Announcement of Tunisia Improves Access to Urban Housing on May 22, 1989

FOR IMMEDIATE RELEASE World Bank 1818 H Street, N.W., Washington, D.C. 20433, U.S.A.* Telephone: (202) 477-1234 BANK NEWS RELEASE NO. 89/ 73 Contact: Fawzi Rihane (202) 473-2675 TUNISIA IMPROVES ACCESS TO URBAN HOUSING WASHINGTON, May 22, 1989 -- Tunisia's program to improve access to low- income urban housing and to strengthen key institutions in the sector will be financed by a $58 million World Bank loan. The project, the fifth of its kind in Tunisia to be assisted by the World Bank, will improve housing finance by increasing the private sector's share in housing development, further mobilizing domestic savings, and rationalizing the use of public resources. The project includes provisions to restructure and transform the former housing finance agency, the Caisse Nationale d'Epargne Logement (CNEL), into a full-fledged housing bank (Banque de l'Habitat) operating with greater flexibility and competing with other financial institutions. CNEL has experienced difficulties because of rigid regulations concerning savings and lending products which resulted in withdrawals by depositors. Banque de 1'Habitat (BH) will receive a $51 million line of credit to finance activities such as land development, housing construction, acquisition, extension and rehabilitation. Technical assistance and training will be provided under the project. The project will also support efforts of Ministry of Housing to implement and monitor a new housing policy adopted in June 1988 and the restructuring of two parastatals: the Societe Nationale Immobiliere de Tunisie (SNIT), a housing company, and the Agence Fonciere de l'Habitat (AFH), a land developer. The land-management system will be improved by symplifying land transactions and registration procedures, and improving the security of tenure. Funds will be provided for the production of maps and topographical plans. The World Bank loan is for 17 years, including five years of grace, with a variable interest rate, currently 7.65 percent, linked to the cost of the Bank's borrowings. It also carries an annual commitment charge of 0.75 percent on the undisbursed balance. Note: Money figures are expressed in U.S. dollar equivalents.