Southern Oases Hydraulic Infrastructure



Project number:


Business sector:

Municipal and environmental infrastructure

Notice type:


Environmental category:


Approval date:

23 Jun 2021



PSD disclosed:

19 Jul 2019

Translated version of this PSD: ArabicFrench

Project Description

Provision of a sovereign loan of up to EUR 55 million to the government of Tunisia to finance the modernisation of the public hydraulic infrastructure serving oases of four water-scarce southern governorates of Gabes, Gafsa, Kebili and Tozeur.

The proposed EBRD loan will finance the (i) rehabilitation and/or replacement of up to 23 deep boreholes; (ii) decommissioning of up to 20 deep boreholes; (iii) rehabilitation and construction of associated hydraulic infrastructure (including, borehole heads, water cooling systems, pumps and meters); and (iv) improvements of the irrigation and drainage networks (the "Project").

Project Objectives

The Project aims to restore and enhance the resilience of 37 oases ecosystems and to improve access to water resources across the four southern governorates. The Project will improve access to irrigation water to over 30,000 farmers and their immediate families living in the catchment area of the Project and will result in substantial economic and social benefits. In the absence of viable immediate alternatives, the Project will tap into non-renewable groundwater as a transition solution essential for maintaining socioeconomic stability, securing livelihoods, catalyzing women and youth economic inclusion opportunities and minimising emigration rates in the region over the next 30 years.

Transition Impact

The transition impact of the Project stems from the following key qualities:

Inclusive: The Project will reduce regional disparities in terms of access to local economic opportunities and promote economic inclusion for women and young people especially. The Project will generate a substantial number of full time and seasonal agricultural jobs, mostly for women, by promoting opportunities in downstream sectors and in greenhouse cultivation. The Project will  promote the participation of women in the decision making bodies related to water management at the local level. Finally, the Project will support the upskilling and training of local women and men on improving the efficiency of water use, utilising modern agricultural techniques and adding economic value through increasing entrepreneurship opportunities.

Well-Governed: The Project will promote (i) enhanced operational, organisational and asset maintenance capacity at the local level; (ii) improved governance structures by strengthening the water management contracts and enforcement of illegal drilling; (iii) stakeholder awareness to conserve water resources; (iv) implementation of tariff reforms in line with a nationwide survey related to the pricing strategy for irrigation water.

Client Information


Implementing Entity: Ministry of Agriculture, Hydraulic Resources and Fisheries ("MAHRF")

The MAHRF is the implementing ministry responsible for developing and implementing water production and distribution policies, including state-owned irrigation infrastructure management and water conservation and efficiency programmes. MAHRF supervises and coordinates 24 regional irrigation and agricultural development agencies ("CRDAs").

Beneficiaries: Relevant CRDAs and water users' associations ("GDAs")

The 4 CRDAs pertaining to the Project catchment area represent the MAHRF at the governorate level and manage the provision of irrigation water at the borehole level.

The 42 GDAs pertaining to the Project catchment area are responsible for the provision of water within the irrigated perimeters and for the O&M of the irrigation and network networks.

EBRD Finance Summary

EUR 55,000,000

Total Project Cost

EUR 55,000,000 

Environmental and Social Summary

Categorised B (2014 ESP). The Project involves the rehabilitation of existing irrigation infrastructure associated with selected boreholes in the four southern governorates. These governorates, and more widely Southern Tunisia, rely almost entirely on fossil groundwater from the Northern Sahara Aquifer System ("SASS") for irrigation. While the SASS is a non-renewable aquifer whose quantity and quality will eventually decline, the Project aims at enhancing the resilience of the oases systems by improving water efficiency and reducing water losses and the proposed works do not constitute a greenfield or a major extension project. In light of the sustainability situation of the aquifer, the EBRD will support the MAHRF through a number of Technical Assistance programs in implementing a long term and sustainable water strategy to address water scarcity in the southern region, including the promotion of the use of non-conventional water resources such as desalination and wastewater and a strategy to diversify the local economy away from water-intensive industries. 

Independent consultants have undertaken an extensive Environmental and Social Assessment as part of the Feasibility Study ("FS"). The FS exercise started in 2017 and included, inter alia: an environmental and socio-economic baseline; water resources assessment; climate change risk and vulnerability assessment; assessment of past and current levels of land use and agricultural yields and opportunities for improving crop diversity and yields; technical assessment of the irrigation and water supply infrastructure and services; an environmental and social audit; and other aspects of risk assessment. 

Different project alternatives were assessed in terms of design, cost, environmental and social considerations in order to result in the best strategic solution in terms of the chosen scope. The no-project alternative was also duly considered but was not favoured due to the rising socio-economic challenges in this agricultural-dependent region of Tunisia. The priority investment program proposed by the FS consultants was tailored to maximise the Environmental and Social ("E&S") benefits, of the Project, which can be summarised as follows:

  • Optimise water resources management and reduce water losses from 54% to 39%
  • Optimise irrigation water supply which will increase crop yields and incomes within the Project governorates
  • Improve governance and management of the boreholes
  • Reduce soil salinisation
  • Improve management of two RAMSAR sites in the Project Area
  • Decrease the proliferation of illegal boreholes in the upper aquifer
  • Increase biodiversity of date palms and other agricultural crops in Project oases
  • Create direct and indirect employment opportunities during the construction and/or operation phases of the individual Project components
  • Reduce pest infestations and the need for pesticides use
  • Decrease out-migration and enhanced national security.
  • Reduce conflicts between competing water users (e.g. hammams and oases)
  • Enhance women's socioeconomic status by increasing their access to economic opportunities related to agriculture, their involvement in GDAs and decision making around water.

Whereas, main potential adverse impacts from the Project implementation are the following:

  • Temporary economic displacement may occur during the construction phase in the case of borehole rehabilitation, where the irrigation water supply would be interrupted if there is no nearby borehole from which water may be diverted.
  • Soil and water pollution risks emanating from construction works
  • If construction or decommissioning of the proposed Project boreholes is not correctly performed, this may pose a risk to groundwater quality because of potential cross contamination of aquifer units and gypsum layers and from the land surface.
  • Adverse operation impacts are mainly associated with groundwater depletion and salinisation due to excessive and uncontrolled water abstraction.

The due diligence has included the development of an extensive Environmental and Social Action Plan ("ESAP"), which includes a series of actions to structure the Project in line with the Bank's E&S requirements.  These include the development of E&S management systems and plans; contractor E&S provisions; strengthen the human resources and capacity building in terms of E&S matters; undertaking resource efficiency analysis and longer term sustainability analysis; implementing water efficiency measures for both the greenhouses and oases irrigation; provisions to manage labour and biodiversity risks; health and safety requirements; promotion of diversified crops cultivation; appropriate consideration of dredged material disposal; and the undertaking of the necessary monitoring and maintenance of the infrastructure. 

The due diligence included the development of a Stakeholder Engagement Plan, a Non-Technical Summary, a Groundwater Sustainability study and the E&S Management and Monitoring Plans which will be disclosed to guide stakeholder engagement and awareness raising and to communicate details of the Project.

Technical Cooperation

The Project is expected to benefit from the following Technical Co-operation assignments.


  1. Feasibility study covering technical, environmental, economic and financial due diligence aspects of the Project.


  1. Assistance to the Project Implementation Unit in tendering, managing the procurement cycle and mitigating E&S risks and impacts;
  2. Support to Institutional Reforms, focused on development of a long term and sustainable water management strategy to address water scarcity for the region;
  3. Development of a Corporate Development and Stakeholder Participation Programme at the local level;
  4. Provision of local trainings, covering youth inclusion and women's economic participation in the Southern Oases.

Company Contact Information

Mnajja Abdelhamid
+216 71 78 17 56
+216 71 28 80 71
30 Avenue Alain Savary, Tunis 1002, Tunisia

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