Conformed Copy - L3388 - Food Security Project - Loan Agreement

Page 1 CONFORMED COPY LOAN NUMBER 3388 CM (Food Security Project) between REPUBLIC OF CAMEROON and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT Dated September 16, 1991 LOAN NUMBER 3388 CM LOAN AGREEMENT AGREEMENT, dated September 16, 1991, between REPUBLIC OF CAMEROON (the Borrower) and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT (the Bank). WHEREAS: (A) the Borrower, having satisfied itself as to the feasibility and priority of the Project described in Schedule 2 to this Agreement, has requested the Bank to assist in the financing of the Project; (B) Part B (a) of the Project will be carried out by Unite de Traitements Agricoles par Voie Aerienne (UTAVA) with the Borrower's assistance and, as part of such assistance, the Borrower will make available to UTAVA part of the proceeds of the Loan as provided in this Agreement; (C) Part D of the Project will be carried out by Credit Foncier du Cameroun (CFC) with the Borrower's assistance and, as part of such assistance, the Borrower will make available to CFC part of the proceeds of the Loan as provided in this Agreement; Page 2 (D) by agreement dated August 3, 1990 (the Japanese Grant Agreement), the Bank acting as Administrator of grant funds provided by the Government of Japan has agreed to extend to the Borrower a grant (the Japanese Grant) in an aggregate principal amount of six hundred seven million and five hundred thousand yen (Y607,500,000) to assist in the preparation of Parts A and C of the Project on the terms and conditions set forth in the Japanese Grant Agreement; (E) the Bank acting in its own capacity and as Administrator of grant funds provided by the Government of Japan intends, to the extent practicable, that the proceeds of the Japanese Grant be disbursed on account of expenditures for Part A of the Project before disbursement of the proceeds of the Loan provided for in this Agreement are made; and WHEREAS the Bank has agreed on the basis, inter alia, of the foregoing, to extend the Loan to the Borrower upon the terms and conditions set forth in this Agreement, in the UTAVA Project Agreement of even date herewith between the Bank and UTAVA and in the CFC Project Agreement of even date herewith between the Bank and CFC; NOW THEREFORE the parties hereto hereby agree as follows: ARTICLE I General Conditions; Definitions Section 1.01. The "General Conditions Applicable to Loan and Guarantee Agreements" of the Bank, dated January 1, 1985, with the modifications set forth below (the General Conditions) constitute an integral part of this Agreement: (a) The last sentence of Section 3.02 is deleted. (b) In Section 6.02, sub-paragraph (k) is re-lettered as sub-paragraph (l) and a new sub-paragraph (k) is added to read: "(k) An extraordinary situation shall have arisen under which any further withdrawals under the Loan would be inconsistent with the provisions of Article III, Section 3 of the Bank's Articles of Agreement." Section 1.02. 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) "MINAGRI" means the Borrower's ministry responsible for agriculture; (b) "MINSANTE" means the Borrower's ministry responsible for public health; (c) "MINDIC" means the Borrower's ministry responsible for industrial and commercial development; (d) "MINAT" means the Borrower's ministry responsible for territorial administration; (e) "UTAVA" means Unite de Traitements Agricoles par Voie Aerienne, an Etablissement public caractere industriel et commercial of the Borrower, governed by the provisions of Decree No. 85-1201 of August 30, 1985, modified by Decree No. 88-1178 of September 8, 1988; (f) "CFC" means Credit Foncier du Cameroun, an Etablissement public caractere commercial of the Borrower, governed by the provisions of Decree No. 77-140 of May 13, 1977, modified by Decree No. 236 of June 17, 1981; (g) "UTAVA Project Agreement" means the agreement between the Bank and Unite de Traitements Agricoles par Voie Aerienne (UTAVA) of even date herewith, as the same may be amended from time to time, and such term includes all schedules and agreements Page 3 supplemental to the UTAVA Project Agreement; (h) "UTAVA Grant Agreement" means the agreement to be entered into between the Borrower and Unite de Traitements Agricoles par Voie Aerienne (UTAVA) 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 UTAVA Grant Agreement; (i) "CFC Project Agreement" means the agreement between the Bank and Credit Foncier du Cameroun (CFC) of even date herewith, as the same may be amended from time to time, and such term includes all schedules and agreements supplemental to the CFC Project Agreement; (j) "CFC Subsidiary Loan Agreement" means the agreement to be entered into between the Borrower and Credit Foncier du Cameroun (CFC) 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 CFC Subsidiary Loan Agreement; (k) "Small-scale Project A" means a productive investment small-scale project including, inter alia, small-scale projects related to cash-generating commercial activities such as retailing; (l) "Small-scale Project B" means a productive social investment small-scale project including, inter alia, small-scale projects related to community needs for food, livestock and agricultural production and processing; (m) "Small-scale Project C" means an infrastructure investment small-scale project including construction or rehabilitation small-scale projects related, inter alia, to water supply, irrigation and drainage, and storage facilities; (n) "Small-scale Projects" means collectively Small-scale Projects A, Small-scale Projects B and Small-scale Projects C; and "Small-scale Project" means any one of such Small-scale Projects to be carried out under Part A (a) of the Project in accordance with the policies and procedures set forth in Section C of Schedule 5 to this Agreement; (o) "Beneficiaries" means rural community groups deriving benefits from Small-scale Projects, directly or indirectly, including those individuals or private small-scale enterprises operating in the economic sector; (p) "Sponsoring Agency" means any of the regional development governmental agencies or of the non-governmental entities which proposes to assist Beneficiaries in carrying out a Small-scale Project; (q) "FIMAC Scheme" means the scheme initiated by MINAGRI for the Financement d'investissements de micro-realisations agricoles et communautaires; (r) "Sub-loan" means a loan made or proposed to be made by CFC out of the proceeds of the Loan to a rural or urban commune for a Sub-project in accordance with the policies and procedures set forth in the Schedule to the CFC Project Agreement; (s) "Sub-project" means a municipal priority income-generating investment project for the construction/renovation of market infrastructure to be carried out under Part D (a) of the Project; (t) "Special Accounts" means the accounts referred to in Section 2.02 (b) of this Agreement; and (u) "CFA Franc" or "CFAF" means the Franc de la Cooperation Financiere en Afrique Centrale, the currency of the Borrower. ARTICLE II The Loan Section 2.01. The Bank agrees to lend to the Borrower, on the terms and conditions set forth or referred to in the Loan Agreement, various currencies that Page 4 shall have an aggregate value equivalent to the amount of twenty-three million dollars ($23,000,000), being the sum of withdrawals of the proceeds of the Loan, with each withdrawal valued by the Bank as of the date of such withdrawal. Section 2.02. (a) The amount of the Loan may be withdrawn from the Loan Account in accordance with the provisions of Schedule 1 to this Agreement: (i) for expenditures made (or, if the Bank shall so agree, to be made) in respect of the reasonable cost of goods and services required for the Project described in Schedule 2 to this Agreement (except Parts A (a) and D (a) thereof) and to be financed out of the proceeds of the Loan; and (ii) for amounts disbursed (or, if the Bank shall so agree, for disbursements required to be made): (A) under Sub-loans in respect of the reasonable cost of goods and services required for Part D (a) of the Project and to be financed out of the proceeds of the Loan pursuant to the provisions of Schedule 1 to this Agreement and the Schedule to the CFC Project Agreement; and (B) under Small-scale Projects in respect of the reasonable cost of goods and services required for Part A (a) of the Project and to be financed out of the proceeds of the Loan pursuant to the provisions of Schedule 1 to this Agreement and Section C of Schedule 5 to this Agreement. (b) The Borrower shall, for the purposes of the Project, open and maintain in CFA Francs, on behalf of the Borrower and CFC, two special deposit accounts in a commercial bank on terms and conditions satisfactory to the Bank, including appropriate protection against set-off, seizure or attachment. Deposits into, and payments out of, the Special Accounts shall be made in accordance with the provisions of Schedule 6 to this Agreement. Section 2.03. The Closing Date shall be June 30, 1999 or such later date as the Bank shall establish. The Bank shall promptly notify the Borrower of such later date. Section 2.04. The Borrower shall pay to the Bank a commitment 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 for each Interest Period equal to the Cost of Qualified Borrowings determined in respect of the preceding Semester, plus one-half of one percent (1/2 of 1%). On each of the dates specified in Section 2.06 of this Agreement, the Borrower shall pay interest accrued on the principal amount outstanding during the preceding Interest Period, calculated at the rate applicable during 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 determined in respect of such Semester. (c) For the purposes of this Section: (i) "Interest Period" means a six-month period ending on the date immediately preceding each date specified in Section 2.06 of this Agreement, beginning with the Interest Period in which this Agreement is signed. (ii) "Cost of Qualified Borrowings" means the cost, as reasonably determined by the Bank and expressed as a percentage per annum, of the outstanding borrowings of the Bank drawn down after June 30, 1982, excluding such borrowings or portions thereof as the Bank has allocated to fund: (A) the Bank's investments; and (B) loans which may be made by the Bank after July 1, 1989 bearing interest rates determined otherwise than as provided in paragraph (a) of this Section. Page 5 (iii) "Semester" means the first six months or the second six months of a calendar year. (d) On such date as the Bank may specify by no less than six months' notice to the Borrower, paragraphs (a), (b) and (c) (iii) of this Section shall be amended to read as follows: "(a) The Borrower shall pay interest on the principal amount of the Loan withdrawn and outstanding from time to time, at a rate for each Quarter equal to the Cost of Qualified Borrowings determined in respect of the preceding Quarter, plus one-half of one percent (1/2 of 1%). On each of the dates specified in Section 2.06 of this Agreement, the Borrower shall pay interest accrued on the principal amount outstanding during the preceding Interest Period, calculated at the rates applicable during such Interest Period." "(b) As soon as practicable after the end of each Quarter, the Bank shall notify the Borrower of the Cost of Qualified Borrowings determined in respect of such Quarter." "(c) (iii) `Quarter' means a three-month period commencing on January 1, April 1, July 1 or October 1 in 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 Execution of the Project Section 3.01. (a) The Borrower declares its commitment to the objectives of the Project as set forth in Schedule 2 to this Agreement and, to this end: (i) shall carry out Parts A, B (b) and C of the Project through MINAGRI and Part E of the Project through MINSANTE, with due diligence and efficiency and in conformity with appropriate administrative and financial practices and shall provide, promptly as needed, the funds, facilities, services and other resources required for such Parts of the Project; and (ii) without limitation or restriction upon any of its other obligations under the Loan Agreement, the Borrower shall cause UTAVA and CFC to perform all their respective obligations set forth in the UTAVA Project Agreement and the CFC Project Agreement; shall take or cause to be taken all action, including the provision of funds, facilities, services and other resources, necessary or appropriate to enable UTAVA and CFC to perform such obligations; and shall not take or permit to be taken any action which would prevent or interfere with such performance. (b) Without limitation upon the provisions of paragraph (a) of this Section and, except as the Borrower and the Bank shall otherwise agree, the Borrower shall carry out Parts A, B (b), C and E of the Project in accordance with the Implementation Program set forth in Schedule 5 to this Agreement. (c) The Borrower shall make available to UTAVA on a grant basis the proceeds of the Loan allocated to Categories (8) and (9) of the table set forth in paragraph 1 of Schedule 1 to this Agreement under a grant agreement to be entered into between the Borrower and UTAVA, under terms and conditions which shall have been approved by the Bank. (d) The Borrower shall: (i) make available to CFC, on a grant basis, the proceeds of the Loan allocated to Category (11) of the table set forth in paragraph 1 of Schedule 1 to this Agreement; and (ii) relend to CFC the proceeds of the Loan Page 6 allocated to Category (10) of said table, under a subsidiary loan agreement to be entered into between the Borrower and CFC, under terms and conditions which shall have been approved by the Bank. (e) The Borrower shall exercise its rights under the UTAVA Grant Agreement and the CFC Subsidiary 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 Borrower shall not assign, amend, abrogate or waive the UTAVA Grant Agreement, the CFC Subsidiary Loan Agreement, or any provision thereof. Section 3.02. (a) Except as the Bank shall otherwise agree, procurement of the goods, works and consultants' services required for the Project and to be financed out of the proceeds of the Loan shall be governed by the provisions of Schedule 4 to this Agreement. (b) Without limitation to its obligations under paragraph (a) of this Section and subject to the provisions of said paragraph, the Borrower shall employ a specialized non-governmental organization, satisfactory to the Bank, to assist in the technical coordination of Part E of the Project. Section 3.03. The Bank and the Borrower hereby agree that the obligations set forth in Sections 9.04, 9.05, 9.06, 9.07, 9.08 and 9.09 of the General Conditions (relating to insurance, use of goods and services, plans and schedules, records and reports, maintenance and land acquisition, respectively) in respect of Parts B(a) and D of the Project shall be carried out by UTAVA and CFC, respectively, pursuant to Section 2.03 of the UTAVA Project Agreement and of the CFC Project Agreement. ARTICLE IV Financial Covenants Section 4.01. (a) The Borrower shall maintain or cause to be maintained records and accounts adequate to reflect in accordance with sound accounting practices the operations, resources and expenditures in respect of the Project of the departments or agencies of the Borrower responsible for carrying out the Project or any part thereof. (b) The Borrower shall: (i) have the records and accounts referred to in paragraph (a) of this Section, including those for the Special Accounts and those for the FIMAC Scheme under Part A of the Project at the central, provincial and departmental levels, for each fiscal year audited, in accordance with appropriate auditing principles consistently applied, by independent auditors acceptable to the Bank; and (ii) furnish to the Bank as soon as available, but in any case not later than six months after the end of each such year, the report of such audit by said auditors, of such scope and in such detail as the Bank shall have reasonably requested; and (c) For all expenditures with respect to which withdrawals from the Loan Account for the Project were made on the basis of statements of expenditure, the Borrower shall: (i) maintain or cause to be maintained, in accordance with paragraph (a) of this Section, records and accounts reflecting such expenditures; (ii) retain, until at least one year after the Bank has received the audit report for the fiscal year in which the last withdrawal from the Loan Account or payment out of the Special Accounts was made, all records (contracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures; (iii) enable the Bank's representatives to examine such records; and Page 7 (iv) ensure that such records and accounts are included in the annual audit referred to in paragraph (b) of this Section and that the report of such audit contains a separate opinion by said auditors as to whether the statements of expenditure submitted during such fiscal year, together with the procedures and internal controls involved in their preparation, can be relied upon to support the related withdrawals. ARTICLE V Remedies of the Bank Section 5.01. Pursuant to Section 6.02 (l) of the General Conditions, the following additional events are specified: (a) UTAVA or CFC shall have failed to perform any of their respective obligations under the UTAVA Project Agreement or the CFC 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 UTAVA or CFC will be able to perform their respective obligations under the UTAVA Project Agreement or the CFC Project Agreement. (c) The Borrower's Decrees No. 85-1201 of August 30, 1985, No. 88-1178 of September 8, 1988, No.77-140 of May 13, 1977 and No. 236 of June 17, 1981, respectively, shall have been amended, suspended, abrogated, repealed or waived so as to affect materially and adversely the ability of UTAVA or CFC to perform any of their obligations under the UTAVA Project Agreement or the CFC Project Agreement. (d) The Borrower or any other authority having jurisdiction shall have taken any action for the dissolution or disestablishment of UTAVA or CFC or for the suspension of their operations. (e) (i) Subject to subparagraph (ii) of this paragraph: (A) the right of the Borrower to withdraw the proceeds of any loan or grant 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 thereof; or (B) any such loan shall have become due and payable prior to the agreed maturity thereof. (ii) Subparagraph (i) of this paragraph shall not apply if the Borrower establishes to the satisfaction of the Bank that: (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. Section 5.02. Pursuant to Section 7.01 (h) of the General Conditions, the following additional events are specified: (a) the event specified in paragraph (a) 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; (b) any event specified in paragraphs (c) and (d) of Section 5.01 of this Agreement shall occur; and (c) the event specified in paragraph (e) (i) (B) of Section 5.01 of this Agreement shall occur, subject to the proviso of subparagraph (ii) of this paragraph. Page 8 ARTICLE VI Effective Date; Termination Section 6.01. The following events are specified as additional conditions to the effectiveness of the Loan Agreement within the meaning of Section 12.01 (c) of the General Conditions: (a) the requirement of prior authorization for exports of fisheries and livestock products has been removed and the registration of exporters of food products with MINDIC has been simplified and decentralized in a manner satisfactory to the Bank; (b) the UTAVA Grant Agreement has been executed on behalf of the Borrower and UTAVA; (c) the CFC Subsidiary Loan Agreement has been executed on behalf of the Borrower and CFC; (d) the following FIMAC staff referred to in Section B.1 of Schedule 5 to this Agreement have been appointed: the FIMAC Project Director, the Assistant Project Director, the administrative and financial controller, the field staff supervisor and the two MINAGRI training coordinators; (e) the DEAPA staff of the coordinating unit referred to in Section B.3 of Schedule 5 to this Agreement has been appointed; and (f) the MINSANTE coordinator referred to in Section B.5 of Schedule 5 to this Agreement has been appointed and the specialized non-governmental organization referred to in Section 3.02 (b) of this Agreement has been employed. 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 UTAVA Project Agreement and the CFC Project Agreement have been duly authorized or ratified by UTAVA and CFC, respectively, and are legally binding upon UTAVA and CFC in accordance with their terms; (b) that the UTAVA Grant Agreement has been duly authorized or ratified by the Borrower and UTAVA and is legally binding upon the Borrower and UTAVA in accordance with its terms; and (c) that the CFC Subsidiary Loan Agreement has been duly authorized or ratified by the Borrower and CFC and is legally binding upon the Borrower and CFC in accordance with its terms. Section 6.03. The date ninety (90) days after the date of this Agreement is hereby specified for the purposes of Section 12.04 of the General Conditions. ARTICLE VII Representative of the Borrower; Addresses Section 7.01. The Minister of the Borrower responsible for planning and regional development is designated as representative of the Borrower for the purposes of Section 11.03 of the General Conditions. Section 7.02. The following addresses are specified for the purposes of Section 11.01 of the General Conditions: For the Borrower: Ministry of Planning and Regional Development Yaounde Republic of Cameroon Page 9 Cable address: Telex: MINPAT 8203 KN With copy to: Caisse Autonome d'Amortissement B. P. 7167 Yaounde Republic of Cameroon Cable address: Telex: CAA 8858 KN Yaounde 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 248423 (RCA) Washington, D.C. 82987 (FTCC) 64145 (WUI) or 197688 (TRT) IN WITNESS WHEREOF, the parties hereto, acting through their duly authorized representatives, 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 /s/ Paul Pondi Authorized Representative INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT By /s/ Edward V.K. Jaycox Regional Vice President Africa 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 Page 10 Loan Allocated % of (Expressed in Expenditures Category Dollar Equivalent) to be Financed I. MINAGRI Expenditures (Parts A and B(b) of the Project) (1) Financing of Small- 8,500,000 100%, up to 75% scale Projects of the estimated total costs of each Small-scale Project (2) Vehicles, 900,000 100% of foreign equipment and expenditures and materials 85% of local expenditures (3) Consultants' 2,000,000 100% services and training (4) Operating 1,000,000 100% costs II. MINSANTE Expenditures (Part E of the Project) (5) Vehicles and 400,000 100% of foreign equipment expenditures and 85% of local expenditures (6) Consultants' 600,000 100% services and training (7) Operating costs 600,000 100% III. UTAVA Expenditures (Part B(a) of the Project) (8) Vehicles and 2,000,000 100% of foreign equipment expenditures and 85% of local expenditures (9) Training 200,000 100% IV. CFC Expenditures (Part D of the Project) (10) Sub-loans 4,100,000 100%, up to 70% of the estimated total costs of each Sub-project (11) Consultants' 500,000 100% services and training V. Other Expenditures (12) Unallocated 2,200,000 __________ Page 11 TOTAL 23,000,000 ========== 2. For the purposes of this Schedule: (a) the term "foreign expenditures" means expenditures in the currency of any country other than that of the Borrower for goods or services supplied from the territory of any country other than that of the Borrower; (b) the term "local expenditures" means expenditures in the currency of the Borrower or for goods or services supplied from the territory of the Borrower; provided, however, that if the currency of the Borrower is also that of another country from the territory of which the goods and services are supplied, expenditures in such currency for such goods or services shall be deemed to be "foreign expenditures"; and (c) the term "operating costs" means mission travel and subsistence allowances for local and expatriate staff involved in the Project, operation and maintenance of Project vehicles and equipment, and office supplies. 3. Notwithstanding the provisions of paragraph 1 above, no withdrawals shall be made: (a) in respect of payments made for expenditures prior to the date of this Agreement; and (b) in respect of payments made for expenditures under Category (1) after October 1 of each year, unless the Bank shall have approved the detailed work programs and budgets for Part A of the Project referred to in Section A of Schedule 5 to this Agreement and shall be satisfied with the progress of activities undertaken during the previous twelve-month period between April 1 and March 31. SCHEDULE 2 Description of the Project The objectives of the Project are: (a) to create employment opportunities and raise the purchasing power of rural groups, especially women, and to enhance their access to food; (b) to reduce the impact of pest attacks on food production; (c) to increase efficiency in marketing and storage of foodstuffs; and (d) to improve feeding and dietary practices of high risk groups (pregnant and lactating women and children under five). The Project consists of the following parts, subject to such modifications thereof as the Borrower and the Bank may agree upon from time to time to achieve such objectives: Part A: Rural Community Development (a) Carrying out under the FIMAC Scheme of a program of Small-scale Projects A, Small-scale Projects B and Small-scale Projects C, in rural areas, including the construction of about 200 village storage facilities in the Extreme North Province, and administration of said program; and (b) carrying out of a training program consisting of workshops for operation and maintenance of Small-scale Projects by Beneficiaries and management training for community group leaders. Part B: Locust Control Program Carrying out of: (a) a locust control program in the North and Extreme North Provinces, over a three-year period, through aerial crop protection and ground treatment; and (b) a study to determine the cost/effectiveness of the ground crop protection services and the possibility of farmer participation in crop protection in the North and Extreme North Provinces. Part C: Information System Establishment, over a three-year period, of an early warning and market Page 12 information system to collect and diffuse information on the food supply and demand situation in the Borrower's territory and analyze the findings thereof for decision makers. Part D: Market Infrastructure (a) Carrying out of a program of Sub-projects and financing of Sub-loans therefor to rural and urban communes for the construction/renovation of market infrastructure; and (b) organization of training seminars related to the contents of the above program, including the provision of consultants' services. Part E: Nutrition Education Development, implementation and evaluation of a pilot nutrition education program in high risk zones of four Provinces, over a three-year period, including research in maternal and infant dietary practices and training of field staff to undertake said research, and development and testing of educational materials for delivering nutrition messages through an adaptive communication strategy, all in order to provide a basis for the development of a national nutrition education program. * * * The Project is expected to be completed by December 31, 1998. SCHEDULE 3 Amortization Schedule Payment of Principal Date Payment Due (expressed in dollars)* March 15, 1997 420,000 September 15, 1997 435,000 March 15, 1998 450,000 September 15, 1998 470,000 March 15, 1999 490,000 September 15, 1999 505,000 March 15, 2000 525,000 September 15, 2000 545,000 March 15, 2001 570,000 September 15, 2001 590,000 March 15, 2002 615,000 September 15, 2002 635,000 March 15, 2003 660,000 September 15, 2003 685,000 March 15, 2004 715,000 September 15, 2004 740,000 March 15, 2005 770,000 September 15, 2005 800,000 March 15, 2006 830,000 September 15, 2006 860,000 March 15, 2007 895,000 September 15, 2007 930,000 March 15, 2008 965,000 September 15, 2008 1,005,000 March 15, 2009 1,040,000 September 15, 2009 1,080,000 March 15, 2010 1,125,000 September 15, 2010 1,170,000 March 15, 2011 1,215,000 September 15, 2011 1,265,000 _____________________________ * The figures in this column represent dollar equivalents determined as of the respective dates of withdrawal. See General Conditions, Sections 3.04 and 4.03. Premiums on Prepayment Page 13 Pursuant to Section 3.04 (b) of the General Conditions, the premium payable on the principal amount of any maturity of the Loan to be prepaid shall be the percentage specified for the applicable time of prepayment below: Time of Prepayment Premium The interest rate (expressed as a percentage per annum) applicable to 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 SCHEDULE 4 Procurement and Consultants' Services Section I. Procurement of Goods and Works Part A: International Competitive Bidding 1. Except as provided in Part C hereof, goods and works shall be procured under contracts awarded in accordance with procedures consistent with those set forth in Sections I and II of the "Guidelines for Procurement under IBRD Loans and IDA Credits" published by the Bank in May 1985 (the Guidelines). 2. To the extent practicable, contracts for vehicles shall be bulked annually. Part B: Preference for Domestic Manufacturers In the procurement of goods in accordance with the procedures described in Part A.1 hereof, goods manufactured in Cameroon may be granted a margin of preference in accordance with, and subject to, the provisions of paragraphs 2.55 and 2.56 of the Guidelines and paragraphs 1 through 4 of Appendix 2 thereto. Part C: Other Procurement Procedures 1. Items or groups of items for equipment (other than vehicles) estimated to cost the equivalent of $50,000 or less per contract, up to an aggregate amount equivalent to $1,200,000, and goods and works for Sub-projects estimated to cost more than the equivalent of $50,000 per contract, up to an aggregate amount equivalent to $4,200,000, may be procured under contracts awarded on the basis of competitive bidding, advertised locally, in accordance with procedures satisfactory to the Bank, provided that: Page 14 (i) all bids shall be opened in public and bidders' representatives shall be allowed to be present; (ii) criteria for evaluating bids shall be set out clearly and communicated to all bidders; and (iii) foreign companies shall not be required to be incorporated in Cameroon in order to participate in the bidding. 2. Items or groups of items for goods for Small-scale Projects, estimated to cost the equivalent of $25,000 or less per contract, up to an aggregate amount equivalent to $13,600,000, and goods and works for Sub-projects estimated to cost the equivalent of $50,000 or less per contract, up to an aggregate amount equivalent to $1,600,000, may be procured under contracts awarded on the basis of comparison of price quotations obtained from at least three suppliers and contractors eligible under the Guidelines, in accordance with procedures acceptable to the Bank. Part D: Review by the Bank of Procurement Decisions 1. Review of invitations to bid and of proposed awards and final contracts: (a) With respect to each contract estimated to cost the equivalent of $50,000 or more, the procedures set forth in paragraphs 2 and 4 of Appendix 1 to the Guidelines shall apply. Where payments for such contract are to be made out of the Special Account, such procedures shall be modified to ensure that the two conformed copies of the contract required to be furnished to the Bank pursuant to said paragraph 2 (d) shall be furnished to the Bank prior to the making of the first payment out of the Special Account in respect of such contract. (b) With respect to each contract not governed by the preceding paragraph, the procedures set forth in paragraphs 3 and 4 of Appendix 1 to the Guidelines shall apply. Where payments for such contract are to be made out of a Special Account, said procedures shall be modified to ensure that the two conformed copies of the contract, together with the other information required to be furnished to the Bank pursuant to said paragraph 3, shall be furnished to the Bank as part of the evidence to be furnished pursuant to paragraph 4 of Schedule 6 to this Agreement. (c) The provisions of the preceding subparagraph (b) shall not apply to contracts on account of which the Bank has authorized withdrawals on the basis of statements of expenditure. 2. The figure of 10% is hereby specified for purposes of paragraph 4 of Appendix 1 to the Guidelines. Section II. Employment of Consultants In order to assist the Borrower, UTAVA and CFC in carrying outthe Project, the Borrower shall employ and cause UTAVA and CFC to employ consultants whose qualifications, experience and terms and conditions of employment shall be satisfactory to the Bank. Such consultants shall be selected in accordance with principles 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. SCHEDULE 5 Implementation Program Section A: General 1. For the purposes of the execution of Parts A, B, C and E of the Project, the Borrower shall, through MINAGRI, beginning November 30, 1991 and thereafter not later than June 30 of each year, furnish to the Bank, for its review and approval, in respect of the forthcoming year, detailed work programs and budgets, including training programs, where applicable. In addition, together with the detailed work programs and budgets for Part A of the Project, the Page 15 Borrower shall, through MINAGRI, furnish to the Bank an evaluation report of activities undertaken during the previous twelve-month period between April 1 and March 31, including the annual audit report of FIMAC records and accounts at the central, provincial and departmental levels referred to in Section 4.01 of this Agreement. 2. The FIMAC Scheme shall be introduced on a gradual basis over the entire Borrower's territory. Small-scale Projects financed out of the Loan proceeds shall be carried out in rural areas where there is no other financing for this purpose. Section B: Project Management 1. Part A of the Project (Rural Community Development) (a) At the national level, MINAGRI's Direction des Projets Agricoles (DPA) shall have the overall responsibility for the supervision and monitoring of the implementation of Part A of the Project and the coordination of activities of the Borrower's relevant ministries and Sponsoring Agencies under the FIMAC Scheme. The following qualified and experienced staff shall be appointed and thereafter maintained: (i) a FIMAC Project Director; (ii) an agro-economist acting as Assistant Project Director, supported by a consultant specialized in micro-projects and employed in accordance with the provisions of Section II of Schedule 4 to this Agreement; (iii) an administrative and financial controller employed in accordance with the provisions of Section II of Schedule 4 to this Agreement; (iv) a field staff supervisor; and (v) two training coordinators from MINAGRI. Said staff shall be in charge of the preparation of methods and procedures applicable for Small-scale Project identification, appraisal, approval and evaluation and for the training program, and shall also provide technical support to the provincial technical units referred in the paragraph hereunder. (b) At the level of each Province, a commission chaired by the Governor and including representatives from the Borrower's relevant ministries, of the Sponsoring Agencies and of financial intermediaries shall be responsible for the review and approval of the Small-scale Sub-projects. It shall be assisted by a provincial technical unit staffed at least with two agents from MINAGRI; said unit shall help the Beneficiaries in the preparation and execution of the Small-scale Projects and in the supervision of the training program. (c) At the level of each department, an agent from MINAGRI shall act as coordinator of Part A of the Project. (d) Notwithstanding the generality of the provisions of Section 4.01 of this Agreement, records and accounts for the FIMAC Scheme at the central, provincial and departmental levels shall be reviewed every six months by an independent accountant (Commissaire aux comptes) acceptable to the Bank. 2. Part B of the Project (Locust Control Program) MINAGRI shall cooperate with UTAVA in the carrying out of Part B (a) of the Project. 3. Part C of the Project (Information System) MINAGRI's Direction des Enquetes Agro-Economiques et de la Planification Agricole (DEAPA) shall have the overall responsibility for the implementation of Part C of the Project through a coordinating unit staffed with an agro-economist, a statistician and two research assistants, all experienced and qualified. 4. Part D of the Project (Market Infrastructure) MINAT shall cooperate with CFC in the appraisal of the Sub-projects and in the organization of the seminars referred to in Part D (b) of the Project. 5. Part E of the Project (Nutrition Education) Page 16 For the purposes of the execution of Part E of the Project, MINSANTE shall establish a technical coordinating team led by a qualified and experienced coordinator from MINSANTE and including representatives from the Borrower's relevant ministries and of the specialized non-governmental organization referred to in Section 3.02 (b) of this Agreement. Section C: Policies and Procedures for Part A of the Project 1. Small-scale Project Identification and Appraisal (a) Proposals for Small-scale Projects may be initiated or sponsored by governmental or non-governmental entities, communities and other groups. Proposals shall identify the type of Small-scale Project, describe the works, goods or services to be carried out and identify the Sponsoring Agency and the Beneficiaries. (b) MINAGRI coordinators shall process the proposals for Small-scale Projects received in accordance with the operational procedures set forth by DPA at the national level, on a basis and in a manner acceptable to the Bank. (c) Appraisal criteria for all Small-scale Projects shall include the following: (i) proposed Beneficiaries shall be constituted as a rural group of not more than 20 members, recognized by traditional and/or administrative authorities and empowered through its authorized representatives to carry out the obligations specified in Section C.4 of Schedule 5 to this Agreement. Groups located in or close to urban areas shall not be eligible; (ii) Small-scale Projects B and C shall contribute mainly to Beneficiaries' food self-sufficiency and Small-scale Projects A, carried out on a pilot basis, shall contribute mainly to increase the Beneficiaries' income; (iii) Small-scale Projects shall be expected to be completed within two years and labor-intensive methods shall be used to the extent possible; (iv) Small-scale Projects shall be technically feasible and financially viable, and shall aim at improving the financial and technical management capacity of the Beneficiaries; appropriate consideration shall be given to the technical and managerial capability of the Sponsoring Agencies; an economic rate of return shall be calculated in accordance with methods acceptable to the Bank; and only Small-scale Projects A with an economic rate of return of at least 15% shall be eligible. 2. Terms and Conditions of Small-scale Projects (a) Small-scale Projects shall be financed on the following terms and conditions: (i) Financing, out of the proceeds of the Loan, of a Small-scale Project B shall not exceed CFAF 500,000, with a repayment period of not more than four years. (ii) Financing, out of the proceeds of the Loan, of a Small-scale Project C shall not exceed CFAF 6,000,000, with a repayment period of not more than ten years. (iii) Financing, out of the proceeds of the Loan, of a Small-scale Project A shall not exceed CFAF 4,000,000, with an annual rate of interest of not less than 15% on the amount withdrawn and outstanding and a repayment period of not more than four years. Page 17 (iv) Contributions in cash from Beneficiaries shall represent at least 25% of the financing of Small-scale Projects A and B and at least 20% of the financing of Small-scale Projects C. Said contributions shall be utilized to finance: (A) up to 10% of the financing of Small-scale Projects, for payment of tools, materials and equipment obtained from suppliers; (B) up to 10% of the financing of Small-scale Projects A and B and 5% of the financing of Small-scale Projects C, as a mobilization advance to be deposited in the capital reconstitution account mentioned in paragraph (d) hereafter; and (C) up to 5% of the financing of Small-scale Projects, for cost operation and maintenance of Small-scale Projects. (b) An appropriate contribution in kind from Beneficiaries shall be required. (c) Beneficiaries may benefit from financial and technical training required for the execution of Small-scale Projects, up to a maximum of CFAF 80,000 per Small-scale Project, provided that they contribute an average of 50% of the training costs. (d) For each Small-scale Project, a capital reconstitution account shall be opened in a savings bank, into which repayments of financing shall be credited. Operations under said account shall require the signature of the departmental coordinator and of the Sponsoring Agency; funds deposited therein may be utilized for financing a subsequent Small-scale Project for the same Beneficiaries or others, but only when full repayment of financing shall be made. 3. Small-scale Project Approval (a) All Small-scale Projects shall be approved by the relevant Provincial Commission. (b) Requests for approval of Small-scale Projects shall be presented on or before December 31, 1997. 4. Small-scale Project Arrangements (a) The proposed Beneficiaries selected to carry out Small-scale Projects and their Sponsoring Agencies shall promptly enter into written arrangements with MINAGRI, through the departmental coordinator, on terms and conditions satisfactory to the Bank, pursuant to which MINAGRI shall, inter alia, obtain rights adequate to protect the interests of the Bank and MINAGRI, including the right of MINAGRI to: (i) require the Beneficiaries to carry out and operate the Small-scale Project with the assistance of their Sponsoring Agency with due diligence and efficiency and in accordance with sound technical, financial and managerial standards and to maintain adequate records; (ii) require that: (A) the goods and services to be financed out of the proceeds of the Loan shall be purchased at a reasonable price, account being taken also of other relevant factors such as time of delivery, efficiency and reliability of the goods, availability of maintenance facilities and spare parts therefor and, in the case of services, of their quality and the competence of the parties rendering them; provided, however, that goods shall be procured on the basis of price quotations obtained from at least three suppliers eligible under the Guidelines in accordance with procedures satisfactory to the Bank; and (B) such goods and services shall be used exclusively in the carrying out of the Small-scale Project; (iii) inspect, by itself or jointly, with representatives of the Bank and MINAGRI if the Bank and MINAGRI shall so request, such goods and the sites, works, plants and construction included in the Small-scale Project, the operation thereof, and any relevant records and documents; Page 18 (iv) obtain all such information as the Bank or MINAGRI shall reasonably request relating to the foregoing and to the administration, operations and financial condition of the Small-scale Project, if appropriate, and to the benefits to be derived therefrom; and (v) suspend or terminate the right of the Beneficiaries to the use of the proceeds of the Loan upon failure by such Beneficiaries to perform their obligations under their arrangements with MINAGRI. (b) MINAGRI shall exercise its rights in relation to each Small-scale Project in such manner as to: (i) protect the interests of the Bank and MINAGRI; (ii) comply with its obligations under these arrangements; and (iii) achieve the purposes of the Project. SCHEDULE 6 Special Accounts 1. For the purposes of this Schedule: (a) the term "eligible Categories" means the following Categories set forth in the table in paragraph 1 of Schedule 1 to this Agreement: (i) in the case of MINAGRI, MINSANTE and UTAVA, Categories (1) through (9); and (ii) in the case of CFC, Categories (10) and (11); (b) the term "eligible expenditures" means expenditures 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 allocated from time to time to the eligible Categories in accordance with the provisions of Schedule 1 to this Agreement; and (c) the term "Authorized Allocation" means an amount equivalent to: (i) $1,500,000 in the case of MINAGRI, MINSANTE and UTAVA; and (ii) $500,000 in the case of CFC, to be withdrawn from the Loan Account and deposited into the corresponding Special Account pursuant to paragraph 3 (a) of this Schedule. 2. Payments out of a Special Account shall be made exclusively for eligible expenditures in accordance with the provisions of this Schedule. 3. After the Bank has received evidence satisfactory to it that a Special Account has been duly opened, withdrawals of the Authorized Allocation and subsequent withdrawals to replenish the Special Account shall be made as follows: (a) For withdrawals of the Authorized Allocation, the Borrower shall furnish to the Bank a request or requests for a deposit or deposits which do not exceed the aggregate amount of the Authorized Allocation. On the basis of such request or requests, the Bank shall, on behalf of the Borrower, withdraw from the Loan Account and deposit into the appropriate Special Account such amount or amounts as the Borrower shall have requested. (b) (i) For replenishment of each of the Special Accounts, the Borrower shall furnish to the Bank requests for deposits into the Special Account at such intervals as the Bank shall specify. (ii) Prior to or at the time of each such request, the Borrower shall furnish to the Bank the documents and other evidence required pursuant to paragraph 4 of this Schedule for the payment or payments in respect of which replenishment is requested. On the basis of each such request, the Bank shall, on behalf of the Borrower, withdraw from the Loan Account and deposit into the Special Account such amount as the Borrower shall have requested and as shall have been shown by said documents and other evidence to have been paid out of the Special Account for eligible expenditures. Page 19 All such deposits shall be withdrawn by the Bank from the Loan Account under the respective eligible Categories, and in the respective equivalent amounts, as shall have been justified by said documents and other evidence. 4. For each payment made by the Borrower out of a Special Account, the Borrower shall, at such time as the Bank shall reasonably request, furnish to the Bank such documents and other evidence showing that such payment was made exclusively for eligible expenditures. 5. Notwithstanding the provisions of paragraph 3 of this Schedule, the Bank shall not be required to make further deposits into a Special Account: (a) if, at any time, the Bank shall have determined that all further withdrawals should be made by the Borrower directly from the Loan Account in accordance with the provisions of Article V of the General Conditions and paragraph (a) of Section 2.02 of this Agreement; or (b) once the total unwithdrawn amount of the Loan allocated to the eligible Categories, less the amount of any outstanding special commitment entered into by the Bank pursuant to Section 5.02 of the General Conditions with respect to the Project, shall equal the equivalent of twice the amount of the Authorized Allocation. Thereafter, withdrawal from the Loan Account of the remaining unwithdrawn amount of the Loan allocated to the eligible Categories shall follow such procedures as the Bank shall specify by notice to the Borrower. Such further withdrawals shall be made only after and to the extent that the Bank shall have been satisfied that all such amounts remaining on deposit in the Special Accounts as of the date of such notice will be utilized in making payments for eligible expenditures. 6. (a) If the Bank shall have determined at any time that any payment out of a Special Account: (i) was made for an expenditure or in an amount not eligible pursuant to paragraph 2 of this Schedule; and (ii) was not justified by the evidence furnished to the Bank, the Borrower shall, promptly upon notice from the Bank: (A) provide such additional evidence as the Bank may request; or (B) deposit into the Special Account (or, if the Bank shall so request, refund to the Bank) an amount equal to the amount of such payment or the portion thereof not so eligible or justified. Unless the Bank shall otherwise agree, no further deposit by the Bank into a Special Account shall be made until the Borrower has provided such evidence or made such deposit or refund, as the case may be. (b) If the Bank shall have determined at any time that any amount outstanding in a Special Account will not be required to cover further payments for eligible expenditures, the Borrower shall, promptly upon notice from the Bank, refund to the Bank such outstanding amount. (c) The Borrower may, upon notice to the Bank, refund to the Bank all or any portion of the funds on deposit in a Special Account. (d) Refunds to the Bank made pursuant to paragraph 6 (a), (b) and (c) of this Schedule shall be credited to the Loan Account for subsequent withdrawal or for cancellation in accordance with the relevant provisions of this Agreement, including the General Conditions.