Announcement of Tunisia to Expand Electric Service in Rural Communities on June 29, 1984

FOR IMMEDIATE RELEASE .World Bank 1818 H Street, N.W., Washington, D.C. 20433, U.S.A. BANK NEWS RELEASE NO. 84/108 Contact: Fawzi Rihane June 29, 1984 (202) 477-5325 TUNISIA TO EXPAND ELECTRIC SERVICE IN RURAL COMMUNITIES Tunisia is continuing the expansion of electrical service throughout the country. The latest project will connect about 35,000 new residential customers, some 1,500 pumping stations, and 50 commercial users in rural areas to the national power network. The quality of the service for some 130,000 users in about 60 cities will be improved. The World Bank is lending $38.7 million to Societe Tunisienne de 'Electricite et du Gaz (STEG) to help finance the project, which has a total cost of just under $83 million. The Government of Tunisia will guarantee the loan. This project continues the work being done under STEG's 1982-86 power distribution program. The World Bank supported this program through a loan of $41.5 million, approved in 1981. The earlier project is being implemented ahead of schedule. The new project will support STEG's program to develop rural and urban distribution systems during 1985-87. About 3,000 kilometers (km) of power lines will be installed in rural communities for the first time, and some 2,100 km of lines will be erected to improve the service in urban areas. Equipment, vehicles, and tools will be supplied, training will be provided to facilitate the implementation of the project, and to reinforce STEG's technical capabilities. STEG was established in 1962, and currently has a staff of about 6,700. With wide experience in power projects, STEG has developed into an efficient and well-operated public utility. Besides its service throughout Tunisia, the company also extends technical assistance to electricity companies in Arab and African countries. The new project is expected to be completed by mid-1988. Besides the World Bank loan, financing is expected to come from STEG, the government, and customers' contributions. The World Bank loan is for 17 years including four years' grace, with a variable interest rate, currently 10.08 percent, linked to the cost of the Bank's borrowings. It also carries an annual commitment charge of 0.75 percent on undisbursed balances and a front-end fee of 0.25 percent on the amount of the loan. NOTE: Money figures are expressed in U.S. dollar equivalents.