreement (Western Highlands Rural Development Project), dated April 17, 1978, between the Association and UCCAO (Credit No. 784 CM). (q) "Category A feeder roads" means the feeder roads in- cluded in the project described in Schedule 2 to the Loan Agree- ment (Feeder Roads Project), dated December 7, 1977, between the Borrower and the Bank (Loan No. 1494 CM). (r) "Category B feeder roads" means the feeder roads included in this Project. (s) "Revolving Credit Fund" means the fund referred to in Section 2.01 (b)(i)(B) of the Project Agreement. ARTICLE II The Loan Section 2.01. (a) 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 twenty-one million five hundred thousand dollars ($21,500,000). -4- (b) The amount of the Loan may be withdrawn from the Loan Account in accordance with the provisions of Article III of this Agreement. Section 2.02. The Closing Date shall be December 31, 1990 or such later date as the Bank shall establish. The Bank shall promptly notify the Borrower of such later date. Section 2.03. (a) The Borrower shall pay to the Bank a fee equivalent to fifty-three thousand six hundred sixteen dollars ($53,616). (b) On or promptly after the Effective Date, the Bank shall, on behalf of the Borrower, withdraw from the Loan Account and pay to itself the amount of the said fee in such currency or currencies as the Bank shall determine. Section 2.04. 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 2.05. (a) The Borrower shall pay interest on the principal amount of the Loan withdrawn and outstanding from time to time at a rate per annum for each Interest Period equal to one half percent per annum above the Cost of Qualified Borrowings for the last Semester ending prior to the commencement of such Interest Period. (b) As soon as practicable after the end of each Semester, the Bank shall notify the Borrower of the Cost of Qualified Borrowings for such Semester. (c) For the Interest Period commencing on /u6w the interest rate shall be /10.08 % per annum. (d) For purposes of this Section: (i) "Interest Period" means the six-month period commencing on each date specified in Section 2.06 of this Agreement, including the Interest Period in which this Agreement is signed. -5- (ii) "Cost" of Qualified Borrowings means the cost, expressed as a percentage per annum, as reasonably determined by the Bank, provided that the amount of $8,520.5 million referred to in (iii) (B) hereunder shall be reckoned at a cost of 10.93% per annum. (iii) "Qualified Borrowings" means (A) outstanding borrowings of the Bank drawn down after June 30, 1982; and (B) until July 1, 1985, the amount of $8,520.5 million (representing borrowings of the Bank between July 1, 1981 and June 30, 1982) less any part thereof repaid earlier than July 1, 1985. (iv) "Semester" means the first six months or the second six months of a calendar year. Section 2.06. Interest and other charges shall be payable semiannually on March 15 and September 15 in each year. Section 2.07. 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 Allocation and Withdrawal of Proceeds of Loan and Fund Loan Section 3.01. Subject to the rights of suspension and cancellation set forth in the Loan Agreement and the Fund Loan Agreement, the amount of the Loan and the amount of the Fund Loan may be withdrawn from the Loan Account and the Fund Loan Account, respectively, in accordance with the provisions of this Agreement and with the allocation of the proceeds of the Loan and the Fund Loan set forth in Schedule 1 to this Agreement, as such alloca- tion may be modified from time to time pursuant to the provisions of such Schedule or by further agreement between the Borrower, the Bank and the Fund. Section 3.02. The Borrower shall be entitled to make with- drawals from the Loan Account and from the Fund Loan Account for expenditures made (or, if the Bank and the Fund 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 Loan and the Fund Loan. -6- Section 3.03. (a) When the Borrower shall desire to withdraw any amount of the Loan or the Fund Loan, the Borrower shall deliver to the Bank a written application in such form and containing such statements and agreements as the Bank or the Fund shall reasonably request. Applications for withdrawal, with the necessary documentation as hereinafter provided shall, except as the Borrower, the Bank and the Fund shall otherwise agree, be made promptly in relation to expenditures for the Project. (b) The Borrower shall furnish to the Bank such documents and other evidence in support of the application as the Bank or the Fund shall reasonably request, whether before or after the Bank shall have approved any withdrawal requested in the applica- tion. (c) Each application and the accompanying documents and other evidence must be sufficient in form and substance to satisfy the Bank or the Fund that the Borrower is entitled to withdraw from the Loan Account or the Fund Loan Account the amount applied for and that such amount is to be used only for the purposes of the Project. Section 3.04. Each such application by the Borrower for withdrawal shall be deemed to be a request to withdraw funds from the Loan Account and from the Fund Loan Account and the funds to be withdrawn pursuant to such application shall be apportioned by the Bank, as nearly as practicable in the circumstances, between the Loan and the Fund Loan in the ratio of 50:50, or such other ratio as shall be agreed between the Bank and the Fund; provided, however, that, if such application shall be made in respect of expenditures that shall be financed out of the proceeds of the Loan or the Fund Loan only, such application shall be deemed to be a request to withdraw funds from the Loan Account or the Fund Loan Account only. Section 3.05. When the Bank shall have approved an application by the Borrower for withdrawal, the Bank shall: (a) pay the amount, if any, which the Borrower is entitled to withdraw from the Loan Account to or on the order of the Borrower in accordance with the provisions of the Loan Agreement; and/or (b) promptly notify the Fund that it has received an application for withdrawal from the Fund Loan Account in the -7- aggregate amount specified in such notice, that it has approved payment of the portion, if any, to be withdrawn from the Loan Account in the amount set forth in such notice, and that the portion to be withdrawn from the Fund Loan Account in the amount set forth in such notice is eligible for payment by the Fund. Section 3.06. If at any time the amount of the Loan or the Fund Loan shall have been fully withdrawn or cancelled, applica- tions by the Borrower for further withdrawals shall be deemed to be requested for withdrawal of the full amount applied for from the Fund Loan Account or the Loan Account only, and the provi- sions of this Article III except for Section 3.04 hereof shall continue to apply, mutatis mutandis, until the full amount credited or to be credited to such Account shall have been withdrawn or cancelled. Section 3.07. Upon the Borrower's request and upon such terms as shall be agreed between the Borrower and the Bank, the Bank may, on behalf and for the account of the Fund, enter into special commitments to pay amounts out of the proceeds of the Fund Loan to the Borrower or others in respect of the cost of goods required by the Project, subject to the provisions of this Agreement concerning the allocation and apportionment of the proceeds of the Fund Loan. The Fund has advised the Bank that any such special commitment shall, once it has been notified to the Fund, constitute an obligation on the part of the Fund to pay, notwithstanding any subsequent suspension or cancellation of the Fund Loan, the amount to be disbursed out of the proceeds of the Fund Loan in fulfillment of such special commitment. Section 3.08. Except as the Bank and the Fund shall other- wise agree, procurement of the goods and civil works required for the Project and to be financed out of the proceeds of the Loan or the Fund Loan shall be governed by the provisions of the Schedule to the Project Agreement. Section 3.09. UCCAO is designated as representative of the Borrower for the purpose of taking any action required or per- mitted to be taken under the provisions of Article III of this Agreement and Article V of the General Conditions, in regard to the Categories of the table set out in paragraph 1 of Schedule 1 hereto, save for the Categories (1)(b) and (c) and 3(e) thereof. -8- ARTICLE IV Execution of the Project Section 4.01. (a) The Borrower shall carry out Part H (b) and (c) of the Project through DEP 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 UCtAO to perform in accordance with the provisions of the Project Agreement and the Subsidiary Loan Agreement all the obligations of UCCAO therein set forth, shall take or cause to be taken all action, including the provision of funds, facilities, services and other resources, necessary or appropriate to enable UCCAO to perform such obligations, and shall not take or permit to be taken any action which would prevent or interfere with such performance. In particular, the Borrower shall: Ci) cause its services and agencies referred to in paragraph (b) (ii) of Section 2.01 of the Project Agreement to enter into Project execution arra>ge- ments with UCCAO as provided in said Section, to carry out their respective obligations regarding the execution of the Project pursuant to such arrangements with due diligence and efficiency, and to cooperate effectively with UCCAO in carrying out such obligations; and (ii) ensure that MINAGRI shall second qualified and experienced bottomland development technicians and agricultural extension workers (including about 24 intendants and about 12 female extension workers) to UCCAO as required for the execution of the PToject. (c) The Borrower shall, for purposes of the Project, make available to UCCAO, as a grant, the proceeds of the Loan and the Fund Loan allocated from time to time to Categories (1)(a), (2), (3)(a) and (d), (4)(a), (5)(a) and (c), and (6) of the table set forth in paragraph 1 of Schedule 1 to this Agreement. -9- (d) The Borrower shall relend to UCCAO the proceeds of the Loan and the Fund Loan allocated from time to time to Categories (3)(b) and (c), (4)(b) and (5)(b) of the table set forth in para- graph 1 of Schedule 1 to this Agreement under a subsidiary loan agreement to be entered into between the Borrower and UCCAO under terms and conditions which shall have been approved by the Bank, including crediting by UCCAO of any amounts repaid to UCCAO from the credits made under Part D of the Project to a special account to be designated by the Borrower for financing cooperatives equipment at the national level. (e) The Borrower shall exercise its rights under the Subsi- diary Loan Agreement 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 shall otherwise agree, the Bor- rower shall not assign, amend, abrogate or waive the Subsidiary Loan Agreement or any provision thereof. Section 4.02. Without any limitation upon its obligations under Section 4.01 of this Agreement, the Borrower: (a) undertakes, for purposes of Parts A, C, E, F, G and H (a) of the Project, to fund the Project Account in addition to the initial amount referred to in Section 7.01 (f) of this Agree- ment, as follows: (i) deposit or cause to be deposited in the Project Account the amounts withdrawn from the Loan Ac- count and the Fund Loan Account in respect of ex- penditures paid out of the Project Account; (ii) deposit, until completion of the Project, in the Project Account, at the beginning of each quarter of its fiscal year, the Borrower's other contribu- tions towards expenditures under Parts A, C, E, F, G and H (a) of the Project during the year con- cerned; and (iii) take all action necessary to ensure that, at the beginning of each quarter of its fiscal year and until completion of the Project, the aggregate amount available in the Project Account shall not be less than four hundred million CFA francs (CFAF 400,000,000); - 10 - (b) shall furnish or cause to be furnished to UCCAO, to the extent required for the carrying out of Parts B and D of the Pro- ject, the resources necessary (1) for the supply of UCCAO member cooperatives and the members of such cooperatives with agricul- tural inputs and equipment (Part B), and (2) for the expansion or construction of coffee factories and storage facilities (Part D); and (c) for purposes of Part B (b) of the Project, deposit in FONADER, not later than August 31 of each year, the amount of the Borrower's subsidy to be applied towards the purchase cost of fertilizers and crop protection chemicals and ensure that FONADER pays to the suppliers of said fertilizers and crop protection chemicals the portion of their invoices corresponding to the amount of said subsidy. Section 4.03. Without any limitation upon its obligations under Section 4.01 of this Agreement, the Borrower shall: (a) ensure that UCCAO shall participate in the procurement of fer- tilizers and crop protection chemicals required for the Project; and (b) take all measures necessary to ensure that said fertil- izers and crop protection chemicals are delivered to farmers in due time and in adequate qualities and quantities. Section 4.04. In order to assist the Borrower in carrying out Part H (b) and (c) of the Project, the Borrower shall employ consultants- inter alios, not later than September 30, 1984, or such other date as the Bank may agree, a chief of the central evaluation unit at DEP- whose qualifications, experience and terms and conditions of employment shall be satisfactory to the Bank, such consultants to be selected in accordance with princi- ples and procedures satisfactory to the Bank on the basis of the "Guidelines for the Use of Consultants by World Bank Borrowers and by the World Bank as Executing Agency" published by the Bank in August 1981. Section 4.05. (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 and the Fund Loan against hazards incident to the acquisition, transportation and delivery thereof to the place of use or installation, and for such insurance any indemnity shall be payable in a currency free- ly usable by the Borrower to replace or repair such goods. - 11 - (b) The Borrower shall cause all goods and services fi- nanced out of the proceeds of the Loan and the Fund Loan to be used exclusively for the purposes of the Project. Section 4.06. (a) The Borrower shall furnish to the Bank, promptly upon their preparation, the plans, specifications, reports, contract documents and construction and procurement schedules for Part H (b) and (c) 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 records and procedures adequate to record and monitor the progress of Part H (b) and (c) of the Project (including its cost and the benefits to be derived from it), to identify the goods and services financed out of the proceeds of the Loan and the Fund Loan, and to disclose their use in Part H (b) and (c) of the Project; (ii) shall enable the Bank's representatives to visit the facilities and construction sites included in Part H (b) and (c) of the Project and to exa- mine the goods financed out of the proceeds of the Loan and the Fund Loan and any relevant records and documents; and (iii) shall furnish to the Bank at regular intervals all such information as the Bank shall reasonably request concerning Part H (b) and (c) of the Project, its cost and, where appropriate, the benefits to be derived from it, the expenditure of the proceeds of the Loan and the Fund Loan and the goods and services financed out of such proceeds. (c) Upon the award by the Borrower of any contract for goods, works or services to be financed out of the proceeds of the Loan, the Bank may publish a description thereof, the name and nationality of the party to whom the contract was awarded and the contract price. (d) The Borrower shall furnish to UCCAO all such informa- tion in respect of Part H (b) and (c) of the Project as UCCAO requires to fulfill its obligations under Section 2.05 (d) of the Project Agreement. Section 4.07. (a) The Borrower shall maintain or cause to be maintained separate accounts adequate to reflect in accordance with consistently maintained sound accounting practices the operations, resources and expenditures, in respect of Part H (b) and (c) of the Project, of the departments or agencies of the Borrower responsible for carrying out such Part of the Project or any part thereof. - 12 - (b) Without limitation on the foregoing, the Borrower shall: (i) maintain or cause to be maintained separate accounts reflecting all expenditures on account of which withdrawals are requested for Part H (b) and (c) of the Project from the Loan Account and the Fund Loan Account on the basis of statements of expenditure; (ii) retain, until one year after the Closing Date, all records (contracts, orders, invoices, bills, receipts and other documents) evidencing the expenditures on account of which withdrawals are requested for Part H (b) and (c) of the Project from the Loan Account and the Fund Loan Account on the basis of statements of expenditure; and (iii) enable the Bank's and the Fund's representatives to examine such records. (c) The Borrower shall: (i) have the accounts referred to in paragraphs (a) and (b) of this Section for each fiscal year audited, in accordance with appropriate auditing principles con- sistently applied, by independent auditors acceptable to the Bank; (ii) furnish to the Bank and the Fund, as soon as avail- able, but in any case not later than four months after the end of each such year, a certified copy of the report of such audit by said auditors, of such scope and in such detail as the Bank shall have reasonably requested, including, without limitation to the foregoing, a separate opinion by said auditors in respect of the expenditures and records referred to in paragraph (b) of this Section as to whether the proceeds of the Loan and the Fund Loan withdrawn for Part H (b) and (c) of the Project from the Loan Account and the Fund Loan Account on the basis of statements of expenditure have been used for the purpose for which they were provided; and (iii) furnish to the Bank and the Fund such other information concerning said separate accounts, records and expen- ditures and the audit thereof as the Bank shall from time to time reasonably request. ARTICLE V Other Covenants Section 5.01 (a) It is the policy of the Bank, in making loans to, or with the guarantee of, its members not to seek, in normal circumstances, special security from the member concerned but to ensure that no other external debt shall have priority over its loans in the allocation, realization or distribution 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 - 13 - external debt, which will or might result in a priority for the benefit of the creditor of such external debt in the allocation, 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 ol, 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 or as security for the payment of debt incurred for the purpose of financing the purchase 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 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 5.02. The Borrower shall take or cause to be taken all action necessary to ensure adequate maintenance of the water points in the Project Area, including those constructed under Part E of the Project, and shall provide or cause to be provided the funds required for this purpose. Section 5.03. The Borrower shall cause to be taken all action necessary to recover the maintenance costs of the works carried out under Part E of the Project from the beneficiaries thereof, through labor contributions and payment of an annual maintenance fee. -14- Section 5.04. The Borrower and the Bank shall, at regular intervals, exchange views with respect to problems relating to inputs supply and agricultural pricing policies in Cameroon. Section 5.05. The Borrower shall ensure that the periodic revisions of the price fixing forlula ("barame") applicable to coffee in Cameroon shall be sufficient to cover the costs borne by the cooperatives, in particular the primary marketing and processing costs. Section 5.06. The Borrower shall, not later than November 30, 1984, or such other date as the Bank may agree, take all appropriate steps to ensure that the minimum coffee-area to be replanted by a farmer in order to benefit from the Borrower's coffee-planting allowance be reduced from 1 ha to 0.25 ha. ARTICLE VI Remedies of the Bank Section 6.01. For the purposes of Section 6.02 of the General Conditions, the following additional events are specified pursuant to paragraph (k) thereof: (a) UCCAO shall have failed to perform any of its obligations under the Project Agreement. (b) As a result of events which have occurred after the date of the Loan Agreement, an extraordinary situation shall have arisen which shall make it improbable that UCCAO will be able to perform its obligations under the Project Agreement. (c) The Borrower's Law or Decree referred to in Section 1.02 (c) hereof or the UCCAO Statuts or any provision thereof shall have been amended, suspended, abrogated, repealed or waived so as to affect materially and adversely the ability of UCCAO to perform any of its obligations under the Project Agreement. (d) The Borrower or any other authority having jurisdiction shall have taken any action for the dissolution or disestablish- ment of UCCAO or for the suspension of its operations. (e) (i) Subject to subparagraph (ii) of this paragraph: (A) the right of the Borrower to withdraw the proceeds of any grant or loan (including - 15 - the Fund 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 agreement providing therefor; or (B) any such loan shall have become due and pay- able prior to the agreed maturity thereof. (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 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. (f) Any representation made by UCCAO 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. Section 6.02. For the purposes of Section 7.01 of the General Conditions, the following additional events are specified pursuant to paragraph (d) thereof: (a) any event specified in paragraph (a) of Section 6.01 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; (b) any event specified in paragraph (c) or (d) of Section 6.01 of this Agreement shall occur; and (c) the event specified in paragraph (e)(i)(B) of Section 6.01 hereof shall occur, subject to the proviso of paragraph (e)(ii) of that Section. - 16 - ARTICLE VII Effective Date; Termination Section 7.01. 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 Condi- tions: (a) the execution and delivery on behalf of the Borrower of the Fund Loan Agreement have been duly authorized or ratified by all necessary governmental action and all other conditions prece- dent to the effectiveness of the Fund Loan Agreement (other than the effectiveness of this Agreement) have been duly fulfilled; (b) the Fund has appointed the Bank as Cooperating Institu- tion to administer the Fund Loan on terms and conditions accept- able to the Bank; (c) the financial controller, the director for production and the technical director referred to in Section 2.02 of the Project Agreement have been employed; (d) the Borrower has transferred the technical and organi- zational responsibility of the extension service in the Project Area to TJCCAO; (e) the Subsidiary Loan Agreement has been executed on behalf of the Borrower and UCCAO; and (f) the Borrower has deposited in the Project Account such amounts as shall be required to bring the amounts credited thereto to four hundred million CFA francs (CFAF 400,000,000). Section 7.02. 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, namely, that: (a) the Project Agreement has been duly authorized or ratified by UCCAO, and is legally binding upon UCCAO in accordance with its terms; and (b) the Subsidiary Loan Agreement has been duly authorized or ratified by the Borrower and UCCAO, and is legally binding upon the Borrower and UCCAO in accordance with its terms. - 17 - Section 7.03. The date 61& 299 , is hereby specified for the purposes of Section 12.04 of the General Conditions. Section 7.04. If (a) the Fund Loan Agreement shall have come into force and effect and the Loan Agreement shall have failed to come into force and effect by the date specified in Section 7.03 of this Agreement or a later date established by the Bank for the purposes of Section 12.04 of the General Conditions, or (b) the entire principal amount of the Loan withdrawn from the Loan Account and all charges which shall, have accrued on the Loan shall have been paid before the Fund Loan Agreement shall have terminated, then, notwithstanding the provisions of Sections 12.04 and 12.05 of the General Conditions, the Loan Agreement shall be deemed to be, or to remain, in force and effect but only to the extent required for the purpose of implementing the Fund Loan Agreement and of orderly settlement of matters of mutual interest to the parties thereunder, subject to such modifications of the Loan Agreement as shall be agreed between the Borrower, the Bank and the Fund for such purposes. Section 7.05. If (a) the Fund Loan Agreement shall terminate in accordance with its terms before the Loan Agreement shall have terminated, or (b) the Bank shall notify the Borrower that its appointment as Cooperating Institution under the Fund Loan Agreement has terminated, the provisions of this Agreement shall, to the extent that they relate to the Fund Loan, forthwith terminate; provided, however, that in the case described in the foregoing clause (b) such termination shall apply only to the responsibilities of the Bank as such Cooperating Institution. ARTICLE VIII Representative of the Borrower; Addresses Section 8.01. Except as provided in Section 3.09 hereof, the Minister of the Borrower responsible for plan and management is designated as representative of the Borrower for the purposes of Section 11.03 of the General Conditions. Section 8.02. The following addresses are specified for the purposes of Section 11.01 of the General Conditions: - 18 - For the Borrower: Ministry of Plan and Management Yaound6 Republic of Cameroon Cable address: Telex: MINPI 8268-KN Yaound& With copy to: Ministry of Financial Affairs Yaoundf Republic of Cameroon Cable address: Telex: MINFI 8260-KN YaoundS 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) - 19 - 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. REPUBLIC OF CAMEROON By /&/ 1aXV6ol Authorized Representative INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT By /40/ Regional Vice President Western Africa - 20 - SCHEDULE I Withdrawal of the Proceeds of the Loan and the Fund Loan 1. The table below sets forth the Categories of items to be financed out of the proceeds of the Loan and the Fund Loan, the allocation of amounts of the Loan and the Fund Loan to each Category and the percentage of expenditures for items so financed in each Category: Amount of the Amount of the Loan Allocated Fund Loan % of (Expressed Allocated Expendi- in Dollar (Expressed in tures to be Category Equivalent) SDR Equivalent) Financed (1) Consultants' services for: (a) Parts A 2,500,000 2,270,000 ) and H(a) ) of the ) Project ) ) 95% (b) Part H(b) 380,000 ) of the ) Project ) (c) Part H(c) 250,000 ) of the ) Project ) (2) Fellowships 900,000 95% for Part A of the Pro- ject (3) Vehicles, equipment and main- tenance for: - 21 - AMount of the Amount of the Loan Allocated Fund Loan % of (Expressed Allocated Expendi- in Dollar (Expressed in tures to be Category Equivalent) SDR Equivalent) Financed (a) Parts A, 3,400,000 2,830,000 ) C, E, G ) and H(a) ) of the ) Project ) (b) Part B(a) 700,000 660,000 ) of the ) Project ) (c) Part D 6,000,000 ) of the ) 85% Project ) (d) Part F 1,300,000 1,230,000 ) of the ) Project ) (e) Part H(b) 100,000 ) of the ) Project ) (4) Fertilizers, seeds and chemicals for: (a) Parts A(b) 1,000,000 940,000 ) and C(b) ) of the ) Project ) ) 70% (b) Part B(b) 3,000,000 2,360,000 ) of the ) Project ) (5) Civil works for: - 22 - Amount of the Amount of the Loan Allocated Fund Loan % of (Expressed Allocated Expendi- in Dollar (Expressed in tures to be Category Equivalent) SDR Equivalent) Financed (a) Parts A, 300,000 280,000 ) C(b), E ) and G ) of the ) Project ) ) 70% (b) Part D 1,100,000 ) of the ) Project ) (c) Part F 200,000 190,000 ) of the ) Project ) (6) Salaries and 1,890,000 10% benefits for extension per- sonnel (7) Fee 53,616 Amount due pursuant to Section 2.03 (a) of this Agree- ment (8) Unallocated 696,384 670,000 TOTAL 21,500,000 13,7001,000 2. The disbursement percentages 'have been calculated in com- pliance with the policy of the Bank and the Fund that no proceeds of the Loan or the Fund Loan shall be disbursed on account of payments for taxes levied by, or in the territory of, the Bor- rower 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 - 23 - of the proceeds of the Loan or the Fund 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 and the Fund. 3. Notwithstanding the provisions of paragraph I above: (i) no withdrawals shall be made in respect of payments made for expenditures prior to the date of this Agreement or the date of the Fund Loan Agreement, whichever shall be the later; and (ii) no withdrawals shall be made in respect of: (1) Categories (3)(d) and (5)(c), unless a roads engineer and a mechanic have been employed by UCCAO; (2) Categories (3)(d) and (5)(c) in any given fiscal year, unless the Bank shall have received by the beginning (July 1) of such fiscal year: (A) an annual "Category B" feeder roads construction and maintenance program of UCCAO for such fiscal year satisfactory to the Bank; (B) evidence satisfac- tory to the Bank showing that the "Category A" feeder roads related to such "Category B" feeder roads have been constructed; and (C) evidence satisfactory to the Bank showing that the Feeder Roads Unit created under the Feeder Roads Project (Loan No. 1494 CM) shall continue to operate adequately; and (3) Categories (3)(c) and (5)(b) in respect of UCCAO or of any of the member cooperatives listed in Part D of the Project, unless the Bank shall have received in respect of UCCAO or any such coopera- tive, as the case may be: (A) evidence satisfac- tory to the Bank showing that UCCAO or any such cooperative has taken appropriate measures satis- factory to the Bank to improve its administrative, accounting and financial procedures; and (B) a detailed investment plan of UCCAO or any such cooperative in respect of the investments to be made by it for purposes of Part D of the Project. - 24 - 4. Notwithstanding the allocation of an amount of the Loan or the Fund Loan or the disbursement percentages set forth in the table in paragraph 1 above, and without limitation upon the pro- visions of Section 3.04 of this Agreement, if the Bank has reasonably estimated that the amount of the Loan or the Fund Loan then allocated to any Category will be insufficient to finance the agreed percentage of all expenditures in that Category, 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 or Fund Loan which are then allocated to another Category and which in the opinion of the Bank are not needed to meet other expenditures, provided, however, that no such reallocation of proceeds of the Fund Loan shall be made to Categories (3)(c) and (5)(b): and (ii) if such reallocation cannot fully meet the estimated shortfall, reduce the disburse- ment 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 pro- curement 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 Fund 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 or the Fund Loan Agreement, by notice to the Borrower, cancel such amount of the Loan and/or the Fund 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 and/or the Fund Loan. - 25 - SCHEDULE 2 Description of the Project The Project is designed, over a five-year period, to promote agricultural production, to improve coffee processing and social infrastructure facilities, to provide better services to farmers and to develop and strengthen cooperative institutions in the Project Area; it consists of the following Parts: Part A: UCCAO (a) Physical expansion of UCCAO field services through the construction of storage facilities, office buildings and work- shops and the purchase of vehicles and farm and office equipment. (b) Reorganization of accounting, financial control, admin- istration and personnel management procedures of UCCAO (and its six constituent cooperative societies), expansion in number and upgrading of the skills and training of agricultural extension and cooperative development staff (including intendants and female extension agents), through the expansion of training facilities and the provision of fellowships, vehicles, and other facilities. Part B: Production Inputs Provision of credit to the members of UCCAO member cooperatives to finance: (a) The establishment of grain drying and storage facili- ties at farm level and the provision of equipment for crop treat- ment and coffee processing. (b) The provision of incremental crop production inputs (fertilizers, crop-protection chemicals, seeds). Part C: Applied Research and Seed Farm Activities (a) Carrying out of a program of applied research with IRA's assistance, and provision of equipment and vehicles there- for. (b) Expansion of seed farm activities from about 100 ha to about 250 ha, and provision of machinery and equipment therefor. - 26 - Part D: Coffee Factories (a) Provision of credit to the UCCAO member cooperatives (CAPLAME, CAPLABAM, CAPLAMI, CAPLANOUN, CAPLANDE and CAPLAHN) to finance the construction and expansion of storage facilities and the purchase of coffee processing equipment and vehicles. (b) Provision of credit to UCCAO to finance the expansion of the central coffee processing factory at Bafoussam and the provision of the necessary equipment and vehicles therefor. Part E: Village Water Supplies Construction of about 450 water points, including facilities for coffee treatment. Part F: Feeder Roads Construction and periodic maintenance of about 500 km of feeder roads known as "Category B", including the provision of equipment, spare parts, fuel, lubricants and materials. Part G: Soil Conservation, Reafforestation and Bottomland Development (a) Program of soil conservation and reafforestation on about 850 ha, and the provision of vehicles and the equipment necessary therefor. (b) (i) Development of about 315 ha of bottomlands through the construction of drainage and flood control works, the initial operation and maintenance of such works and the provision of vehicles and the equipment necessary therefor; and (ii) initial cultivation activities in the above about 315 ha and in about 300 ha already drained and the provision of vehicles and the equipment necessary therefor. Part H: Monitoring and Evaluation (a) Expansion of the monitoring unit within UCCAO. - 27 - (b) Expansion of the central evaluating unit located in Yaounde (within DEP), and establishment, equipping and initial operation of a branch of the central evaluation unit at the Western Provincial Delegation of Agriculture. (c) Annual evaluation of the progress made by UCCAO con- cerning UCCAO's coffee marketing arrangements. The Project is expected to be completed by June 30, 1990. - 28 - SCHEDULE 3 Amortization Schedule Payment of Principal Date of Payment Due (Expressed in dollars)* On each March 15 and September 15 beginning September 15, 1989 through September 15, 2003 715,000 On March 15, 2004 765,000 * The figures in this column represent dollar equivalents determined as of the respective dates of withdrawal; see General Conditions, Section 3.04. - 29 - Premium 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 3.04 (b) of the General Conditions: Time of Prepayment - Premium The interest rate (ex- pressed as a percentage per annum) applicable to the balance outstanding on the Loan on the day of prepayment multiplied by: Not more than three years 0.15 before maturity More than three years but 0.30 not more than six years before maturity More than six years but 0.55 not more than eleven years before maturity More than eleven years but not 0.80 more than sixteen years before maturity More than sixteen years but not 0.90 more than eighteen years before maturity More than eighteen years before 1.00 maturity INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT CERTIFICATE I hereby certify that the foregoing is a true copy of the original in the archives of the Interna- tional Bank for Reconstruction and Develop- ment. In witness whereof I have signed this Certifi- cate and affixed the Seal of the Bank thereunto this day of - , 198i. FOR SECRETARY