Translated version of this PSD: French
A senior loan of up to EUR 85 million to Societe Tunisienne de l'Electricite et du Gaz ( "STEG" or the "Company"), to finance the reinforcement of the electricity transmission network in North-Eastern Tunisia (the "Project").
The Tunisian energy sector is in crucial need of investments due to demand outpacing supply.
Tunisia's socio-economic development, marked by the growth and modernisation of industries and services, and the growing population's enhanced living standards have spurred increasing demand for electricity and a substantial increase in peak demand.
Under the Network Equipment Program of the 12th Five-Year Socioeconomic Development Plan (2012-2016), STEG will enhance the quality of its service through an electricity network rehabilitation and modernisation programme. The Project forms an integral part of this programme.
The Project will enhance the performance and reliability of the electricity transmission and distribution network and, prepare the Tunisian grid for future additional renewable capacity.
Setting standards for business conduct
The objective of the Project is to create a reliable and more efficient transmission and distribution network. Tunisia is facing growing demand and rising mid-day peak demand during summer and has planned to build several power plants in the next few years to address these challenges. The network needs to be strengthened and expanded to be able to welcome this new generation capacity in the best conditions.
Network losses have been gradually decreasing over the past few years and the investment program will contribute to further reductions. The improved efficiency will also result in reduction of CO2 emissions.
Setting standards for corporate governance and business conduct
The Project will be the Bank's first engagement with STEG and the second with a state-owned entity in Tunisia. It will allow the Bank to engage with the Company for the implementation of a policy dialogue to identify solutions to ensure the financial and operational sustainability of STEG, corporate governance improvements and capacity building assistance.
SOCIETE TUNISIENNE DE L'ELECTRICITE ET DU GAZ
STEG is Tunisia's 100% state-owned vertically-integrated national electricity and gas utility company, and is under the supervisory of the Ministry of Energy and Mining. It was founded in 1962 (law- Decree n 62-8 dated on 03/04/1962), when the Tunisian Government decided to nationalize the generation, transmission, distribution, import and export of electricity and gas, entrusting these activities to STEG.
EBRD Finance Summary
A sovereign-guaranteed loan of up to EUR 85 million for STEG to be provided alongside a sovereign loan from the European Investment Bank.
Total Project Cost
Up to EUR 170 million
Environmental and Social Summary
Categorised A. The construction of high voltage overhead electrical power lines is included in EBRD’s list of Category A projects and requires an Environmental and Social Impact Assessment (ESIA).
An Environmental Impact Assessment (EIA) was carried out by the Project owner and, based on a gap analysis against EBRD Performance Requirements (PR) carried out by ESD, a supplementary Disclosure Package was prepared by an independent consultant covering one underground and two overhead transmission line segments and associated substations. The Disclosure Package is subject to a 120 days disclosure and was released on 19.02.2016. The Project is structured to meet EBRD and EU EIA Directive requirements.
The Project will interconnect areas which are densely inhabited or used for intensive economic activities, and therefore possible impacts on settlements and livelihoods were assessed. The potential impacts on the bird population were also reviewed and a strategy to minimize impacts on birds was agreed with the Client. Negative impacts on habitats or species listed in the EU habitat directive are not expected. Two of the transmission line segments mainly extend through agricultural areas, with short sections crossing non cultivated land. The third line will be underground, through the Ariana neighbourhood of Greater Tunis.
The main risks identified during the due diligence process are those associated with some potential limited impacts on livelihoods and associated compensation payments, as well as possible risks for bird populations. Contractor management and especially health and safety during the construction phase were also identified as a potential risk, as the construction works will require a significant volume of works at height and works in excavations. These risks are addressed through specific plans whose implementation is required by the ESAP.
No greenhouse gas assessment is required.
Standard monitoring procedures will apply to the Project.
There is an Environmental and Social Impact Assessment available for this project
A pre-signing Technical Cooperation (TC) has been provided by the Bank's Shareholder Special Fund to finance the environmental and social due diligence of this Project. An associated postsigning TC package will be provided and will mainly target corporate governance improvements, corporatisation of the state-owned company and risk management improvements.
Company Contact Information
Monsieur Abderrahmen MZIOU
For business opportunities or procurement, contact the client company.
EBRD project enquiries not related to procurement:
Tel: +44 20 7338 7168
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