Language : ENGLISH Original : French

AFRICAN DEVELOPMENT FUND KETTA–DJOUM ROAD AND BRAZZAVILLE-YAOUNDÉ CORRIDOR TRANSPORT FACILITATION PROJECT COUNTRY: REPUBLIC OF CONGO/REPUBLIC OF CAMEROON PROJECT APPRAISAL REPORT

Appraisal Team

Team Leader : Mr. A. KARANGA, Principal Transportation Economist Ext. 2607, OINF.1 Team Members : Mr M. SOUARE, Principal Transport Engineer Ext.6536, OINF.1 Mr. H. R.SHALABY, Principal Environmentalist, Ext.3006, OSAN. 4 Ms. S. P. BARA, Senior Gender Expert Ext. 2397, OWAS.1 Mr. S. MBA, Infrastructure Expert Ext. 6821, OINF.1/CMFO Mr. A. D. BIZONGO, Infrastructure Expert Ext.6341, OINF.1/CDFO Sector Director : Mr. G. MBESHERUBUSA Ext. 2034, OINF Regional Director : Mr. J. M. GHARBI Ext. 2060, ORCE Division Manager : Mr. A. KIES Ext. 228, OINF.1

Peer Review

Mr. Jean-Pierre M. KALALA Ext. 3561, OINF.1 Mr. Bamory TRAORE Ext. 2223, OINF.1 Mr. Racine KANE Ext. 6800, CMFO, Mr. Pascal YEMBILINE Ext. 2880, ORCE Mr. Clément AHOSSI Ext. 2718, ORPF Mr. Manuel BENARD Ext. 2302, OINF.1

TABLE OF CONTENTS

I – STRATEGIC ORIENTATION AND JUSTIFICATION ............................................................1 1.1. LINKAGES BETWEEN THE PROJECT AND COUNTRY STRATEGY AND OBJECTIVES............... 1 1.2. JUSTIFICATION FOR BANK INTERVENTION ....................................................................1 1.3. ASSISTANCE COORDINATION ...............................................................................................2 II – PROJECT DESCRIPTION .......................................................................................................3 2.1. PROJECT COMPONENTS ...........................................................................................................3 2.2. TECHNICAL SOLUTIONS CHOSEN AND ALTERNATIVES STUDIED ...........................4 2.3. PROJECT TYPE ..........................................................................................................................5 2.4. PROJECT COST AND FINANCING ARRANGEMENTS........................................................5 2.5. PROJECT AREA AND TARGETED BENEFICIARIES .........................................................7 2.6. PARTICIPATORY APPROACH FOR PROJECT IDENTIFICATION, DESIGN AND IMPLEMENTATION ..........9 2.7. CONSIDERATION OF BANK GROUP'S EXPERIENCE AND LESSONS DRAWN FROM DESIGNING THE PROJECT ..................................................................................................10 2.8. KEY PERFORMANCE INDICATORS ......................................................................................10 III – PROJECT FEASIBILITY .................................................................................................11 3.1. ECONOMIC AND FINANCIAL PERFORMANCE ..................................................................11 3.2. ENVIRONMENTAL AND SOCIAL IMPACT...........................................................................12 IV –IMPLEMENTATION .................................................................................................................16 4.1. IMPLEMENTATION ARRANGEMENTS.................................................................................16 4.2. MONITORING.............................................................................................................................18 4.3. GOVERNANCE...........................................................................................................................19 4.4. SUSTAINABILITY .....................................................................................................................19 4.5. RISK MANAGEMENT ...............................................................................................................20 4.6. KNOWLEDGE DEVELOPMENT ..........................................................................................21 V – LEGAL FRAMEWORK .............................................................................................................21 5.1. LEGAL INSTRUMENT ..............................................................................................................21 5.2. CONDITIONS RELATED TO BANK INTERVENTION ........................................................21 5.3. CONFORMITY WITH BANK POLICIES..................................................................................23 VI – RECOMMENDATION 23 APPENDIX I : COMPARATIVE SOCIO-ECONOMIC INDICATORS OF THE COUNTRIES 2 APPENDIX II : TABLE OF ADB PORTFOLIOS IN THE COUNTRIES 3 APPENDIX III : KEY RELATED PROJECTS FINANCED BY THE BANK AND OTHER DEVELOPMENT PARTNERS OF THE COUNTRY 1 APPENDIX IV : MAP OF THE PROJECT AREA .......................................................................................... 1

Currency Equivalents [March 2009]

UA 1 = CFAF 761.251 CFAF 1 = UA 0.0013

Fiscal Year 1 January - 31 December

Weights and Measures

1 metric ton = 2204 pounds 1 kilogramme (kg) = 2.200 pounds 1 metre (m) = 3.28 feet 1 millimetre (mm) = 0.03937 inch 1 kilometre (Km) = 0.62 mile 1 hectare (ha) = 2.471 acres

Acronyms and Abbreviations

AADT Annual Average Daily Traffic ABEDA Arab Bank for Economic Development in Africa ADB African Development Bank ADF African Development Fund AFD French Development Agency AGEFO Sustainable Forest Management Action ASYCUDA Automatic System for Customs Data BPR Regional public property (Bien public régional) CBFF Congo Basin Forest Fund CEMAC Economic and Monetary Community of Central Africa CEPI Centre for Investment Project Studies and Evaluation (Centre d’Etudes et d’Evaluation des projets d’Investissement) CET Common External Tariff CFAF CFA Franc CIG Common Interest Group COBAC Banking Commission of Central Africa CRP Compensation and Resettlement Plan CSEPR-ADB-BM Unit in charge of monitoring and implementing ADB/WB road projects in Cameroon CSP Country Strategy Paper DGE General Directorate of Infrastructure

DGGT Department in charge of Large-Scale Infrastructure Projects in Congo

DIER Directorate of Road Investments and maintenance DSAIR Regional Integration Strategy Support Paper DTT Directorate of Transport and Telecommunications EA Executing Agency ECCAS Economic Community of Central African States ESIA Environmental and Social Impact Assessment ESMP Environmental and Social Management Plan EU European Union

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FCU Forest Conservation Unit FMU Forest Management Unit GEF Global Environmental Fund GF Gazetted Forest PRGSP Poverty Reduction and Growth Strategy Paper HDM Highway Development and Management HIPC-I Heavily Indebted Poor Countries Initiative HIV/AIDS Human Immunodeficiency Virus - Acquired Immunodeficiency Syndrome HV Heavy vehicles IDA International Development Association IRI International Roughness Index IRR Internal Rate of Return IsDB Islamic Development Bank JBIC Japan Bank for International Cooperation JTC Joint Technical Committee LV Light vehicles MDC Multi-donor Committee METP Ministry of Infrastructure and Public Works (Congo) MINEPAT Ministry of the Economy, Planning and Regional Development (Cameroon) MINPROFF Ministry of Women’s Empowerment and Promotion of the Family MINTP Ministry of Public Works (Cameroon) MoU Memorandum of Understanding NEPAD New Partnership for Africa’s Development NICT New Information and Communication Technologies NPV Net Present Value NTP National Transport Plan PIA Project Impact Area PACEBCO Congo Basin Ecosystems Conservation Support Programme PCR Project Completion Report PDCT-AC Consensual Transport Master Plan in Central Africa PFTT Regional Transport and Transit Facilitation Programmes PICEB Integrated Biodiversity Conservation and Maintenance Plan PRSP Poverty Reduction Strategy Paper REC Regional Economic Community RENAPAC National Network of the Indigenous People of Congo RF Road Fund SBCP Single Border Checkpoint SNV Dutch Development Agency STAP NEPAD’s Short-term Action Plan on Infrastructure STI Sexually Transmitted Infections TSP Transport Sector Project UA Unit of Account UAM Million Units of Account UNCTAD United Nations Conference on Trade and Development UNDP United Nations Development Programme Veh/d Vehicles per day WB World Bank

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Project brief

Client___________________________________________________________________

BORROWERS : Republic of Congo/Republic of Cameroon EXECUTING AGENCIES : Congo: Délégation Générale des Grands Travaux

(Department in charge of Large-Scale Infrastructure Projects) Cameroon: ADB-WB Projects Implementation Monitoring Unit

Ministry of Public Works (MINTP) ECCAS General Secretariat Financing Plan

Source Amount (UA) Instrument ADF Grant ADF Loan

61 900 000 59 270 000

Project Grant Project Loan

Congo Government 80 880 000 Investment Budget

Cameroon Government 6 590 000 Investment Budget

TOTAL COST 208 640 000

Key ADB Financial Information Loan and grant currency Unit of Account Type of interest Not applicable

Interest rate margin Not applicable

Service charges on ADF loan 0.75% per annum on the loan amount disbursed and outstanding

Commitment fee on ADF loan 0.5% on the undisbursed loan amount 120 days following signature of Loan Agreement

Other expenses Not applicable

ADF loan period 50 years

ADF loan grace period 120 months

NPV (baseline scenario) CFAF 21.40 billion

ERR (baseline scenario) 14.11% Duration – Key Stages (projection)

Approval of the concept note February 2009

Project approval September 2009

Entry into force January 2010

Final disbursement October 2014

Completion March 2014

Final repayment 2059

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PROJECT SUMMARY Project Overview 1. The 504.5 km Ketta-Djoum Road is a major link on the 1 612 km highway connecting the two capital cities of Brazzaville (Republic of Congo) and Yaoundé, (Cameroon). The road development is scheduled in two phases:

(i) Phase I

In Congo

� Paving of the Ketta- Biessi section (121 km); and � Minimal works (including construction of permanent works) on the

Biessi-Cameroon border earth road section (195 km) In Cameroon

� Minimal works (including construction of permanent works) on the Congo border-Mintom earth road section (105.5 km); and

� Paving of the Mintom-Djoum section (83 km)

(ii) Phase II:

� In Congo: paving of the remaining Biessi-Cameroon border earth road

section (195 km) � In Cameroon: paving of the remaining Congo border-Mintom earth road

section. 2. Excluding the above works, this project which concerns Phase I involves:(i) construction and ancillary works, (ii) road transport and transit facilitation measures, including a single checkpoint at the border and a study on the establishment of a Corridor Management Committee; (iii) support for the resettlement of indigenous people dwelling in the project impact area (PIA); and (iv) sensitization campaigns on road safety, environmental protection and STI control, including HIV/AIDS. The successful implementation of Phase I will provide a permanent connection between Congo and Cameroon. It will help to boost trade not only between the two countries but also in the Central African sub-region, even as it will contribute to poverty reduction in the area. 3. Eventually, the implementation of Phase II of the projected road development will provide a completely paved corridor between Brazzaville and Yaoundé. Project implementation will run from September 2009 to March 2014. The total project cost is estimated at UA 208.64 million, of which UA 164.72 million in foreign exchange and UA 43.92 million in local currency.

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4. Besides helping to develop trade between the two countries, the project will also contribute to strengthening regional integration in Central Africa by permitting the interconnection of highways linking Cameroon, Congo, DRC, Gabon, Equatorial Guinea and CAR. The direct project beneficiaries are the transport system users as well as dwellers within the project impact area (Sangha District in the North of Congo and Cameroon’s South/South East Provinces). The project is expected to not only improve the movement of people and goods between the two countries, but also open up areas with significant economic potential in Northern Congo (agriculture, ore, timber, etc.) and in Cameroon’s South East. Furthermore, the project will help to reduce overall transport costs and improve living conditions of people dwelling along the road. Needs Assessment 5. The project design was based, among other things, on the preliminary sketches financed by the countries between 2005 and 2008, and finalized in 2009. No permanent road connection exists between the capitals of the two countries (Yaoundé and Brazzaville). The road sections between Ketta and Djoum along this axis are in an advanced state of disrepair, thus cutting off regions that it crosses. As a result, huge agricultural, mining and tourist potential remain untapped, constituting a setback to the development of trade between the two nations. Value-added for the Bank 6. The Bank’s intervention in this project will enable it to reaffirm its lead role in implementing NEPAD infrastructure programmes in Central Africa, notably transport, within the framework of its medium-term strategy (2008-2012). Through this project, it will help to remove the physical and non-physical barriers to Central Africa’s regional integration. The Bank’s intervention is justified by its key role in multinational operations. Within that purview, the Bank draws experience from multinational projects already implemented or ongoing, especially with regard to: (i) taking facilitation and social measures into account; and (ii) the institutional arrangements required for implementing projects of this nature. Knowledge Management 7. Knowledge will be managed through the project’s "monitoring and evaluation" component, which will be implemented in Congo by the Centre for Investment Project Studies and Evaluation (CEPI) and in Cameroon by the University of Dschang. The establishment of the baseline scenario for the key impact indicators at the start of the project and impact assessment at the end will generate useful information on the outcomes and effects of this project in each country. This knowledge will be fed into each country’s road database in the technical ministries. It will be disseminated on the Bank’s website, in the annual reports, the completion report and the ADF post-evaluation review. It will also be used to update each country’s strategy paper. The Corridor Management Committee will also afford a suitable channel for disseminating the knowledge acquired in the course of implementing the project.

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Results-based Logical Framework

HIERARCHY OF OBJECTIVES

EXPECTED OUTCOMES

SCOPE PERFORMANCE INDICATORS

TENTATIVE SCHEDULE OF OBJECTIVES

ASSUMPTIONS/RISKS

1. Goal Contribute to strengthening regional integration by facilitating the movement of people and goods in Central Africa, in general, and between Cameroon and Congo, in particular

Impact Trade between Cameroon and Congo facilitated and increased as from 2014

Recipients Population of Cameroon and Cong

Impact Indicators Rate of commercial transactions between Cameroon and Congo Sources : Ministries of Trade of the two countries - ECCAS and CEMAC activity reports on the trend of intra-community trade Methods: Statistics prepared by the two countries, ECCAS and CEMAC

Expected Progress in the Long Term Rate of commercial transactions between Cameroon and Congo goes from 4% in 2009 to approximately 15% as from 2014 (or, in value from CFAF 55 Billion to CFAF 65 Billion) Sources: Ministries of Trade of the two countries - ECCAS and CEMAC activity reports on intra-community trade Methods: Statistics prepared by the two countries, ECCAS and CEMAC

Assumption Continuation of the ECCAS regional integration policy; creation of a regional Common Market, in particular, by the removal of tariff and non-tariff barriers concerning vis-à-vis CEMAC

2. Purpose Improve the service level of the transport logistic chain on the Yaoundé-Brazzaville route and the living conditions of project area dwellers

Outcomes Link between Cameroon and Congo improved from 2014 Improved accessibility of the population to a developed road along the Yaoundé - Brazzaville axis as from 2014

Beneficiaries Project area dwellers: Cameroon’s South East and Northern Congo (of which the youths, women, farmers, industrialists and traders....) Commercial truck drivers

Results Indicators 1. Rate of increase in length of all-season roads between Cameroon and Congo 2. Mean overall travel speed on the Yaoundé – Brazzaville road axis 3. Rate of reduction of overall transport costs 4. Walking distance to reach a motorable road and drinking water 5. Number of jobs created during road works Sources : Ministry of Public Works in Cameroon and Ministry of Infrastructure and Public Works in Congo; General Directorates in charge of Customs of the two countries; Communes and local authorities in Cameroon and Congo; NGOs; ECCAS; CEMAC; Surveys/Population Methods: Statistics prepared, socio-economic surveys

Expected Progress in the Medium-term 1. By 2014: the length of all-season roads between Cameroon and Congo goes from 60 % in 2009 to 80% in 2014 2. Mean overall travel speed on the Yaoundé – Brazzaville road axis goes from 30 Km/h in 2009 to 80 km/h in 2014 3. Average Vehicle operating costs (VOC) for heavy vehicles go from CFAF 816/km in 2009 to CFAF 367/km in 2014; 4. By 2014, the mean walking distance to reach an all-season road goes from 6 km on average in 2009 to 2 km in the PIA; 5. 5 000 direct and indirect jobs are created during road works in Cameroon and Congo (2011-2013); 2000 jobs created for manual road maintenance works. Sources : Ministry of Public Works in Cameroon and Ministry of Infrastructure and Public Works in Congo; General Directorates in charge of customs of the two countries; Communes and local authorities in Cameroon and Congo; NGOs; ECCAS; CEMAC; Methods: Statistics prepared statistics, corridor surveys.

Assumption Commitment of Congo and Cameroon to pursue trade facilitation efforts through the Brazzaville-Yaoundé corridor Political stability and maintenance of peace in the two countries

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3. Resources and Activities 3.1 – Development of the Main Road 3.1.1 In Congo (a) Paving of the Ketta-Biessi section (121 km, including space for optical fibre, environmental measures and weighing stations) and inspection/supervision [UA 116.87 million] b) Minimal development (including permanent works) of the Biessi-Sembé-Fr earth road section - Cameroon border(195 km) and inspection/supervision -[ UA 21.79 million ] 3.1. 2 In Cameroon (a) Paving of the Djoum-Mintom section (83 km, including space for optical fibre and environmental measures) and inspection/supervision [UA 59.26 million ] b) Minimal development (including permanent works) of the Mintom-Lélé-Congo border earth road section. Congo (105.5 km) and inspection/supervision - [UA 2.53 million ] 3.1.3 In the 2 countries ( a) Sensitization on HIV/AIDS and STI, road safety – environment [UA 0.44 million] 3.2 – Ancillary works 3.2.1 120 km of connected tracks, of which 60 in Cameroon and 60 in Congo and inspection/supervision [UA 3.74 million ] 3.2.2 Rehabilitation of social infrastructure in Cameroon and Congo [UA 0.38]

Products From 2014: - Surfaced road sections between Ouesso - Ketta-Biessi in Congo and between Djoum-Mintom, in Cameroon - Earth road sections improved and permanent works built between Biessi-Sembé-Souanké- Cameroon border (in Congo) and between Mintom-Lélé- Congo border (in Cameroon) - Space for passage of optical fibre provided between Ouesso - Ketta-Biessi in Congo and between Djoum-Mintom, in Cameroon - Fixed axle load checkpoints built and equipped Population in the PIA and road users sensitized on road safety, environmental protection, HIV/AIDS and STI - Rural tracks rehabilitated or created along the Ketta-Djoum axis - Fences/schools/health centres rehabilitated, water points and latrine blocks provided -Associations of youths, women and indigenous people equipped and supported with working implements and training

Beneficiaries PIA dwellers Congo: Sangha District Cameroon: South, Centre and East Provinces Road and forestry authorities.

Product Indicators - Length of surfaced road sections - Length of the space allowed for the passage of optical fibre - Number of persons sensitized on road safety, STI/including AIDS, and environmental protection) - Number of weighing equipment installed - Length of rural tracks developed or opened - Number of social infrastructure built or rehabilitated - Level of support to the local and indigenous people, women and youth associations

Expected Progress in the Short term /Mid-term 204 km of road are developed and paved on the Ketta-Djoum road axis (of which 121 km in Congo and 83 km in Cameroon) - Space for the installation of optical fibre is provided over 204 km in 2014. - 300 km of earth road are maintained and permanent works put in place on the corresponding sections. - 2 weighing/axle stations (1 in each country) are built, equipped and commissioned in 2014 in Congo and Cameroon - 2 shelters are built in Congo and Cameroon to shelter the police force on the road - 20% of PIA dwellers (120 000) persons) are sensitized on road safety, STI/AIDS in 2014 - 120 km of rural tracks are rehabilitated along the Ketta-Sembé-Ntam (Congo) and Djoum-Ntam (Cameroon ) road sections in 2014 - 250 carts + 250 wheelbarrows + 500 shovels are provided to women’s cooperatives and youth associations and indigenous people in Congo and Cameroon in 2011 - 8 motorcycles are provided to rural women’s cooperatives, youths and Pygmy indigenous people in Congo and Cameroon (sensitization on HIV-AIDS/STI) - 40 sewing machines are provided to the Sembé Youth Association in Congo and “Association des Bons Samaritains” for the training of girls in Cameroon in 2011 - The Sembé Parish Training Centre in Congo is rehabilitated - The fence of the Shalom Medical Centre in Congo is built - The training Centre of the “Association des Bons Samaritains” in Cameroon is rehabilitated - 1 storage facility, (used for the inter-network discussions of Baka Pygmy indigenous people) is rehabilitated in Cameroon in 2011 - 22 blocks of latrines are built in 2011 in Congo and Cameroon - The fences of 7 schools and 7 health centres are rehabilitated in 2011 in Congo and Cameroon - 8 drinking water points (boreholes) are provided in 2011 in Congo and Cameroon - 2 power generating units are provided to youth associations and the Shalom Medical Centre at

Assumption Capacity of ECCAS to carry out project coordination; conduct of the planned recruitments according to the required qualifications to enhance the capacity of the executing agency and the General Secretariat. Risk Increase in the unit costs of works and transparency in the procurement process Mitigative Measure Broadening of competition at the bid invitation phase; procurement process conducted with executing agencies – Non-objection of the Bank to various stages of the process Risk Mobilization of the counterparts contribution of both countries Mitigative Measure The loan and the grant go along with conditions for first disbursement related to the funding of the accounts opened to receive the counterpart contribution

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3.2.3 Support to the local population [UA 0.21 million] 3.3 -Facilitation Actions 3.3.1 Study on the establishment of a Corridor Management Committee [UA 0.12 million ] 3.3.2 Construction and equipment of single border checkpoint (SBCP) and shelters for joint road control, including inspection/supervision and training of border services/sensitization of users[UA 1.17 million ] 3.4 - Project Management 3.4.1 Support to coordination & monitoring [UA 0.69 million ] 3.4.2 JTC Operation [UA 0.35 million ] 3.4.3 Monitoring and evaluation [UA 0.35 million] 3.4.4 Financial and accounts audit [UA 0.35 million ] 3.4.5 Procedures manual [UA 0.05 million]

- Study on the establishment of a Corridor Management Committee conducted - Common border checkpoint built - Shelters for joint road controls (Police -Customs-Gendarmerie and Forestry) provided - Users sensitized on road check measures - Capacity of departments in charge of the project enhanced - Operation of the JTC ensured - Project monitoring and evaluation conducted - Project financial and accounts audit conducted - Administrative, financial and accounting procedures Manual prepared

- Validation of the study on the establishment of the Corridor Management Committee by the JTC - Acceptance of the single checkpoint built at the border - Number of users sensitized - Number of shelters for joint road checks -Number of flyers on road safety and road check measures handed out - Level of equipment of executing agencies and of the JTC - Number of persons from the GS/ECCAS and EA trained on Bank procurement rules and procedures - Administrative and financial procedures manual prepared and made available to the EA - Number of project impact monitoring and evaluation reports; - Number of audit reports produced - Mid-term review - PCR Sources : Project supervision, mid-term and completion reports Methods : Evaluation/supervision missions; mid-term review and PCR

Sembé (Congo) - a workshop to validate the study on the Corridor Management Committee is organized - the single border checkpoint is built, delivered and commissioned in 2014 - 4 shelters for joint road checks are built and commissioned in 2014 (along the project road axis, at the rate of 2 in each country) in Congo and Cameroon - 10 000 flyers on road safety and road check measures are produced and distributed to transporters and road users in 2014 in Congo and Cameroon - Computer and office automation equipment (2 complete work stations + 2 photocopying machines + 2 scanners) and project management software are provided to the executing agencies in Congo and Cameroon in 2010 - Computer and office automation equipment (1 PC + 1 printer + 1 photocopying machine + 1 scanner) is provided to the JTC - 1 administrative and financial procedures manual is prepared and made available to each EA in Congo and Cameroon - (20) persons from ECCAS Secretariat and the EA of the countries are trained on Bank procurement rules and procedures of the Bank in 2010 - (2) project impact monitoring and evaluation surveys are conducted; (2) audit reports are produced; (1) mid-term review is conducted in 2011; (1) PCR is prepared in 2014. Sources : Project supervision reports, mid-term review and PCR Methods : Evaluation/supervision missions; mid-term review; reports of the inspection firm; PCR

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Project Implementation Schedule

ID Nom de la tâche

12 PRELIMINARY ACTIVITIES 3 Signature and entry into force4 Publication of the General Procurement Notice5 Fulfilment of the first disbursement condition6 PROJECT IMPLEMENTATION7 Inspection/supervision and sensitization in Cameroon and Congo8 Submission and approval of bidding documents (BD) and short lists9 Bid invitation10 Bid submission, analysis and award proposals11 Approval of successful bidders and draft contracts12 Contract negotiation, signature and notification13 Works inspection and supervision14 Sensitization services15 Road works - connected tracts/social infrastructure/weighing station 16 Bid invitation17 Bid submission, analysis and proposals to successful bidders18 Approval of successful bidders and draft contracts19 Contract discussions, signature and notification20 Works implementation21 Works completion/provisional reception22 Good (support to the local population)23 BD suppliers/SL; notices and invitations launched24 Bid preparation and submission25 Contract award and signature with suppliers26 Contract implementation (supply and installation of one weighing station)27 BD suppliers/SL; notices and invitations launched28 Bid preparation and submission29 Contract award and signature with suppliers30 Contract implementation (supply of miscellaneous equipment)31 Project monitoring/evaluation (Cameroon & Congo)32 Submission and approval of model contract33 Contract negotiations, signature and notification

A S O N D J F M A M J J A S O N D J F M2010

Report and Recommendation of Bank Group Management to the Board of Directors concerning the Proposal to Award a Grant to the Republic of Congo and Extend a Loan to the Republic of Cameroon to Finance the Ketta-Djoum Road Development and Brazzaville

– Yaoundé Corridor Transport Facilitation Project. Management submits this report and recommendation concerning the proposal to award a grant of UA 61.90 million to the Republic of Congo and extend a loan of UA 59.27 million to the Republic of Cameroon, to finance the Ketta-Djoum Road Development and the Brazzaville-Yaoundé Corridor Transport Facilitation Project in Congo and Cameroon. I. Strategic Orientation and Justification 1.1 Project Linkages with Country Strategy and Objectives 1.1.1 The road project is consistent with the orientations of the national transport sector policies and programmes of Cameroon and Congo. It is fully in line with the priorities expressed in the Transport Sector Policy Papers and the Poverty Reduction Strategy Papers of the two countries. The latter underscore the importance of developing road infrastructure from the viewpoint of its contribution to linking up rural areas, reducing poverty, fostering economic growth, improving access to basic social services and regional integration. One of the strategic thrusts of Cameroon’s Poverty Reduction Strategy Paper (PRSP) (2003-2007) aimed, among other things, at developing infrastructure to support the productive and social sector. This thrust has been maintained as a priority within the framework of the Poverty Reduction and Growth Strategy Paper (PRGSP 2009-2019), currently being validated. The development of basic economic infrastructure features among the specific objectives of Congo’s PRSP (2008-2010). 1.1.2 Furthermore, the project design incorporates the guidelines of the Consensual Transport Development Plan of Central Africa (PDCT-AC) adopted under the aegis of the Economic Community of Central African States (ECCAS), which attaches special importance to multinational projects to combat poverty through the development of regional infrastructure and cooperation between its Member States and aims, in the short term, to enable travel on a paved road from one capital to another within the Community. 1.2 Justification of Bank Intervention 1.2.1 The project is in line with the Bank’s medium-term strategy (2008-2012) which reaffirms its lead role for the implementation of NEPAD’s infrastructure and regional integration programmes. It is in line with the Bank’s Regional Integration Strategy whose second pillar focuses on regional physical infrastructure. The project also plugs into the strategic pillars adopted for Bank intervention in the two countries as reflected in their respective CSPs which, among other things, are based on infrastructure development to support growth, improve the living environment and combat poverty. 1.2.2 The main road in question is a regional structuring infrastructure as it will connect not only Congo with Cameroon through the lone existing direct route, but will also constitute one of

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the main links of the alternative corridor to the Windhoek-Tripoli corridor as defined in STAP-NEPAD, to connect Bertoua in CAR to Yaoundé in Cameroon and Gabon to the South, thus enabling inter-linkage with the Brazzaville-Pointe Noire road in Congo. The project is part of the PDCT-AC Top Priority Programme which also falls within the ambit of NEPAD’s Short-term Action Plan (STAP). 1.2.3 It is also worth noting that the Governments of Cameroon and Congo on 7 June 2005 submitted a joint request to the Bank to finance the road works. The joint request was supported by another request dated 22 January 2007 from the ECCAS Secretariat. 1.3 Assistance Coordination 1.3.1 Assistance Coordination in Congo In Congo, assistance is coordinated by the Ministry of Planning, Development Programming and Regional Planning. This ministry is in charge of formulating general policies, medium- and long-term development strategies, and monitoring their implementation. In particular, it ensures that sector development strategies are consistent with the overall development and poverty reduction framework. It centralizes and manages the bank of projects, in addition to promoting public investments. Congo’s key active financial partners are: the AFD, the European Union, the ADF and, more recently, the People's Republic of China following entry into force of a Cooperation Framework for Infrastructure Project Financing. Acting within the transport sector framework as coordinator (lead donor), the European Union has financed the National Transport Plan for the 2004-2018 period. That plan defines an effective and coherent intervention programme and identifies the priority investments, rehabilitation and maintenance measures to be implemented in the sector, including the Ketta-Ntam road. In 2008, EU commitments amounted to USD 179 million. AFD and ADF commitments stood at USD 8 million each. China remains Congo’s leading partner in road infrastructure with commitments in 2008 totalling USD 1 billion (82%), followed by the EU (USD 179 million), AFD and the ADB Group, USD 8 million each. The resumption of cooperation between the Bank and Congo is marked by the financing of the draft study on the road-rail bridge over the Congo River that the Board approved in December 2008. 1.3.2 Assistance Coordination in Cameroon Cameroon signed the Paris Declaration on Aid Harmonization in 2005. Assistance is coordinated by the Ministry of Economy, Planning and Regional Planning via a Multi-donor PRSP Monitoring Committee1 (MDC) set up in June 2001. The MDC has become a forum for donors to dialogue, exchange ideas, coordinate their activities and adopt a common position on all development issues in Cameroon. To support this structure, there are active technical sub-committees dedicated, among other things, to the transport sector. The United Nations system chairs the MDC, with the UNDP hosting the Committee’s secretariat. The MDC, where the Bank has been lead donor of the Public Finance Sector Committee since September 2008, has consolidated efforts to ensure harmonization between Technical and Financial Partners. During

1 African Development Bank, Canada, European Union, France, Germany, Great Britain, IMF, Japan, Netherlands, Spain,

United States, UNDP and World Bank,

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the period 2004-2007, Cameroon’s transport sector accounted for a substantial share of the GDP amounting to 15%. Fifty-nine per cent (59%) of the resources allocated to the road sector are external and come from several donors (EU, WB, ADF, AFD and Arab Fund), while 41% are internal. II. Project Description 2.1 Project components The project aims to improve the service level of the transport logistic chain on the Yaoundé-Brazzaville road axis and the living conditions of dwellers within the project impact area. The development of the Ketta-Djoum road which is an important link of the axis is scheduled in two phases. The first phase and subject of this project centres on four components summarized in the table below which, in addition to road works on the sections concerned, include ancillary works (rural tracks and social activities), construction of a common border checkpoint and other measures geared towards enhancing the protection of the road assets and transport facilitation.

Table 2.1 Summary of Project Components

Components Cost Estimate Net of Taxes and Customs Duty (UA

Million)

Description of Components

A Development of the

principal axis

200.88

a.1 In Congo � Paving of the Ketta-Biessi section (121 km, including space for the laying of optical fibre, establishment of a weighing station and construction of shelters) � Minimal development of the Biessi - Cameroon Border earth road section, including permanent works (195 km) a.2 In Cameroon � Paving of the Djoum-Mintom section (83 km, including space for the laying of optical fibre, establishment of a weighing station and construction of shelters) � Minimal development of Mintom- Congo Border earth road section, including permanent works (105.5 km) a.3 In the two countries Works inspection and supervision, sensitization on HIV/AIDS/STI, road safety and environmental protection

B

Ancillary works

4.53

b.1 Ancillary works �Development of 120 km of rural tracks (60 km in each country) �Rehabilitation of socio-economic infrastructure in the project area b.2 Inspection and supervision of ancillary works in the two countries b.3 Support to the local population (materials and equipment)

C Transport and transit

facilitation actions

1.42

c.1 Study on development of a Corridor Management Committee c.2 Construction and equipment of the single border checkpoint c.3 Inspection of checkpoint works and training of the border services/sensitization of users

D Project management

and implementation monitoring

1.81

d.1 Support to project coordination d.2 Joint Technical Committee (Congo, Cameroon, ECCAS) d.3 Monitoring and evaluation of project impact d.4 Accounts audit d.5 Project procedures manual (Congo, Cameroon, ECCAS)

4 2.2 Technical Solutions Adopted and Alternative Solutions 2.2.1 The choice of project components meets the need for complementarity of a series of actions comprising, among other things, physical investments, facilitation measures and those aimed at ensuring the accessibility of rural dwellers to a motorable road. Private sector involvement in project financing was not adopted due to its weak financial rate of return. From 2005 to 2008, each State financed the socio-economic and technical studies relating to the part of the project located on its territory. The economic, environmental and technical results recommended a two-phase development. 2.2.2 This project concerns Phase I involving: (i) the paving of the Ketta-Biessi section (121 km) in Congo and of the Djoum-Mintom section (83 km) in Cameroon; and (ii) minimal development on the Biessi-Ntam and Mintom-Ntam earth road sections with the construction of permanent works envisaged in the preliminary sketches. This option was chosen on account of the current level of traffic, the road’s advanced state of disrepair, the weak load bearing capacity and the limited width of most of the existing facilities. All these are sources of traffic disruption. Eventually, given the volume of trade, the possibility of paving the remaining earth sections and providing a completely asphalted connection between Brazzaville and Yaoundé will be considered in Phase II. 2.2.3 The works to be undertaken on the Ketta-Biessi section in Congo and the Djoum-Mintom section in Cameroon will, in accordance with the standards prescribed for inter-state roads, involve the paving of 7.5 m roadways with asphaltic concrete and double-layered verges that are 2 m wide, taking into account the quality and quantity of materials available in the project area, the expected future traffic and the impact of the longitudinal profile on stormwater drainage. The proposed roadway structure will comprise a 30 cm thick sub-base of natural lateritic gravel, a sub-base of lateritic gravel 25 to 30 cm thick, a crushed gravel base course 20 to 25 cm in thickness and a road surface of bituminous concrete 5 cm thick with double-layered surfacing of the verges. 2.2.4 The minimal development of the earth sections consists in completing the clearing of undergrowth, reshaping and compacting the roadway, clearing out and repairing ditches and discharge systems, localised deep patching as well as lateritic gravel surfacing. It also includes the construction of permanent drainage facilities and structures (bridges, culverts and box culverts). 2.2.5 The connecting tracks to be rehabilitated (120 km equitably distributed between the two countries) are mostly cocoa-plantation tracks used to facilitate removal of farm produce and offer project area dwellers access to health, social and administrative centres. 2.2.6 The single border checkpoint will be designed to house the services responsible for supervising passage at the border between the two countries and enable juxtaposed checks of persons, vehicles and goods through harmonized and simplified procedures. The checkpoint will have all the usual facilities (latrines, water supply and electricity), parking areas and warehouses, as well as ancillary facilities (care centre, shops, etc). Furthermore, the project includes a study for the establishment of a Corridor Management Committee.

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2.2.7 The new standards of horizontal and vertical markings recommended for corridors in Africa by the African Union based on a Bank-financed study, will be implemented. Similarly, space will be left throughout the length of the road to be asphalted for subsequent laying of optical fibre according to the respective country master plans. The design of the single checkpoint at the border will be determined by the supplementary study financed by ECCAS. 2.2.8 The description of alternative solutions under consideration for the asphalted sections, the earth road sections and the structures as well as reasons for their rejection are provided below.

Table 2.2 Alternative Solutions Considered and Reasons for Rejection

Alternative Solution Brief Description Reason for Rejection Sections to be asphalted Construction of a roadway structure with double-layered surfacing

The double-layered surface dressing consists of a wearing course made up of two layers of bitumen binder and aggregate spread successively

Limited roadway lifespan considering the heavy traffic to be borne; High rainfall in the area

Paving of the entire length of the Ketta-Djoum road

Asphaltic concrete pavement Economic break-even point not reached/ high investment cost

Earth sections Development of a modern earth road

Construction of earthworks to obtain a boxed up roadway whose geometrical characteristics are compatible with a design speed of 80 km/h

Economic break-even point not reached considering the high investment cost

Structures Periodic maintenance/repair of the existing structures

Repair of the existing structures such as replacement of the wooden flooring and abutments of semi-permanent bridges, the guard-rail, the anti-corrosive protection of metal tubes, etc

Most of the structures are in an advanced state of structural deterioration and/or limited load bearing capacity which is particularly perilous to heavy vehicles; the carriageway is limited to a single lane.

2.3 Project Type The ADF will contribute to the construction and rehabilitation of identified economic and social facilities. The investments to be financed are specifically defined. Consequently, the grant and the loan were deemed appropriate as instruments for the Bank’s intervention in the project. Cameroon does qualify for ADF loans and Congo for ADF grants. 2.4 Project Cost and Financing Arrangements 2.4.1 The estimated project cost, net of taxes and customs duty and excluding compensations, is UA 208.64 million, of which UA 164.72 million in foreign exchange, and UA 43.92 million in local currency. The project cost is based on comprehensive studies conducted in the two countries from 2005 to 2008 and updated in 2009. The tables below give details of the project cost by (i) component, (ii) source of financing, (iii) expenditure category and expenditure schedule by category.

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Table 2.3 Summary of Estimated Project Cost by Component

CFAF Million UA Million

Foreign

Exchange (FE)

Local Currency

(LC) Total FE LC Total A. Development of the principal axis 104 245.94 26 061.49 130 307.43 136.94 34.24 171.18B. Ancillary works 2 045.60 896.45 2 942.05 2.69 1.18 3.86C. Transport facilitation action 293.69 624.99 918.68 0.39 0.82 1.21D. Project management and implementation monitoring 266.44 905.89 1 172.33 0.35 1.19 1.54Baseline cost 106 851.67 28 488.81 135 340.48 140.36 37.42 177.79 Physical contingencies (10%) 10 685.17 2 848.88 13 534.05 14.04 3.74 17.78Financial risks (6.68%) 7 856.16 2 094.61 9 950.77 10.32 2.75 13.07Total cost net of taxes and duty, excl. compensation 125 393.00 33 432.30 158 825.30 164.72 43.92 208.64Cost of compensation 1986.86511 - 1986.86511 2.61 - 2.61

Table 2.4

Sources of Financing (in UA million)

Source of Financing FE

Cost LC

Cost Total Cost % Total

ADF 96.57 24.6 121.17 58.08 Government of Cameroon 4.42 2.17 6.59 3.16 Government of Congo 63.80 17.08 80.88 38.77 Total cost net of taxes and duty, excl. compensation 164.79 43.85 208.64 100

Table 2.5

Project Cost by Expenditure Category (in UA million)

Expenditure Categories FE Cost LC Cost Total Cost

% FE Cost

A. Goods 0.00 0.18 0.18 0.00 B. Works 134.08 34.60 168.68 79.49 C. Consultancy services 6.28 1.76 8.04 78.14 D. Miscellaneous 0.00 0.89 0.89 0.00 Baseline cost 140.36 37.42 177.79 78.95 Provision for implementation contingencies 14.04 3.74 17.78 78.95 Provision for price escalation 10.32 2.75 13.07 78.95 Total cost net of taxes and duty, excl. compensation 164.72 43.92 208.64 78.95

Table 2.6

Expenditure Schedule by Component (in UA million) Components 2010 2011 2012 2013 2014 Total

A. Paving/Minimal road development 44.19 66.29 62.27 28.12 0 200.88 B. Ancillary works 0 4.53 0 0 0 4.53 C. Transport and transit facilitation 0.09 0.00 0.45 0.88 0 1.42 D. Project management and implementation monitoring 0.38 0.42 0.42 0.42 0.18 1.81 Total cost net of taxes and duty, excl. compensation 44.66 71.24 63.14 29.42 0.18 208.64

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2.4.2 The project is financed by the ADF, in the form of an ADF grant to Congo and an ADF loan to Cameroon. The ADF grant and loan amount to UA 121.17 million, representing 58.08% of the total project cost excluding compensations, of which: (i) UA 100 million from multinational resources (UA 60.49 million allocated to Congo as a grant and UA 39.51 million allocated to Cameroon as a loan); (ii) UA 1.41 million of the country allocation to Congo and UA 19.76 million of the country allocation to Cameroon; (iii) the ADF share to be deducted from the allocation to Congo, limited to UA 1.41 million, corresponds to the balance on the 10% maximum drawings authorized on country allocations below UA 20 million for multinational operations. The country contributions are estimated at UA 80.88 million for Congo and UA 6.59 million for Cameroon, i.e. 38.76% and 3.16% of total project cost estimate, respectively, excluding compensations. The highest authorities of Congo have officially confirmed the country’s agreement to contribute to the project financing. The provision for implementation contingencies is maintained at 10%. The provision for price escalation which accounts for 6.68% of the total baseline cost and the provision for implementation contingencies both reflect the inflation rate in the two countries concerned and the works implementation schedule. The table below summarizes the costs relating to the financing arrangements.

Table 2.7 Source of Financing by Instrument (in UA million)

Source Project Cost/

Congo % Project

Cost/Cameroon % Total

% ADF (Multinational resources) 60.49 28.99 39.51 18.94 100 47.93 ADF (Country allocation) 1.41 0.68 19.76 9.47 21.17 10.15 Total ADF 61.90 29.67 59.27 28.41 121.17 58.08 Contributions of Governments 80.88 38.76 6.59 3.16 87.47 41.92 Total cost net of taxes and duty, excl. compensation 142.78 68.43 65.86 31.57 208.64 100 2.5 Project Area and Targeted Beneficiaries 2.5.1 The direct impact area of the road to be developed comprises the corridor of the road’s right-of-way, with numerous villages traversed on both sides of the border and the zone whose economic development will benefit from the project, corresponding to the two border areas served, namely: (i) Congo’s Northern region of Sangha which covers 55.795 km2, representing nearly 15% of the country’s surface area and has a population of 100 000 inhabitants, or 2% of its population; (ii) Cameroon’s South region which covers 47 191 km2, or nearly 5% of the surface area of the country, and has 500 000 inhabitants or 4% of its population. In both countries, the rural poverty rate is very high (55% in Congo and 49.2% in Cameroon). The prevalent rural poverty in the project area is due mainly to the state of isolation of the regions traversed and the inaccessibility of the surrounding population to basic socio-economic infrastructure. Access to health centres and schools is extremely difficult due to the state of disrepair of roads. The minimum travel time to market produce is 48 hours in the rainy season, while the average distance from rural homes to an all-season road is 6 km. 2.5.2 Among the project area population, the indigenous Baka Pygmies are a special case, principally because they are vitally attached to the forest. They happen to be the poorest due to of their lifestyle (hunting and gathering) and difficult access to land. However, socio-economic

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changes are taking place within the group with its members engaging in economic activities ranging from agriculture within or around the forests, gainful employment or even petty trade in small-scale markets. Their habitat is concentrated along the road network and dominated by villages of less than 100 inhabitants, who represent nearly 80% of the human settlements within the project area. The Pygmies are increasingly claiming the right to education and access to health care. 2.5.3 Although dominated by forest, the PIA remains a rural farming area. In Congo, despite the PIA’s high food crop (cassava, plantain) and cash crop (coffee, cocoa and oil palm) potential, it remains isolated from the rest of the country owing to the lack of or degraded connections to the South, leading , among other things, to massive rural migration to the big cities (Brazzaville and Pointe-Noire, in particular). Indeed, annual plantain production (staple food in Congo) in Sangha region which lies within the PIA, could increase 2 300 tons approximately to more than 10 000 tons. Currently, the national production (74 000 tons) falls short of demand estimated at 115 000 tons/year. Concerning cocoa, of the 9 300 ha farmed at nationwide, 7 000 ha are located in Sangha but are currently abandoned due mainly to the area’s isolation. Lastly, industrial oil palm plantations covering more than 7 000 ha, of which 5 000 in Sangha, have also been abandoned for the same reasons; the annual production which was around 10 000 tons is now barely 2 000 tons, against national needs estimated at nearly 25 000 tons. 2.5.4 At the economic level, the PIA in Cameroon constitutes not only a cocoa and palm oil producing area but also one of the country’s breadbaskets. The annual palm oil production reached 200 000 tons in 2007 and forecasts report additional acreage which could raise it to the threshold of 250 000 tons by 2010. The area constantly faces problems of marketing its food produce due to lack of adequate road infrastructure. In particular, the cultivation of maize in this area whose soil is suitable for the crop will help reduce the national production shortage estimated at 120 000 tons for 2009. 2.5.5 The natural richness of the forests in the PIA is the reason for its classification into 16 Forest Management Units (FMUs) in Congo totalling 4 320 520 ha and 9 FMUs in Cameroon totalling 1 076 000 ha. Overall, the PIA is severely handicapped and isolated in the two countries, due to insufficient produce marketing infrastructure and input supply, despite its abundant agricultural and mining potential, backed by a vast river system and lateritic soils suitable for agriculture. 2.5.6 The other project beneficiaries are the transporters and haulers whose operating and transport costs will be reduced. The project will have a positive impact on local residents in the two countries, in terms of access to basic social services, reduction of input cost and sale of farm produce. It will help to revitalize food crop production and income in the PA, consequently impacting poverty reduction and job creation. The level of trade is very low in the Central African zone, due, among other things, to the state of infrastructure and the prohibitive level of transport costs. For instance, in 2005, Cameroon (which generates over 70% of intra-ECCAS trade) conducted 48.6% of its trade with the European Union against a mere 3.4% with Central Africa. Against that background, implementing this project will help to sustainably develop the overland transportation route between Cameroon and Congo, boosting trade between the two countries and within the Central African sub-region.

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2.6 Participatory Approach to Project Identification, Design and Implementation 2.6.1 Various stakeholders were involved at each stage of the project – during the studies, project preparation and appraisal. Group discussions and participatory meetings were organized both in Congo and in Cameroon. Discussion sessions were held with representatives of government departments, decentralized technical services, youth and women’s associations and indigenous people to examine all project activities, agree on the ancillary works and specific actions to take for their benefit. Approximately 1000 persons (women, youth and indigenous people) took part in the meetings. The audiences met were informed on the project objectives, procedures for displacement and resettlement of the population affected by the project, the social benefits and costs at various stages, including during road operation. 2.6.2 Specifically, through discussions with the population, women and youth associations, village cooperatives and farmers, CIGs, NGOs, the local and decentralized administrative authorities, traditional authorities, etc., a number of concerns were identified and taken into account in the design of the project, through: (i) countries financing the costs related to the displacement and resettlement of the affected population; (ii) inclusion of the condition of priority use of local labour during the works in the competitive bidding documents; (iii) support to local produce marketing activities (provision of intermediate means of transport); (iv) provision/rehabilitation of connecting rural tracks; (v) support to income-generating activities; (vi) support to youth associations, women and indigenous people; (vii) sensitization on road safety, HIV/AIDS/STI and environmental protection; and (viii) establishment of a Corridor Management Committee which will propose coordinated civil protection measures, given the phenomenon of organized banditry. The professionals of the sector (road transporters and transport auxiliaries) met also expressed their interest in the project which will help to develop the transportation industry in the two countries. 2.6.3 Regarding cooperation with the other institutions, besides the periodic meetings in the countries, meetings were held with development partners intervening in the transport sector, notably, the European Union and the World Bank, in a bid to improve the project design and arouse their interest in Phase II. It is worth noting that through the governments, other donors, amongst which ABEDA and IsDB, were sensitized towards contributing to the financing of the second phase. 2.6.4 During the project’s operational phase, the participatory approach will be maintained through supervision and mid-term review missions. The participatory approach will also be adopted during the implementation of the "Sensitization on HIV/AIDS/STI, road safety and environmental protection" component, which will be carried out by the consulting firm responsible for works inspection and supervision. Furthermore, the contractors responsible for works will be required to maintain that approach during implementation, by involving the local population regularly in site meetings.

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2.7 Consideration of Bank Group’s Experience and Lessons Drawn from Designing the Project

2.7.1 With the adoption of STAP-NEPAD, the preparation and implementation of regional transport programmes will henceforth systematically include the transport facilitation component. The implementation of similar programmes has encountered difficulties due to: (i) the relatively long delay in starting work; and (ii) the late mobilization of the counterpart contribution. The project has factored in these constraints and drawn lessons from the Bank’s experience in the two countries and in implementing multinational programmes. These lessons come from similar regional projects where the Bank intervenes alongside other donors (European Union, World Bank), notably between Cameroon and land-locked countries (Chad for the Douala-Bangui Highway, Central African Republic for the Douala-N’Djamena Highway), and between Cameroon and Nigeria (Bamenda-Enugu axis). These lessons highlight the need to clearly outline in advance the role expected of RECs to give impetus to regional programmes and generally coordinate their implementation. 2.7.2 The project provides for institutional coordination arrangements, through the JTC under the aegis of the ECCAS General Secretariat. Accordingly, the project includes support to ECCAS to enable it to effectively coordinate the project through the JTC and notably for the implementation of trans-border and facilitation actions (common border checkpoint, establishment of the Corridor Management Committee, etc.). 2.7.3 The loan and grant conditions concerning timely mobilization of counterpart resources should help to improve disbursement levels and thus the portfolio in the two countries. It should be mentioned that the Bank’s portfolio in Congo is being rebuilt following the normalization of relations with the country end – 2004. The portfolio has until now contained no transport sector operation. 2.8 Key Performance Indicators 2.8.1 The key measurable performance indicators are: (i) in terms of impact, the rate of commercial transactions between Congo and Cameroon; (ii) in terms of outcomes, the rate of increase in length of all-season roads between Congo and Cameroon; mean travel speed on the Brazzaville-Yaoundé highway; reduction ratio of overall transport costs; walking distance to an all-season road; number of jobs created during road works; (iii) in terms of products, length of surfaced roads between Ketta and Djoum; length of rural tracks created or rehabilitated between Ketta and Djoum; number of people of the PIA sensitized on HIV/AIDS/STI, road safety and environmental protection; and the number of built or rehabilitated social infrastructure. These key indicators are detailed in the logical framework with the deadlines. In addition to these indicators, other performance indicators concerning project implementation will be established and monitored in terms of: (i) time taken to fulfil the conditions precedent to first disbursement of the grant and the loan; (ii) procurement deadlines; (iii) implementation timeframes; (iv) disbursement rates compared to the expenditure schedule. 2.8.2 Project effectiveness will be measured through the socio-economic impact monitoring/evaluation indicators. These indicators will be defined beforehand by identified

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organizations, namely the Centre for Investment Project Studies and Evaluation (CEPI) in Congo and the University of Dschang in Cameroon. The performance of the executing agencies and the Implementation Monitoring Units will make it possible to measure project effectiveness from the baseline case established. III. Project Feasibility 3.1 Economic and Financial Performance 3.1.1 The expected economic benefits of implementing the programme are: the impact of providing accessibility, reduced vehicle operating costs, increased mobility and improved connection between the two countries and within the sub-region, increase in agricultural production and development of trade in the PIA. For purposes of economic analysis, the quantifiable benefits were determined based on "no programme" and "programme" scenarios over a 20-year period for the main road. A discount rate of 12% and a residual value equivalent to approximately 37% of the cost of works was used for the economic calculation. The HDM 4 model was used to conduct the economic analysis. 3.1.2 The costs considered are the economic investment costs, routine and periodic maintenance and vehicle operation. For purposes of economic analysis, the project benefits were calculated by looking at the difference between the "project” and “no project" situations over a period of 20 years, including the works phase prior to the operation of the road. They include: (i) savings on vehicle operating costs; (ii) savings on maintenance costs; and (iii) agricultural value-added induced by the project in the PIA. The agricultural value-added results from surplus production which will be generated by the road on certain key crops (cocoa, oil palm, maize, cassava and plantain). The PIA is indeed suitable for these crops which have either been completely abandoned (the case of Congo with the closure of its State plantations), or have witnessed a drastic reduction in their production, due mainly to the high cost estimates related to the area’s isolation. The estimated surplus calculated takes into account the agricultural strategies and policies of both countries. Their efforts using their own resources to undertake major road works upstream of the project axis, are aimed precisely at linking the two capitals (Brazzaville and Yaoundé), especially opening up the high agricultural potential zones traversed. The surplus production which will occupy a maximum of 50 000 ha, mainly on abandoned acreages, will not have a negative impact in terms of deforestation. Based on this analysis, an economic rate of return (ERR) of 14.11% higher than the opportunity cost of the capital (12%) was obtained. The table below summarizes the results of the analysis.

Table 3.1 Key Economic and Financial Data

ERR (baseline scenario) NPV

14.11% CFAF 21.40 billion

ERR/Assumption of a 10% increase in capital cost and recurrent costs NPV

13.10% CFAF 11.83 billion

ERR/Assumption of a 10% reduction in net benefits NPV

13.00% CFAF 9.69 billion

ERR/Assumption of a 10% increase in capital cost and recurrent costs plus a 10% reduction in exogenous benefits NPV

12.01% CFAF 124 million

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3.2. Environmental and Social Impact Environment 3.2.1 The project follows the alignment of the only road linking the two countries. By improving access to the natural resources of the traversed areas, the road will enable, on the basis of environmental and forest governance principles, better control and management of these resources (mainly wood and fauna). It is thus in line with the spirit of sustainable development of Northern Congo and Cameroon’s South as well as the implementation of the Convergence Plan of the Central African Forests Commission (COMIFAC). The road will especially help seal the sustainable ecosystem conservation and management alliance established by the two countries through the Congo Basin Ecosystem Conservation Support Programme (PACEBCO) financed by the Bank, the Congo Basin Forest Fund (CBFF), the Global Environmental Fund (GEF), the COMIFAC Convergence Plan and other donors’ related development programmes. 3.2.2 At the environmental level, the project is classified under Category 1. In conformity with Bank requirements regarding environmental policy and those of Congo and Cameroon, two environmental and social impact assessments (ESIA), one for each country, have been conducted and validated by the Ministries in charge of the environment. These updated and consolidated studies have helped to highlight the environmental and social impacts. The two environmental and social impact assessments (ESIA) followed a participatory approach marked by public consultations in both countries, Congo and Cameroon, in accordance with the provisions of their respective environmental codes. The Environmental and Social Management Plans (ESMP) and the Compensation and Resettlement Plans (CRP) have been prepared in accordance with the standards required by the Bank and have followed the procedures necessary for their validation by the two countries. The objectives and budgets related to these two plans are consistent with the existing programmes of the Congo Basin, in particular with: (i) PACEBCO; (ii) the CBFF launched in June 2008; and (iii) the GEF Programme for the Sustainable Management of Congo Basin Forests in which the Bank is a stakeholder. The consolidated summary of the ESIA as well as the summaries of CRPs were published on Bank’s website on 23 January 2009 and are available at the Public Information Centre (PIC). These summaries were also forwarded on 2 February 2009 to the Board for information. 3.2.3 The environmental and social impacts of the project and corresponding mitigative measures were identified in the ESMP at three levels:

(i) At the level of the road’s technical design, mitigative measures concerning drainage, erosion control, tree planting, support to natural regeneration, sowing of local species and deferred grazing and compensatory planting;

(ii) At the road construction level, mitigative measures in the project’s direct impact

area concerning the restoration of borrow sites, sensitization on environmental protection and limitation of dust emission. The management of the environmental and social impacts directly related to the construction of the road and estimated to cost UA 93 000 for Congo and UA 47 000 for Cameroon will be

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included in contractors’ specifications. Afforestation, which is considered an environmental impact mitigation measure in the ESMP, will also be carried out under the Compensation and Re-housing Plan (2 trees planted for each tree uprooted) financed by the countries.

(iii) During the road operation phase, measures designed to mitigate risks of

degradation of the natural heritage (fauna, flora and socio-cultural heritage) in the project’s indirect impact area concern the maintenance and restoration of the said heritage. They consist of: (i) conduct of annual environmental and forest audits; (ii) annual environmental and forest monitoring; (iii) constant updating of the GIS environmental, forest and wildlife tracking system; (iv) classification of new forests through the certification of gazetted forests and the establishment of Forest Conservation Units (FCU) for the conservation of these ecosystems; (v) sensitization and strengthening of institutional capacity, including local and regional authorities; and (vi) road maintenance. The annual cost of the actions concerned at this third level was estimated at UA 360 000 lump sum for each country. It will be financed directly by the countries through existing or new financial instruments (environmental or forestry funds, in particular) based on a detailed action plan and budget. The undertaking by the countries to provide these amounts once the road becomes operational is a condition for the first disbursement of the loan and the grant.

3.2.4 Studies undertaken in the PA suggest that the prevalent slash and burn farming does not pose a threat to the basic ecological parameters of the forest (maintenance of vegetation mosaic), on account of the low population density, the cyclical nature of the crops and the predominance of human labour as a factor of production. The establishment of FCUs, under the above-mentioned third level of impact measurement, is aimed, among other things, at empowering the local and indigenous people to undertake forest heritage protection actions and enhance their land management capacity. Gender 3.2.5 The PIA is characterized by severe isolation due to the poor state of roads and lack of means of transport. As a result, its women are in a particularly precarious situation, which is exacerbated by the climatic conditions characterized by rains most of the year. However, women constitute nearly 60% of the agricultural labour in the area, account for between 60 and 80% of the food production and are almost 100% responsible for farm produce processing. They are engaged in agriculture (market gardening and food crops), small-scale catering services, petty trade and food processing. As such, they are primarily affected by the structural problems concerning the agricultural sector, which is marked by the difficulty of marketing produce in the urban centres due to insufficient road and transport infrastructure. Specifically, Baka Pygmy women still practice collection and gathering in the vast forests from where they fetch local products (mushrooms, honey, oilseeds and medicinal plants) which, besides their excellent basket making, constitute a marketable income-generating potential.

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Social 3.2.6 According to the latest survey available (ECOM 2005), the poverty rate in Congo is 42.3% and its scale is pronounced in semi-urban areas (55.1%) and rural areas (49.2%). In Cameroon, the poverty rate has stayed at 39.9 %, showing a gap compared to the target of 37 % set by the Government in the PRSP. This rate was estimated in 2007 at 55% in rural areas. The prevalent rural poverty in the PIA is due mainly to the state of isolation of the traversed areas and the inaccessibility of the surrounding population to basic socio-economic infrastructure. Access to health centres and schools is extremely difficult because of the degraded state of roads. The minimum travel time to market produce is 48 hours during the rainy season. 3.2.7 Despite the varied and changing contexts in which the indigenous Baka Pygmies (80% of the population of the PIA) find themselves, they are increasingly involved in economic activities (farming, gainful employment and trade in local products, etc.). In the two countries, the Pygmies are engaged in the distribution of non-timber forest products and traditional medicinal products on the major markets. The services they provide generally as porters of manufactured goods are also in demand. Several rural associations have set up to promote micro-credit, offer training in modern-day trades (tailoring, joinery, marketing of non-timber forest products, etc.) and sensitize on HIV/AIDS-STI. The lack of logistical means and the inaccessibility of the remote zones inside the forest are severe obstacles to the exercise of social activities run by these organizations. 3.2.8 Efforts have been made to ensure synergy between the project and the ongoing actions of associations and development projects in the area, which provide assistance to women and the indigenous people in a bid to derive maximum benefit from the infrastructure to be provided. These actions concern providing intermediate transport logistic equipment (carts), sundry work implements (wheelbarrows, shovels, etc.), improvement of health and working conditions (fences, latrines, water points) and sensitization on HIV/AIDS-STI, road safety and the environment. The combination of all these actions will help to reduce the difficulties, particularly those faced by the youth and women, to improve their health, increase their income and consequently reduce the poverty scale in the area. 3.2.9 The development of the road will help to revive agricultural production in the area and significantly reduce transaction costs as well as travel time on the road. The high transport costs applied in the zone explain the prices of certain common manufactured goods which are three to ten times more expensive at Souanké in Northern Congo than at Sangmélima in Cameroon, the difference being mainly attributable to transport cost. The project will thus have a significant social impact in terms of: (i) accessibility to the markets to sell the agricultural and forest products at profitable prices and provision of health care and education to the area; (ii) reduction of the school dropout rate among the youth and increase in the enrolment rate of children, thanks to the improved parental income. Moreover, the project will help to improve the quality of life and living conditions of PIA dwellers through the creation of permanent jobs (transport and catering services; trade in gravel, sand and fill, batch selling of non-timber forest products and other activities induced by the construction of the road and the link-up tracks). Therefore, it is expected that at least 5 000 direct and indirect temporary jobs will be created during the period of the works and 2 000 permanent jobs induced by manual road maintenance tasks.

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3.2.10 The project will entail population displacement affecting approximately 1 050 houses in Congo and 600 houses in Cameroon, for which compensation will be paid by the countries. The project could lead to an increase in road accidents due to excessive speeding through the villages. It could also entail a risk of spread of HIV/AIDS and STI, owing to the influx of people around the road axis to be developed. Sensitization campaigns will help to improve the knowledge of the local population and company personnel in the construction phase on forest management, respect for fauna, and the need for the youth to attend school, STI/AIDS and water-borne diseases, behaviour as regards road safety, etc. The implementation of the social mitigative measures envisaged under the project will be checked by the works inspection consulting firms. These measures, whose cost is taken into account in the ESMP, will be also monitored by the government departments responsible for social issues in the two countries. Climate Change 3.2.11 The project traverses the Congo Basin whose forests constitute carbon sinks of an absorptive capacity of 500 million tons of CO2 per annum. Climate change has been taken into account in its design with the boxing up of the road sections to be developed and the design of the drainage works to accommodate the project area’s rainfall. 3.2.12 The impact of climate change also appears at the third level of the mitigative measures referred to under paragraph 3.2.3 and which include management and governance of forest and wildlife resources, reduction of emissions due to deforestation and conduct of environmental and forest audits. They also include monitoring/evaluation and environmental and forest monitoring. 3.2.13 It is worth noting that Congo and Cameroon have implemented the 2001 Dakar Declaration concerning abolition of the production and sale of leaded fuel, respectively in 2005 and in 2006. Cameroon intends to conduct a study on the emission of exhaust fumes (Nox, SOX, CO2, etc.) into the atmosphere, under the transport sector programme (2006-2015) supported by the Bank, AFD, EU and IsDB. The Bank will support Congo to mobilize the resources to finance a similar study. Resettlement 3.2.14 The project will entail the displacement of approximately 1 050 houses in Congo and 600 houses in Cameroon, generally built in local materials and whose occupants grouped in families will be compensated by the countries. This procedure is aimed at facilitating the reconstruction of dwellings on nearby sites, shifting new ships backwards and opening new acreages. The costs related to the resettlement of this population which will be financed by the countries are estimated at approximately UA 0.88 million in Congo and UA 1.29 million in Cameroon. Proof of compensation payment by Congo and Cameroon to those affected by expropriation is a condition for awarding the grant and extending the loan.

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IV. Implementation 4.1 Implementation Arrangements Executing and Monitoring Agencies 4.1.1 Congo and Cameroon have agreed to entrust the general coordination of the project and the "Transport Facilitation" component implementation monitoring to the ECCAS General Secretariat, through the Department in charge of Physical, Economic and Monetary Integration. The General Secretariat currently has within the said Department one (1) Senior Infrastructure Engineer. A call for interest was issued in June 2009 for the recruitment of three Experts (1 Civil engineer, 1 Transport Economist and 1 Financial Analyst) as part of implementing the new organization chart adopted in June 2008 to enhance the capacity of the Secretariat. It should be specified that the two countries will sign a Memorandum of Understanding (MoU) entrusting to ECCAS the tasks of serving as the executing agency of the single border checkpoint and conducting the study on the establishment of the Corridor Management Committee. ECCAS will also play a lead role within the Joint Technical Committee (JTC) which will be set up pursuant to Decision N° 06/ECCAS/CCEG/XII/05 on the Establishment of Committees for Monitoring and Implementing the NEPAD Priority Projects for Central Africa. Proof of payment into a special account opened in the name of the ECCAS General Secretariat, of amounts intended for financing the components entrusted to it is a condition for the grant and the loan. 4.1.2 In Congo, the role of project executing agency will be played by the Department for Large-Scale Infrastructure Projects (Délégation Générale des Grands Travaux - DGGT). Decree N° 2002-371 of December 03 2002 establishing the DGGT defined it as the technical and administrative body for Government procurements and contracts, and designates it as the State’s delegated project owner for major development and infrastructure projects, in collaboration with the ministries in charge of investments and the budget, the technical ministries, of which the Ministry of Equipment and Public Works, and project beneficiary communities. Thus, DGGT is designated as the executing agency of a large number major infrastructure projects2. It has technical staff and an administrative and financial organization strengthened in close synergy with the METP. The team of the executing agency will be placed within the DGGT Directorate of Technical Coordination and will comprise, besides a coordinator: (i) a road engineer; (ii) a structural engineer; (iii) an accountant; (iv) a procurement expert; and (v) an environmental/forestry expert. The Bank will approve the curriculum vitae of these experts beforehand. The executing agency operating cost is included in the project’s counterpart contribution. 4.1.3 In Cameroon, the role of the project executing agency will be played by the Ministry of Public Works (MINTP) through the ADB/World Bank Road Projects Monitoring and Implementation Unit (CSEPR-ADB/BM) established in 1998 for the ADB and then extended in 2008 to WB transport projects. This Unit currently consists of a Coordinator, three (3) civil engineers, a procurement expert, an accountant and support staff. It has a procedures manual governing its operation, albeit in want of revision. The performance evaluation of

2 Imboulou Hydroelectric Dam (120 Megawatts) – USD 280 million; Modernization of Maya Maya International Airport –

CFAF 39 billion; Point-Noire – Dolisie Road (186 km) – CFAF 172 billion; Owando-Makoua-Ouesso Road.

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CSEPR-ADB/BM personnel is carried out regularly. For the implementation of this of project, the said personnel will be backed up by another civil engineer and an environmental forestry expert whose profile and qualifications will have been considered acceptable to the Bank. The design of an administrative and financial procedures manual is planned under the project for use by the executing agencies. The corresponding operating cost will be included in the project counterpart contribution. Institutional Arrangements 4.1.4 As indicated on 4.1.1 above, there are plans to set up a Joint Technical Committee (JTC) to coordinate project implementation monitoring. The JTC will comprise, besides the project executing agency officials, one (1) representative of the following government departments of the two countries: (i) Finance; (ii) Regional Integration/Cooperation; (iii) Public Works; (iv) Land Transport; (v) Forest and Wildlife Protection; (vi) Environment; (vii) Customs; and (viii) Immigration Police. Civil society will be represented within the JTC by one (1) representative: (i) of haulers; (ii) road transporters; and (iii) environmental protection NGOs. The CEMAC Commission will be represented within the JTC. ECCAS will act as secretary of the JTC. The JTC will play the role of project implementation coordination to resolve any problems which could hamper the harmonious execution of the programme in the two countries. It will meet at least 4 times per year (or more if necessary) alternately in Congo and Cameroon. The operating expenses of the JTC (computer hardware, visits by experts, per diem, organization of meetings) are included in the project cost and are charged in equal shares to the counterpart contribution of the two countries. 4.1.5 In April 2009, the ECCAS General Secretariat launched a complementary study within the framework of the project. Among other things, the study concerned methods of construction and operation of the single border checkpoint (SBCP) which will be validated and included in the aforementioned MoU. The signature of the MoU between the two countries, under the aegis of ECCAS to govern the implementation and operation of the SBCP and various transport facilitation measures, is a condition for the loan and the grant. Procurement 4.1.6 The procurement codes in the two countries are being revised. Any goods, works and services financed by the Bank will be procured in accordance with Bank Rules and Procedures for the Procurement of Goods and Works and Bank Rules and Procedures for the Use of Consultancy Services, using the appropriate standard Bank procurement documents. Disbursement 4.1.7 The direct disbursement method is envisaged for goods, works and the provision of consultancy services financed by the ADF grant to Congo and the ADF loan to Cameroon. In each country, the counterpart contribution will be placed in accounts opened in banks acceptable to the ADF. These accounts will be funded in accordance with the quarterly schedule of expenditure. They will also hold the operating expenses of the national executing agencies (EA). Moreover, the countries will fund the account opened in the name of ECCAS to receive the

18

resources which will be used to finance: (i) works on the common border checkpoint (including inspection and supervision); (ii) operating expenses of the JTC; and (iii) conduct the study on the establishment of the Corridor Management Committee (including the study validation workshop). The opening of the accounts will be a condition precedent to the disbursement of the loan and the grant. The same applies to the funding, on half-yearly basis, of the counterpart contribution account based on the expenditure schedule. Auditing 4.1.8 The project accounts will be kept by the executing agencies and the ECCAS Accountant according to the provisions of the administrative, financial and accounting procedures manual which will be prepared. One external audit of the project accounts will be conducted each year by an audit firm engaged by ECCAS according to Bank Group procedures. The audit reports will be submitted to the ADF latest six months following the end of each financial year. As the project will be executed over a period of 54 months, it is accepted that 4 audits will be conducted, the last of which will be on project completion. The two countries and ECCAS will arrange to keep accounts in conformity with standard practice and will facilitate the work of the auditor recruited by ECCAS. Implementation and Supervision Schedule 4.1.9 The project will be implemented from September 2009 to March 2014, i.e. over 54 months. During its implementation, the Bank will undertake joint supervision missions with ECCAS and CEMAC and the relevant government departments of both countries. At mid-term, the Bank will conduct a review mission to assess the project implementation status and the extent to which it would attain its set objectives. 4.2 Monitoring 4.2.1 Monitoring/evaluation will comprise internal and external monitoring, Bank supervision missions, a mid-term review and an evaluation including the borrower’s and the Bank’s completion reports. Project implementation will be the subject of a monthly and quarterly report prepared by the consultants charged with works inspection and supervision and the project officer at the level of each country, as well as ECCAS. These reports will be transmitted to the Bank, latest within fifteen days following the end of the quarter concerned and according to the format in force. To draw lessons from this project, the socio-economic effects will be monitored by the Centre for Investment Project Studies and Evaluation (CEPI) in Congo and the Faculty of Agronomic Science (FASA) of the University of Dschang in Cameroon which was also selected to monitor and evaluate the Bamenda-Mamfé-Ekok/Mfum-Abakali-Enugu Corridor Project between Cameroon and Nigeria. The project will be monitored in the course of its execution. The quantitative elements will be provided for the post-evaluation reviews. 4.2.2 The consultants charged with works inspection and supervision will prepare works completion reports which they will submit to the executing agency of their respective countries. In turn, the executing agencies will prepare the Borrower’s project completion report according to the format in force and within six months of project completion. ECCAS will use these various reports to prepare the project completion report. The consultants will assist the executing agencies with the provisional reception of works.

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4.3 Governance 4.3.1 In Congo, the State has, within the framework of PRGSP 2008-2012, embarked on improving governance and consolidating peace and security. The following ongoing reforms are regarded as completion point triggers (HIPC-I) in the current of year (2009): (i) maintenance of macroeconomic stability through the satisfactory reviews of the PRGF and preparation of the medium-term expenditure framework; (ii) establishment of an Anti-corruption Commission; (iii) strengthening of transparency in the management of the oil and forest sectors; and (iv) the draft Public Procurement Code which should be adopted during the second quarter of 2009. The challenge currently lies in the efficient operation of these mechanisms. 4.3.2 The Bank is supporting Cameroon in its effort to improve budget execution and budget control, administrative and legal reform, and step up the anti-corruption drive. In that regard, Government’s actions through “Operation Sparrow Hawk” (French “Opération Epervier” deserves mention as part of efforts to check corruption in the country. Furthermore, with the support of the Bank and the World Bank, Cameroon is preparing a new Public Procurement Code aimed, among other things, at reducing procurement deadlines and improving efficiency in public expenditure execution. The Government has also decided that at the beginning of each year, all counterpart contributions will be put together to avoid disruptions in the provision of such funds. It should be mentioned that the Bank in Cameroon is the lead donor of the Sector Committee seeking to ensure the implementation of the public finance modernization plan. In general, the country has made progress regarding the implementation of the Paris Declaration on the Aid Harmonization (2005) and the Accra Agenda for Action (2008) 4.3.3 The risks of bad governance related to the project under consideration are mainly at the level of: (i) procurement and contract implementation process; (ii) implementation of the environmental, wildlife protection and forest heritage conservation measures. These risks will be mitigated by: (i) the fact that the Bank oversees the procurement process by giving its non-objection opinion on the competitive bidding documents, contract proposals and various contracts, as well as through its project supervision and accounts auditing; and (ii) the mechanisms for environmental monitoring and building project management capacity with civil society involvement, in a bid to prevent and denounce situations of over-exploitation of forest resources. 4.4 Sustainability 4.4.1 In Congo, the classified road network is approximately 18 000 km. Its maintenance is the responsibility of the General Directorate of Public Works with financing from the General Road Fund Directorate (DGFR). Originally conceived in 2004 as a "second generation fund", the DGFR is so far operating like a first generation fund, thus without financial autonomy (resources collected are centralized at the level of the Treasury according to the principle of “unicity of funds” (French: “unicité de caisse”). The annual resources actually mobilized to maintain the priority network of 2000 km, have gone from CFAF 8.7 billion in 2005 to CFAF 24 billion in 2008, against real needs expressed of CFAF 17 billion in 2005 and CFAF 26 billion in 2008. Therefore, available funds could meet 92.31% of overall needs in 2008, compared to

20

51.18% in 2005. Congo is committed to maintaining this trend which reveals its determination to mobilize resources and ensure effective road maintenance. The installation of other weighing stations (4 in 2009) is envisaged under the National Transport Plan (PNT). 4.4.2 In Cameroon, the classified road network is approximately 51 256 km, of which 5 100 km paved. The maintenance is currently financed through the Road Fund (RF) which is operating relatively well. The resources of the Road Fund which are derived mainly from road user charges went from CFAF 15 billion in 1998 to CFAF 50 billion in 2008, and have risen to CFAF 55 billion for the year 2009 going by the provisions of the memorandum of understanding (MoU) signed with sector donors. The Government is committed to increasing these resources by CFAF 5 billion per year until the adoption of the future MoU under preparation. The privatization of the operation of weighing stations and tollbooths should help to protect the road network and improve the RF resources by approximately 10%. In the two countries, the programming for the subsequent maintenance work on the Ketta and Djoum road sections are based on the 2009 budgets. 4.4.3 The recurrent overloading problems which cause early road degradation should be mentioned and rightly attributed to non-compliance with the CEMAC instruments regulating axle load control. However, practical measures are being taken to check and punish cases of overloading. For instance, Congo is committed to reinforcing the transposition and effective application of these provisions before 31 December 2009, by limiting the peak axle load to 13 tons for a single axle, 21 tons for a tandem axle and 27 tons for a tridem axle. In addition to the equipment envisaged under this project (one weighing station per country), the two countries undertake to procure mobile axle-load scales for use in checking axle load on the highway to be developed. All these measures will be permanently monitored through the Corridor Management Committee to be set up in the wake of the study envisaged in that regard under this project. 4.5 Risk management 4.5.1 The risks associated with the project concern: (i) the capacity of ECCAS and the two countries to coordinate and manage the project; (ii) the increase in costs; (iii) the capacity of the countries to mobilize their project counterpart contribution. 4.5.2 The risk regarding the capacity of ECCAS and the States to manage the programme is mitigated by the fact that the two countries agreed to sign an MoU entrusting to the Community the role of implementing trans-border actions and running the project coordination Joint Technical Committee. The executing agency will be provided an administrative, financial and accounting procedures manual to be prepared within the project framework. It will also receive support from Bank headquarters and Field Offices in charge of Cameroon and Congo, notably on procurement issues. Furthermore, under the aegis of ECCAS, there are plans to train about twenty experts of the General Secretariat and the executing agencies on Bank procurement rules and procedures. The signing and forwarding of the MoU to the Bank is a condition for awarding the grant and extending the loan.

21

4.5.3 The risk concerning increase in costs, slowness and transparency in the procurement process is attenuated by: (a) incorporating a specific provision related to the financial risks so as to include exchange rate fluctuations and price hikes on some inputs; (b) the procurement process which will follow Bank rules of procedure, with the involvement of the DGTT in Congo; and (c) three-tier control of the procurement process in Cameroon. 4.5.4 The risk related to the mobilization of the counterpart contribution is mitigated by the conditions precedent to first disbursement of the loan and the grant which require the opening and funding of accounts intended to receive such contributions. 4.6 Knowledge Development Knowledge development will take place through monitoring and evaluation. The establishment of the key impact indicators prior to the start of the project (baseline scenario) and impact assessment at the end of the project will make available useful information on the project outcomes and effects. Such knowledge will be managed from a functional database within the monitoring and evaluation services of government departments in charge of roads in the two countries, and will be disseminated in the annual reports, the OINF website and during national workshops. V. Legal Framework 5.1 Legal instrument To finance this project, the Bank will use: (i) the project grant to Congo from ADF resources allocated to multinational operations and one drawing not exceeding 10% from ADF resources below UA 20 million allocated to countries; and (ii) the project loan to Cameroon from ADF resources allocated to multinational operations covering 2/3 and the project loan from ADF resources allocated to countries covering 1/3. 5.2 Conditions Attached to Bank Intervention

A.1 Protocol of Agreement of the ADF Grant to Congo

A.1.1 Entry into Force of the Grant Protocol of Agreement: Entry into force of the Grant Protocol of Agreement (MoU) is subject to its signature by the Donee and the Fund.

A.1.2 Conditions Precedent to Disbursement of the Grant In addition to entry into force, the Fund will proceed to disburse the Grant resources only upon the Donee’s fulfilment of the following conditions to the Fund’s satisfaction:

(i) Show to the ADF proof of compensation payment to the population affected by expropriation (see paragraph 3.2.14);

22

(ii) Show proof of opening an account in a bank acceptable to the Fund, and transfer

into the said account of one-quarter of the counterpart contribution for the first year of the project, amounting to approximately CFAF 3.8 billion (see paragraph 4.1.7);

(iii) Show to the ADF proof of paying into a special account opened in the name of the

ECCAS General Secretariat amounts intended for financing the components entrusted to it (see paragraph 4.1.1);

(iv) Forward to the ADF the MoU signed by the two countries under the aegis of

ECCAS, setting forth the conditions related to ownership and management of the single border checkpoint and other facilitation measures (limitation of check-points and axle load controls) (see paragraph 4.1.5);

(v) Show proof of Government’s commitment to set up a minimum annual budget of

CFAF 200 000 000 to finance the "Environmental and Forest Heritage Maintenance, Rehabilitation and Conservation" component, once the road becomes operational (see paragraph 3.2.3).

A.1.3 Other Conditions

(vi) Show proof of the funding, on a semi-annual basis, of the counterpart contribution

account based on the expenditure schedule (see paragraph 4.1.7).

A.2 Loan Agreement to Cameroon

A.2.1 Conditions Precedent to Entry into Force of the Loan Agreement Entry into force of the Loan Agreement is subject to its signature by the Borrower and the Fund, as well as fulfilment of other conditions under the General Conditions of the Fund.

A.2.2 Conditions Precedent to Loan Disbursement In addition to entry into force, the Fund will proceed with the first disbursement of loan resources only upon fulfilment of the following conditions by the Borrower (Government of the Republic of Cameroon) to the Fund’s satisfaction:

(i) Show to the ADF, proof of compensation payment to the population affected by expropriation (see paragraph 3.2.14);

(ii) Show proof of opening an account in a bank acceptable to the Fund, and transfer

into the said account of one-quarter of the counterpart contribution for the first year of the project, amounting to approximately CFAF 0.3 billion (see paragraph 4.1.7);

23

(iii) Show to the ADF proof of paying into a special account opened in the name of the ECCAS General Secretariat amounts intended for financing the components entrusted to it (see paragraph 4.1.1);

(iv) Forward to the ADF the MoU signed by the two countries under the aegis of

ECCAS, setting forth the conditions related to ownership and management of the single border checkpoint and other facilitation measures (limitation of check-points and axle load controls) (see paragraph 4.1.5);

(v) Show proof of Government’s commitment to set up a minimum annual budget of

CFAF 200 000 000 to finance the "Environmental and Forest Heritage Maintenance, Rehabilitation and Conservation" component, once the road becomes operational (see paragraph 3.2.3).

A.2.3 Other Conditions

(vi) Show proof of the funding, on a semi-annual basis, of the counterpart contribution

account based on the expenditure schedule (see paragraph 4.1.7). 5.3 Compliance with Bank Policies The project complies with all applicable Bank policies. VI. Recommendation In light of the foregoing, it is recommended that an ADF grant not exceeding UA 61.90 million be awarded to the Republic of Congo and an ADF loan not exceeding UA 59.27 million be extended to the Republic of Cameroon. The grant and loan will be used to implement the project as designed and described in this report, and will be subject to the conditions specified in the Grant Protocol of Agreement and the Loan Agreement.

Appendix I Page 1/2

YearCongo,

Dem. Republic

AfricaDevelo-

ping Countrie

Develo- ped

CountrieBasic Indicators Area ( '000 Km²) 2 345 30 323 80 976 54 658Total Population (millions) 2008 64,7 985,7 5 523,4 1 226,3Urban Population (% of Total) 2008 34,2 39,2 44,0 74,4Population Density (per Km²) 2008 27,6 32,5 23,0 49,6GNI per Capita (US $) 2007 140 1 226 2 405 38 579Labor Force Participation - Total (%) 2005 40,5 42,3 45,6 54,6Labor Force Participation - Female (%) 2005 43,1 41,1 39,7 44,9Gender -Related Dev elopment Index Value 2006 0,345 0,482 0.694 0,911Human Dev elop. Index (Rank among 174 countries 2006 177 n.a. n.a. n.a.Human Pov erty Index (HPI-1-Value) (%) 2005 39,3 38,7 … …

Demographic IndicatorsPopulation Grow th Rate - Total (%) 2008 3,2 2,3 0,3 1,2Population Grow th Rate - Urban (%) 2008 5,0 3,3 2,5 0,5Population < 15 y ears (%) 2008 47,4 40,9 16,6 27,4Population >= 65 y ears (%) 2008 2,6 3,4 16,7 8,0Dependency Ratio (%) 2008 100,1 79,5 47,7 53,9Sex Ratio (per 100 female) 2008 98,2 99,3 94,3 101,5Female Population 15-49 y ears (% of total populatio 2008 22,2 24,2 24,3 25,8Life Ex pectancy at Birth - Total (y ears) 2008 46,8 54,5 76,7 67,5Life Ex pectancy at Birth - Female (y ears) 2008 48,0 55,6 67,5 80,3Crude Birth Rate (per 1,000) 2008 49,2 35,7 11,0 20,1Crude Death Rate (per 1,000) 2008 17,8 13,0 10,4 8,6Infant Mortality Rate (per 1,000) 2008 112,1 83,9 7,1 48,5Child Mortality Rate (per 1,000) 2008 193,1 137,4 8,8 72,3Total Fertility Rate (per w oman) 2008 6,7 4,6 1,6 2,5Maternal Mortality Rate (per 100,000) 2005 549 683 450 9Women Using Contraception (%) 2007 20,6 29,7 61,0 75,0

Health & Nutrition IndicatorsPhy sicians (per 100,000 people) 2004 10,2 39,6 78,0 287,0Nurses (per 100,000 people) 2004 50,6 120,4 98,0 782,0Births attended by Trained Health Personnel (%) 2007 74,0 51,2 59,0 99,0Access to Safe Water (% of Population) 2007 48,2 64,3 84,0 100,0Access to Health Serv ices (% of Population) 2004 59,0 61,7 80,0 100,0Access to Sanitation (% of Population) 2006 31,0 37,6 53,0 100,0Percent. of Adults (aged 15-49) Liv ing w ith HIV/AID 2007 0,0 4,5 1,3 0,3Incidence of Tuberculosis (per 100,000) 2006 392,0 315,8 275,0 19,0Child Immunization Against Tuberculosis (%) 2007 94,0 83,0 89,0 99,0Child Immunization Against Measles (%) 2007 79,0 83,1 81,0 93,0Underw eight Children (% of children under 5 y ears 2007 25,1 25,2 27,0 0,1Daily Calorie Supply per Capita 2004 1 560 2 436 2 675 3 285Public Ex penditure on Health (as % of GDP) 2005 1,5 2,4 1,8 6,3

Education Indicators Gross Enrolment Ratio (%) Primary School - Total 2007 101,1 99,6 106,0 101,0 Primary School - Female 2007 95,5 92,1 103,0 101,0 Secondary School - Total 2007 44,2 43,5 60,0 101,5 Secondary School - Female 2007 33,7 40,8 58,0 101,0Primary School Female Teaching Staff (% of Total) 2003 25,9 47,5 51,0 82,0Adult Illiteracy Rate - Total (%) 2003 ... 38,0 21,0 1,0Adult Illiteracy Rate - Male (%) 2003 ... 29,0 15,0 1,0Adult Illiteracy Rate - Female (%) 2003 ... 47,0 27,0 1,0Percentage of GDP Spent on Education 2002 4,5 4,5 3,9 5,9

Environmental IndicatorsLand Use (Arable Land as % of Total Land Area) 2005-08 0,1 6,0 9,9 11,6Annual Rate of Deforestation (%) 2000-08 0,4 0,7 0,4 -0,2Annual Rate of Reforestation (%) 2000-08 10,0 10,9 … …Per Capita CO2 Emissions (metric tons) 2005-08 0,1 1,0 1,9 12,3

Sources : ADB Statistics Department Databases; World Bank: World Development Indicators; last update :UNAIDS; UNSD; WHO, UNICEF, WRI, UNDP; Country Reports

Note : n.a. : Not Applicable ; … : Data Not Available;

COMPARATIVE SOCIO-ECONOMIC INDICATORSCongo, Dem. Republic

mars 2009

0

20

40

60

80

100

120

140

2003

2004

2005

2006

2007

2008

Infant Mortality Rate( Per 1000 )

Congo, Dem. Republic Africa

0

500

1000

1500

2002

2003

2004

2005

2006

2007

GNI per capita US $

Congo, Dem. Republic Africa

0,0

0,5

1,0

1,5

2,0

2,5

3,0

3,5

2003

2004

2005

2006

2007

2008

Population Growth Rate (%)

Congo, Dem. Republic Africa

111213141516171

2003

2004

2005

2006

2007

2008

Life Expectancy at Birth (years)

Congo, Dem. Republic Africa

Appendix I Page 2/2

Year Cameroon AfricaDevelo-

ping Countrie

Develo- ped

CountrieBasic Indicators Area ( '000 Km²) 476 30 323 80 976 54 658Total Population (millions) 2008 18,9 985,7 5 523,4 1 226,3Urban Population (% of Total) 2008 56,8 39,2 44,0 74,4Population Density (per Km²) 2008 39,8 32,5 23,0 49,6GNI per Capita (US $) 2007 1 050 1 226 2 405 38 579Labor Force Participation - Total (%) 2005 42,6 42,3 45,6 54,6Labor Force Participation - Female (%) 2005 38,6 41,1 39,7 44,9Gender -Related Dev elopment Index Value 2006 0,505 0,482 0.694 0,911Human Dev elop. Index (Rank among 174 countrie 2006 150 n.a. n.a. n.a.Popul. Liv ing Below $ 1 a Day (% of Population) 2001 40,2 34,3 25,0 …

Demographic IndicatorsPopulation Grow th Rate - Total (%) 2008 2,0 2,3 0,3 1,2Population Grow th Rate - Urban (%) 2008 3,5 3,3 2,5 0,5Population < 15 y ears (%) 2008 40,8 40,9 16,6 27,4Population >= 65 y ears (%) 2008 3,5 3,4 16,7 8,0Dependency Ratio (%) 2008 79,6 79,5 47,7 53,9Sex Ratio (per 100 female) 2008 100,0 99,3 94,3 101,5Female Population 15-49 y ears (% of total populati 2008 24,2 24,2 24,3 25,8Life Ex pectancy at Birth - Total (y ears) 2008 50,8 54,5 76,7 67,5Life Ex pectancy at Birth - Female (y ears) 2008 51,3 55,6 67,5 80,3Crude Birth Rate (per 1,000) 2008 33,9 35,7 11,0 20,1Crude Death Rate (per 1,000) 2008 14,1 13,0 10,4 8,6Infant Mortality Rate (per 1,000) 2008 86,0 83,9 7,1 48,5Child Mortality Rate (per 1,000) 2008 141,9 137,4 8,8 72,3Total Fertility Rate (per w oman) 2008 4,2 4,6 1,6 2,5Maternal Mortality Rate (per 100,000) 2004 669 683 450 9Women Using Contraception (%) 2004 26,1 29,7 61,0 75,0

Health & Nutrition IndicatorsPhy sicians (per 100,000 people)* 2005 18,4 39,6 78,0 287,0Nurses (per 100,000 people) 2005 43,9 120,4 98,0 782,0Births attended by Trained Health Personnel (%) 2006 63,0 51,2 59,0 99,0Access to Safe Water (% of Population) 2006 70,0 64,3 84,0 100,0Access to Health Serv ices (% of Population) 2004 80,0 61,7 80,0 100,0Access to Sanitation (% of Population) 2006 51,0 37,6 53,0 100,0Percent. of Adults (aged 15-49) Liv ing w ith HIV/AID 2007 5,1 4,5 1,3 0,3Incidence of Tuberculosis (per 100,000) 2006 192,0 315,8 275,0 19,0Child Immunization Against Tuberculosis (%) 2007 81,0 83,0 89,0 99,0Child Immunization Against Measles (%) 2007 74,0 83,1 81,0 93,0Underw eight Children (% of children under 5 y ears 2004 18,0 25,2 27,0 0,1Daily Calorie Supply per Capita 2004 2 212 2 436 2 675 3 285Public Ex penditure on Health (as % of GDP) 2005 1,5 2,4 1,8 6,3

Education Indicators Gross Enrolment Ratio (%) Primary School - Total 2007 109,6 99,6 106,0 101,0 Primary School - Female 2007 101,3 92,1 103,0 101,0 Secondary School - Total 2007 25,2 43,5 60,0 101,5 Secondary School - Female 2007 22,2 40,8 58,0 101,0Primary School Female Teaching Staff (% of Total 2007 42,5 47,5 51,0 82,0Adult Illiteracy Rate - Total (%) 2003 ... 38,0 21,0 1,0Adult Illiteracy Rate - Male (%) 2003 ... 29,0 15,0 1,0Adult Illiteracy Rate - Female (%) 2003 ... 47,0 27,0 1,0Percentage of GDP Spent on Education 2006 3,3 4,5 3,9 5,9

Environmental IndicatorsLand Use (Arable Land as % of Total Land Area) 2005-08 12,8 6,0 9,9 11,6Annual Rate of Deforestation (%) 2000-08 0,9 0,7 0,4 -0,2Annual Rate of Reforestation (%) 2000-08 14,0 10,9 … …Per Capita CO2 Emissions (metric tons) 2005-08 0,4 1,0 1,9 12,3

Sources : ADB Statistics Department Databases; World Bank: World Development Indicators; last update :UNAIDS; UNSD; WHO, UNICEF, WRI, UNDP; Country Reports

Note : n.a. : Not Applicable ; … : Data Not Available;

COMPARATIVE SOCIO-ECONOMIC INDICATORSCameroon

mars 2009

808182838485868788899091

2003

2004

2005

2006

2007

2008

Infant Mortality Rate( Per 1000 )

Cameroon Africa

0

500

1000

1500

2002

2003

2004

2005

2006

2007

GNI per capita US $

Cameroon Africa

1,8

1,9

2,0

2,1

2,2

2,3

2,4

2003

2004

2005

2006

2007

2008

Population Growth Rate (%)

CameroonAfrica

111213141516171

2003

2004

2005

2006

2007

2008

Life Expectancy at Birth (years)

CameroonAfrica

Appendix II Page 1/3

Table of ADB Portfolio in the Countries

List of Ongoing Projects (Grants and Loans) by Sector

Congo: Sector: Agriculture

Name Type1 Classification Amount (UA) Date of Approval

Agricultural Sector Study

G

1 000 000.00

10/2008

TOTAL APPROVED 1 000 000.00

-1 L: Loan, G: grant

Sector: Water/Sanitation Name Type1 Classification Amount (UA) Date of Approval

Brazzaville & Pointe-Noire DWSS Study

G

1 269 923.66

07/2007

TOTAL APPROVED 1 269 923.66

-1 L: Loan, G: grant

Sector: Social

Name Type1 Classification Amount (UA) Date of Approval

Support to Socio-economic Reintegration

G

14 800 000.00

03/2006

TOTAL APPROVED 14 800 000.00

-1 L: Loan. G: grant

Sector: Multi-sector

Name Type1 Classification Amount (UA) Date of Approval

Economic Management support

G

500 000.00

09/2003

Institutional Support to Expenditure Circuit

G 2 550 000.00 12/2006

TOTAL APPROVED 3 050 000.00

--1 L: Loan. G: grant

Appendix II Page 2/3

List of Ongoing Projects (Grants and Loans) by Sector

Cameroon Sector: Agriculture

Name Type1 Classification Amount (UA) Date of Approval

RUMPI Participatory Development Project L

15 000 000.00

05/2003

RUMPI Participatory Development Project I L

1 500 000.00

05/2003

Emergency Aid Avian flu L 333 311.11 04/2006 Grassfields Participatory Rural Development & Decentralization

L 15 000 000.00 05/2003

Mideno: North-West Rural Development L 9 100 000.00 12/1980 Household income improvement Programme L 14 000 000.00 06/2001 TOTAL APPROVED 54 933 311.00

-1 L: Loan. G: grant Sector: Transport

Name Type1 Classification Amount (UA) Date of Approval

Infrastructure Construction & Maintenance

P

30 264 649.02

12/202

Development of the Batibo-Bachuo-Akagbé Road P 44 700 000.00 11/2006 TOTAL APPROVED 74 964 649.02

-1 L: Loan. G: grant

Sector: Water/Sanitation

Name Type1 Classification Amount (UA) Date of Approval

Inventory Water/Sanitation

P

420 163.06

12/2006

Yaoundé Sanitation Project P 25 600 000.00 12/2005 TOTAL APPROVED 26 020 163.06

-1 L: Loan. G: grant

Appendix II Page 3/3

Sector: Electricity

Name Type1 Classification Amount (UA) Date of Approval

AES SONEL Investment Programme

P

53 696 560.74

05/2006

TOTAL APPROVED 53 696 560.74

-1 L: Loan. G: grant

Sector: Social Name Type1 Classification Amount (UA) Date of Approval

Support to Vocational Training Reform P 14 000 000.00 12/2003 Support to Vocational Training Reform P 1 000 000.00 12/2003 Health I Project: Health System Development P 8 050 000.00 06/2000 Reproductive Health Support Programme P 10 230 000.00 06/2004 Reproductive Health Support Programme P 1 900 000.00 06/2004 TOTAL APPROVED 35 180 000.00

-1 L: Loan. G: grant

Sector: Multi-Sector Name Type1 Classification Amount (UA) Date of Approval

Governance Reform Support P 25 000 000.00 12/2006

PARG- Institutional Support P 4 000 000.00 12/2006 Support to National Governance Programme P 3 180 000.00 10/2001 TOTAL APPROVED 32 180 000.00

-1 L: Loan. G: grant

Appendix III Page 1/1

Key Related Projects Financed by the Bank and Other Development Partners of the Country Congo

Donors Projects Amount (in CFAF million)

Remarks

ADF Brazzaville-Kinshasa Road-rail Bridge Construction Study

1 046.438 Launching planned for 2nd quarter of 2009

Reconstruction of NH1: Pointe Noire-Dolisie Section

172 450.276 Ongoing

Asphalting of the NH2: Owando-Makoua-Yengo (Mambili) Section

121 436.69 Ongoing

IPPF-NEPAD Dolisie-Ndendé-Kibangou (Gabon border) Road Asphalting Study

100.00 IPPF-NEPAD study envisaged

Reconstruction of NH1: Nganga Lingolo-Kinkala-Gambari Section

57 510.16 Ongoing

Institutional Support to Road Maintenance 1 300.00 Ongoing

World Bank Agricultural Development and Rural Roads Rehabilitation Project

10 000.00 of which 7 970.00 for rural roads

Ongoing

Cameroon Donors Projects Amount (in CFAF million) Remarks

Development of the Numba-Bachuo Akagbe Road (50 km)

42 080 Ongoing

Development of the Garoua Boulaï-Ngaoundéré Road, Batch 2: Nandeke-Mbere (82 km)

42 556

Contracts awarded

Bamenda-Mamfé-Ekok-Enugu Corridor (approximately 153 km of which 63 km under rehabilitation and 90 km new construction)

87 726 Procurements ongoing

IDA Development of the Garoua Boulaï-Ngaoundéré Road, Batch 3: Mbere- Gaoundéré (85 km)

43 000

Procurements ongoing

EDF Development of the Garoua Boulaï-Ngaoundéré Road, Batch 1: Garoua Boulaï - Nandéké (86 km)

Financing agreement in the process of signature – Procurements expected

ABEDA - KFEDA Construction of the Ayos-Bonis Road (Lot 1: Ayos-Abong Mbang 88 km

16 000

90% completed

IsDB - Saudi Fund - OPEC Fund Construction of the Ayos-Bonis Road (Lot 2: Abong-Mbang –Bonis (103 km)

22 000

50% completed

ABEDA - KFED - OPEC Fund Construction of the Yaoundé Road - Olama Bridge (80 km)

23 000

80% completed

Appendix IV Page 1/1

Map of the Project Area

This map below was prepared by staff of the African Development Bank for use exclusively by readers of the report to which it is attached. The names used and the borders shown do not imply on the part of the ADB Bank Group and its members any judgement concerning the legal status of a territory nor any approval or acceptance of these borders.

MULTINATIONAL CONGO/CAMEROON

PROPOSAL TO AWARD A UA 61.90 MILLION ADF GRANT AND A UA 59.27 MILLION ADF LOAN TO FINANCE THE KETTA-DJOUM ROAD AND

BRAZZAVILLE-YAOUNDÉ TRANSPORT CORRIDOR FACILITATION PROJECT

CORRIGENDUM

During negotiations on the ADF grant and loan proposal to finance the Ketta-Djoum Road and Brazzaville-Yaoundé Transport Corridor Facilitation Project held on 14 and 15 September 2009 in Tunis, the Cameroonian and Congolese delegations proposed amendments to (i) the conditions precedent to first disbursement and (ii) other conditions attached to the grant and the loan. These amendments do not call the said conditions into question but seek to specify the modalities for fulfilling them. The purpose of this corrigendum is to reflect those amendments.

Paragraph 5.2: Conditions Attached to ADF Intervention Replace:

A.1 - Protocol of Agreement of the ADF Grant to Congo A.1.1 Entry into Force of the Grant Protocol of Agreement Entry into force of the Grant Protocol of Agreement is subject to its signature by the Donee and the Fund. A.1.2 Conditions Precedent to Disbursement of the Grant In addition to entry into force, the Fund will proceed to disburse the Grant resources only upon the Donee’s fulfilment of the following conditions to the Fund’s satisfaction: (i) Show to the ADF proof of compensation payment to the population affected by

expropriation (see paragraph 3.2.14); (ii) Show proof of opening an account in a bank acceptable to the Fund, and transfer into

the said account of one-quarter of the counterpart contribution for the first year of the project, amounting to approximately CFAF 3.8 billion (see paragraph 4.1.7);

(iii) Show to the ADF proof of paying into a special account opened in the name of the ECCAS General Secretariat amounts intended for financing the components entrusted to it (see paragraph 4.1.1);

(iv) Forward to the ADF the Memorandum of Understanding signed by the two countries under the aegis of ECCAS, setting forth the conditions related to ownership and management of the single border checkpoint and other facilitation measures (limitation of check-points and axle load control) (see paragraph 4.1.5);

(v) Show proof of Government’s commitment to set up a minimum annual budget of CFAF 200 000 000 to finance the "Environmental and Forest Heritage Maintenance,

2

Rehabilitation and Conservation" component, once the road becomes operational (see paragraph 3.2.3).

A.1.3 Other Conditions (vi) Show proof of funding the counterpart contribution account half-yearly, based on the

expenditure schedule (see paragraph 4.1.7). With: A.1.1 Entry into Force of the Grant Protocol of Agreement Entry into force of the Grant Protocol of Agreement is subject to its signature by the Donee and the Fund. A.1.2 Conditions Precedent to Disbursement of the Grant In addition to entry into force, the Fund will proceed to disburse the Grant resources only upon the Donee’s fulfilment of the following conditions to the Fund’s satisfaction: (i) Show to the Fund proof of compensation payment to the population affected by

expropriation (see paragraph 3.2.14); (ii) Show proof of opening an account in a bank acceptable to the Fund, and transfer into

the said account of one-quarter of the counterpart contribution for the first year of the project, amounting to approximately three billion eight hundred million (3 800 000 000) CFA Francs (see paragraph 4.1.7);

(iii) Show to the Fund proof of paying into a special account opened in the name of the ECCAS General Secretariat, one quarter of the amount meant to finance the components entrusted to it, i.e. nearly one hundred and ninety-four million (194 000 000) CFA Francs (see paragraph 4.1.1);

(iv) Forward to the ADF the Memorandum of Understanding signed between the Republic of Cameroon and the Republic of Congo under the aegis of ECCAS, setting forth the modalities related to ownership and management of the single border checkpoint and other facilitation measures (see paragraph 4.1.5);

A.1.3 Other Conditions (v) To avoid the suspension of disbursement during the project implementation

phase, the Donee undertakes to show proof of making half-yearly payments into the counterpart contribution account and the special account, indicated respectively in paragraphs (ii) and (iii) above, based on the expenditure schedule (see paragraphs 4.1.1 and 4.1.7).

3

A.1.4 Commitment (vi) By signing this document, the Donee undertakes to provide a minimum annual

budget of two hundred million (200 000 000) CFA Francs to finance the “Environmental and Forest Heritage Maintenance, Rehabilitation and Conservation” component, once the road becomes operational (see paragraph 3.2.3).

A.2 Loan Agreement with Cameroon Replace: A.2.1 Conditions Precedent to Entry into Force of the Loan Agreement Entry into force of the Loan Agreement is subject to its signature by the Borrower and the Fund, as well as fulfilment of other conditions under the General Conditions of the Fund. A.2.2 Conditions Precedent to Loan Disbursement In addition to entry into force, the Fund will proceed with the first disbursement of loan resources only upon fulfilment of the following conditions by the Borrower (Government of the Republic of Cameroon) to the Fund’s satisfaction: (i) Show to the ADF, proof of compensation payment to the population affected by

expropriation (see paragraph 3.2.14); (ii) Show proof of opening an account in a bank acceptable to the Fund, and transfer into

the said account of one-quarter of the counterpart contribution for the first year of the project, amounting to approximately CFAF 0.3 billion (see paragraph 4.1.7);

(iii) Show to the ADF proof of paying into a special account opened in the name of the ECCAS General Secretariat amounts intended for financing the components entrusted to it (see paragraph 4.1.1);

(iv) Forward to the ADF the Memorandum of Understanding signed by the two countries under the aegis of ECCAS, setting forth the conditions related to ownership and management of the single border checkpoint and other facilitation measures (limitation of check-points and axle load controls) (see paragraph 4.1.5);

(v) Show proof of Government’s commitment to set up a minimum annual budget of CFAF 200 000 000 to finance the "Environmental and Forest Heritage Maintenance, Rehabilitation and Conservation" component, once the road becomes operational (see paragraph 3.2.3).

A.2.3 Other Conditions (vi) Show proof of the funding, on a semi-annual basis, of the counterpart contribution

account based on the expenditure schedule (see paragraph 4.1.7).

4

With: A.2.1 Entry into Force of the Loan Agreement Entry into force of the Loan Agreement is subject to its signature by the Borrower and the Fund, as well as fulfilment of other conditions under the General Conditions of the Fund. A.2.2 Conditions Precedent to Disbursement of the Grant In addition to entry into force of this Agreement, the first disbursement of loan resources is subject to the Borrower’s fulfilment of the following conditions, to the Fund’s satisfaction: (i) Show to the Fund proof of compensation payment to the population affected by

expropriation (see paragraph 3.2.14); (ii) Show proof of opening an account in a bank acceptable to the Fund, and transfer into

the said account of one-quarter of the counterpart contribution for the first year of the project, amounting to approximately three hundred million (300 000 000) CFA Francs (see paragraph 4.1.7);

(iii) Show to the Fund proof of paying into a special account opened in the name of the ECCAS General Secretariat, one quarter of the amount meant to finance the components entrusted to it, i.e. nearly one hundred and ninety million two hundred and fifty thousand (190 250 000) CFA Francs (see paragraph 4.1.1);

(iv) Forward to the Fund the Memorandum of Understanding signed between the Republic of Cameroon and the Republic of Congo under the aegis of ECCAS, setting forth the modalities related to ownership and management of the single border checkpoint and other facilitation measures (see paragraph 4.1.5);

A.2.3 Other Conditions (v) To avoid the suspension of disbursement during the project implementation

phase, the Borrower undertakes to show proof of making half-yearly payments into the counterpart contribution account and the special account, indicated respectively in paragraphs (ii) and (iii) above, based on the expenditure schedule (see paragraphs 4.1.1 and 4.1.7).

A.2.4 Commitment (vi) By signing this document, the Borrower undertakes to provide a minimum

annual budget of two hundred million (200 000 000) CFA Francs to finance the “Environmental and Forest Heritage Maintenance, Rehabilitation and Conservation” component, once the road becomes operational (see paragraph 3.2.3).