Announcement of World Bank Approves Thirty-Seven Million Dollars for Natural Gas Project in Tunisia on June 9, 1980

FOR IMMEDIATE RELEASE ~odd Bank 1818 H Street, N.W., Washington, D.C. 20433, U.S.A. • Telephone: (202) 393-6360 BANK NEWS RELEAS~ NO. 80/114 June 9, 1980 WORLD BANK APPROVES $37 MILLION FOR NATURAL GAS PROJECT IN TUNISIA The World Bank has approved a $37 mill ion loan to help Tunisia finance the $88 million Second Natural Gas Pipeline Project. The project will help reduce the country's fuel costs by $120 million a year through the substitution of natural gas imports from Algeria for the more expensive domes- ti C fue J O i J • Responsibility for implementing the project will fall on the Tunisian Electricity and Gas Company (Societe Tunisienne de 1 'Electricite et du Gaz), the largest commercial establishment in Tunisia. The project calls for the construction o( about 330 kilometers (km) • of buried pipelines and 170 km of branch lines to transport gas from the Algeria/Italy Intercontinental Gas Pipeline (now under construction) to Tunis, Sousse, Gafsa and Tadjerouine. Ancillary equipment, meters and fittings will be installed and cus- tomers' oil-using plant and equipment will have to be converted for dual gas and oi 1 use. Provisions have been made also for 420 man-months of local and foreign consultant services for project management, engineering and construc- tion as well as training of local personnel. Studies to determine the feasibility of expanding usage of gas in the country have also been included as part of the project. The World Bank loan is being made to the Tunisian Electricity and Gas Company with the guarantee of the Tunisian Government. It will be for a term of 17 years, including four years of grace, at an interest rate of 8.25% per annum. The Government of Tunisia will bear $21 million of the project costs, exports credits will amount to $12 mill.ion, and loans from commercial sources will account for $18 million. The First Natural Gas Pipeline Project, completed in 1972, was for • the construction of a compression and treatment plant at the El Borma oilfield to collect the gas being flared and of a high pressure pipeline to transmit this gas to the Gabes industrial area. NOTE: Money figures are expressed in U.S. dollar equivalents. FORM NO. 1121 (5-76) T E C HN I CA L DA T A PROJECT: COUNTRY: Second Natural Gas Pipeline Tunisia • TOTAL COST: $88 mi 11 ion BANK FI NANC I NG : $37 million for a term of 17 years, including 4 years of grace, with interest at 8.25% per annum OTHER FINANCING: Export Credits, $12 million; Government of Tunisia, $21 million; Commercial sources, $18 million IMPLEMENTING ORGANIZATION: Tunisian Electricity and Gas Company (Societe Tunisienne de l'Electricite et du Gaz) 38 Kemal Ataturk Street Tunis, Tunisia. Cable: GAZELEC TUNIS Telex: 12020 PROJECT DESCRIPTION: It includes: (a) construction of 330 km of buried pipe- line for supplying gas from the Algeria/Italy Intercon- tinental Gas Pipeline to Tunis, Sousse, Gafsa, and Tadjerouine; (b) installation of • fittings, ancillary equipment, and metering; (c) conversion of customers' oil-using plant and equipment to dual oil and gas usage; (d) consultant ·services for engineering, procurement, project management, and construction supervision as well as studies on the feasibility of expanding usage of gas in the country; (e) training of staff. PROCUREMENT: All procurement will be through international competitive bidding. CONSULTANTS: 420 man-months of local and foreign consultants for project engineering, management, and construction supervision. ECONOMIC RATE OF RETURN: About 50% ESTIMATED COMPLETION DATE: 19.83 • - 0 -