Announcement of Twelve Million US Dollars Loan for a Power Project in Tunisia on April 6, 1972

• 1818 H STREET, N.W., WASHINGTON D. C. 20433 TELEPHONE: EXECUTIVE 3-6360 Bank Press Release No. 72/17 Subject: $12.0 million loan for a power April 6, 1972 project in Tunisia The World Bank has approved a loan of $12. 0 million to the Societe Ttmisienne de l'Electricite et du Gaz (STEG), a company responsible for all public power and gas services in T\lllisia. The loan will help finance the foreign exchange cost of a power project. This will be the Bank's second loan to STEG, bringing the total lent to $19.5 million. The earlier loan of $7.5 million for a gas pipeline was made in February 1971, in conjunction with a $2.5 million loan from the Kuwait Fund for Arab Economic Development. The project consists of two 20-megawatt gas turbines, transmission, dis- tribution system expansion and consulting services for future plant and • institutional development. The project will meet forecast power demand in 1974 • STEG now has under construction the Rhennouch steam plant (60 megawatt), financed by the French Government, and scheduled for completion towards the end of 1972. The two t1ew 20-megawatt gas turbines will also be located at Rhennruch. The principal users of electricity in Ttmisia are the industrial, mining and tourist sectors in which 1,250 consumers in 1970 absorbed about 70% of: total sales. The remainder was sold to 283,000 donestic and small irrigation cus- tomers. About 70% of STEG's power sales are in the economically active and more densely populated northem part of the country. So far, investment in rural electrification has been limited, but STEG is planning to intensify its activities in this field. The total cost of this project is estimated at $16.7 million. The new loan of $12.0 million will cover the foreign exchange component. The local expenditures will be financed from STEG's internal cash generation. The loan to STEG will be guaranteed by the Republic of Tunisia. It will bea~ interest at 7!;.% per annum. It will have a term of 20 years, including three years of grace. • Three United States financial institutions are participating in the. Bank loan to STEG for a total amount of $780,000. They are the Western Pennsylvania National Bank, Pittsburgh; Chemical Banlc~ New York; and The Riggs National Bank of Washington, D.C. - 0 -  • April 6, 1972 PROJECT: Power COUNTRY: Tunisia TOTAL COST: $16.7 million BANK FINANCING: $12.0 million IMPLEMENTING ORGANIZATION: Societe Tunisienne de l'Electricite et du Gaz, 38, rue Kemal Ata~urk, Tunis; Cable Address: GAZELEC; Telex: 720; Phone No.: 243-522. PROJECT DESCRIPTION: The project constitutes 13.4% of STEG's 1971-76 • power expansion program and consists of 2 x 20 megawatt gas turbines at Rhennouch, tra"smission, substation and distribution system expansion in 1972-73, and consulting services. PROCUREMENT: Supply and erection of gas turbines, transformers, switchgear, and transmission lines; supply of distribution system equipment• International competitive bidding. CONSULTANTS, TECHNICAL ASSISTANCE: Electricite de France (EDF) will continue to advise on operating and technical matters. Peat, Matwick, Mitchell (Paris) will implement continuous invoicing and some aspects of financial control. EDF will be engaged to advise on an overall manage- ment information system and the completion of a tariff study. Consult- ants will be selected to advise on system analysis to improve system stability and the investigation of potential power plant Rites for future use and the development of a rural electrification program. ESTIMATED COMPLETION DATE: Deceni>er 197'•· - 0 - •