Announcement of Credits of 10.5 Million Dollars from IDA and 3.5 Million Dollars from Sweden to Tunisia on July 1, 1970

• INTERNATIONAL DEVELOPMENT ASSOCIATION 1818 H STREET, N.W .. WASHINGTON D. C. 20433 TELEPHONE: EXECUTIVE 3-6360 Subject: Credits of $10.5 million from IDA Press Release No. 70/39 IDA and $3.5 million from Sweden July 1, 1970 to Tunisia Further improvement and expansion of the water supply in Tunisia's main cities, towns and tourist areas will be undertaken with the assistance of credits from Sweden and the International Development Association (IDA) totaling the equivalent of $14 million. Water resources in Tunisia are inadequate and located at considerable distances from the main population centers and principal tourist areas. The urban population is growing twice as fast as total population, and water consumption and demand are • growing faster than either. critical. The water supply to tourist areas is particularly Tourism has now supplanted phosphates as Tunisia's largest source of foreign exchange earnings, bringing in the equivalent of $40 mill.ion annually. At present tourism employs some 10,000 rieople and is expected to employ 15,000 more in the next four years. The phenomenal growth of tourism cannot continue unless an adequace water supply is assured. Over 70% of the works to be undertaken with Swedish and IDA assistance will improve the supply of water in tourist areas. The Tunisian Government is carrying out a $58 million National Water Supply Pro- gram for 1968-73 and has set up a national water authority, Societe Nationale d 1 Exploitation et de Distribution des Eaux (SONEDE), to implement the program and provide mot.·e effective management for the country's network of potable water sup- plies. The Progr~ will cover the water supply requirements of the a.:,:eas concerned at least up to the end of the 1970s • • In 1969 Sweden and the World Bank lent $20 million for the first phase of the program consisting mainly of major supply works for the most densely populated /more IDA P.R. No. 70/39 - Tunisia-Water Supply - 2 areas -- Tunis, and the regions of the Sahel and Cap Bon. The new financing will ~ assist the second phase under which water supplies will be improved in the industrial cities of Menzel-Bourguiba and Bizerte, Beja and Sfax, and important tourist centers in Cap Bon, the Sahel and southern Tunisia. The works for the Sahel and Cap Bon will complete construction started under the first water supply project. The works to be undertaken are mainly the construction or reinforcement of transmission pipelines, but they will also include wells, pumping stations, storage tanks and a few distribution mains. Consultants will prepare studies for future water supply projects. Both the IDA credit, of $10.5 million, and the Swedish credit, of $3.5 mil- lion, will be extended to the Republic of Tunisia for a term of 50 years, including 10 years of grace; they will be interest-free but will carry a service charge of • 3/4 of 1%. The Government will in turn re-lend the proceeds of the Swedish credit to SONEDE on the same terms. The IDA credit will be re-lent to SONEDE for a term of 25 years, including five years of grace, with interest at 7%. The total cost of the phase of Tunisia's National Water Supply Program being assisted by Sweden and IDA is estimated at the equivalent of $19.2 million. The Swedish and IDA financing will cover all foreign exchange expenditures and part of local expenditures. The remaining costs will be financed partly by SONEDE from its own resources and partly by the Government of Tunisia. SONEDE is financing the remaining costs of the 1968-73 Program ($10.6 million) mainly with its own funds and some foreign bilateral assistance. - 0 - •