Announcement of Seven Million Five Hundred Thousand US Dollars World Bank Loan for a Gas Pipeline in Tunisia on January 28, 1971

INTE~NATIONAL BANK ,FOR ·;·RECONSTRUCTION AND CDEVELOPMENT 1818 H STREET, N.W., WASHINGTON D. C. 20433 TELEPHONE: EXECUTIVE 3-6360 Bank Press Release No. 71/1:) Subject: $7.5':iiiillion. World Bank loan January 28, 1971 for a gas pipeline in Tunisia Tunisia's power sector will be strengthen~d by a World Bank loan of $7.5 million and a $2.5 million loan from the Kuwait Fund for Arab Economic 0 Development. This financing will help provide funds for constructing nearly 185 miles of gas pipeline from the El Borma oil field, to feed a new power plant at Gabes. The financing is for Societe Tunisienne de l'Electricite et du ·Gaz (S.T.E.G.), a state-owned company established by the Government in 1962, which • is implementing the Gabes power p~·,nt project, including the gas pipeline • ',I The project includes construction of a gas pipeline from the Sahara desert in the southern part of Tunisia to Gabes on the Mediterranean coast and the procurement and installation of compressors, a gas treatment station and other ancillary equipment. Gas produced in association with oil operation at El Borma has hitherto been flared off. Now this gas will be carried by the pipeline to Gabes where it will be utilized as fuel in:.the generation of electric power. The power plant, financed with French assistance, will have two JO-megawatt thermal generators and will help to meet the expected increase in Tunisia's power demand. This is the first World Bank joint lending operation with the Kuwait Fund; it will cover the foreJgn. exchange cost of the $13.6 million gas pipeline project. ~ S.T.E.G. benefited from two previous loans from the Kuwait Fund totaling more than $24 million for the purchase and installation of machinery for power pro- duction. /more Bank P.R. No. 71/7 - Tunisia - gas pipeline - 2 - The loan, which is guaranteed by Tunisia, is th~ Bank's··first in Tunisia's •• power sector. It is extended to S.T .E.G. for a pe.riod of 16 years, including a 3-year period of grace, with interest at 7-1/4% per annum. This is the fifteenth lending operation 9f the World Bank and IDA in Tunisia, bringing the total to $118.4 . million. Chemical Bank, :iiew York, is taking $365,000 of the World rfank loan. - 0 - C •