Announcement of Fifty Million Dollar Loan to Tunisia on December 16, 1983

FOR FL'ALAIAM] A Mui:U I World Bank 1818 H Street, N.W., Washington, D.C. 20433, U.S.A.* Telephone: (202) 477-1234 BANK NEWS RELEASE NO. 84/30 Contact: Fawzi Rihane December 16, 1983 (202) 477-3651 WORLD BANK TO HELP TUNISIA EXPAND RURAL WATER SERVICES The World Bank has approved a loan of $50 milliion to help Tunisia expand public water supply services to some 600 villages that are estimated to have a combined population of 350,000 by the year 2005. The beneficiaries, who will have access to safe water for the first time, are mostly in low-income brackets. Tunisia's water resources are limited. The remote location of the sources and the high salinity of the water require long, costly transmission pipelines. In rural areas where the population is smaller, per capita investments become higher. As of mid-1982, about 91% of Tunisia's urban population had access to safe piped water. In rural areas only about 46% of the population had safe water supply, and only 15% were served through private house connections. The World Bank-supported project will extend water services to a larger segment of the rural population, help ensure adequate operation and maintenance of the villages' systems, and build up the operational capability of the National Water Authority (SONEDE), the project's implementing organization, to provide services in rural areas. Piped water supply systems will be installed in all Governorates except Tunis. Operating and maintenance equipment will be supplied, and a health education program carried out. Equipment for drilling exploratory wells in other villages will be provided. The project will also develop new materials and equipment to lower the cost of rural water supply systems. It will draw up a financial strategy and a framework for future systems. The project will provide credit to domestic customers in rural areas to finance house connections. From mid-1985 to 1989, SONEDE expects to install about 25,000 house connections. Besides the World Bank loan of $50 million, financing for the $104.4 million project will come from the government, $44.3 million; SONEDE, $7.2 million; and customers, $2.9 million. Before this loan, the World Bank and its affiliate for concessionary lending, the International Development Association, had lent a total of $125 million for six water supply projects in Tunisia. The Bank loan is for 17 years, including four years' grace, at an annual interest rate linked to the cost of Bank borrowings. It also carries an annual commitment charge of 0.75% on undisbursed balances and a front-end fee of 0.25% on the amount of the loan. NOTE: Money figures are expressed in U.S. dollar equivalents