Tunisia - Second Electrical and Mechanical Industries Project

Document of The World Bank FOR OMCIAL USE ONLY Report No. P4|flTUN REPORT AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT TO THE EXECUTIVE DIRECTORS ON A PROPOSED LOAN IN THE AMOUNT EQUIVALENT TO USS54.O MILLION TO THE REPUBLIC OF TUNISIA FOR A SECOND ELECTRICAL AND MECHANICAL INDUSTRIES PROJECT MAY 3, 1985 This document has a restricted distribution and may be used by recipients only in the performance of their ofichd duies. Its contents may not otherwise be disdosed without World Bnk authorization.  CURRENCY EQUIVALENTS CY 1984 February 1985 Currency Unit Tunisian Dinar (TD) TD US $ 1 TD 0.7768 TD 0.9037 TD 1= US$ 1.2873 US$ 1.1066 Exchange rate used in the Appraisal Report is US $1 = TD 0.83. Fiscal year = Calendar year List of Abbreviations API Agence de Promotion des Investissements Industriels BCT Banque Centrale de Tunisie BDET Banque de DMveloppement E.- nomique de Tunisie BNDT Banque Nationale de D6veloppement Touristique BTEI Banque de Tunisie et des Emirats d'Investissements BTKD Banque Tuniso-Koweitienne de Diveloppemeat BTQI Banque Tuniso-Qatarie d'Investissements CETIME Centre Technique des Industries Mecaniques et Electriques EMI Electrical and Mechanical Industries ERR Economic Rate of Return FRR Financial Rate of Return INNORPI Institut National de la Normalisation et de la Propriete Industrielle SSI Small-Scale Industries STUSID Societe Tuniso-Seoudienne d'Investissement et de Developpement .  FOR OFFICILL USE ONLY REPUBLIC OF TUNISIA SECOND ELECTRICAL AND MECHANICAL INDUSTRIES PROJECT LOAN AND PROJECT SUMMARY PROJECT Borrower: Republic of Tunisia. Beneficiaries: Banque de D6veloppement Economique de Tunisie (BDET), Banque Tuniso-Koweitienne de D1veloppement (BTKD), Societ; Tuniso-Seoudienne d'Investissement et de D1veloppement (STUSID), Centre Technique des Industries Mecaniques et Electriques (CETIME) and Institut National de la Normalisation et de la Propriete Industrielle (INNORPI). Amount: $54 million equivalent. Terms: 17 years, including 4 years of grace, at the standard variable interest rate. Onlending Terms: The Government would onlend in Dinars $50.0 million equivalent of the Bank loan to BDET ($20.0 million equivalent), BTKD ($15.0 million equivalent) and STUSID ($15.0 million equivalent) at the Bank's standard variable interest rate. BDET, BTKD and STUSID would repay their loans to the Government according to a composite amortization schedule of the subloans financed out of the proceeds of the loan. The Government would bear the foreign exchange risk. Subborrowers would be charged an effective interest rate of at least 12 percent per annum. The Government would grant $2.1 million equivalent to CETIME and $1.9 million equivalent to INNORPI. Project Description: The project would assist the Government of Tunisia in continuing the development of Tunisia's electrical and mechanical industries (EMI) through a $50.0 million equivalent line of credit to BDET, BTKD and STUSID, enabling these banks to make subloans for eligible EMI projects. The project would also provide an equipment and technical assistance package of $2.1 million equivalent to CETIME to enable this institution to expand its services to entrepreneurs in the mechanics, metal tools for foundries and electronics subsectors. It would also provide testing and control equipment and technical assistance for $1.9 million equivalent to INNORPI to enable this institution to expand its services from technical standards formulation to testing and certification This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  (ii) of instruments and equipment. The project will assist in the continuing development of EMIs, increasing output, job availability and foreign exchange earnings, and will strengthen three development banks, CETIME and INNORPI. The project involves no special risks, though some risk is attached to external factors which could depress EMI export possibilities. Nevertheless, the performance oE the EMI sector in the last few years is encouraging and testifies to the ability of local entrepreneurs to realistically identify opportunities and secure their share of identified markets. On balance, therefore, the risk appears reasonable and well worth taking in relation to potential benefits. Estimated Disbursements: Bank 1Y 1986 1987 1988 1989 1990 1991 1992 1993 - - - $ Thousand - - - - - - - - - -