Signature of headquarters agreement for FEMIP's representative office in Tunis

The Facility for Euro-Mediterranean Investment and Partnership (FEMIP) is to grant a loan of EUR 34 million (approximately TND 52 million) in support of a new capital project aimed at cleaning up the Taparura site, in Sfax, Tunisia. For many years, the coastal area of the city of Sfax has been afflicted by a serious pollution problem due to the intense industrial activity in this region.

The Taparura project forms part of a wider action programme put together by the Tunisian authorities to tackle the primary sources of pollution in the region. Sfax is the largest economic centre and main source of industrial employment in southern Tunisia. The EUR 34 million loan will be used to clean up and harness the coastal area of Taparura, close to Sfax city centre, polluted over the years by industrial activities there. The former industrial zone along the coastline currently represents an out-and-out barrier which has deprived the city of direct access to the Mediterranean Sea. Pollution from this site is threatening the beaches and coastal waters of Sfax, hampering local economic development and the growth of tourism. The project will allow depolluted land to be reallocated for both public and private activities, namely the creation of beaches, parks, sports grounds, educational, health and museum infrastructure, as well as the implementation of social housing programmes.

The Taparura project is one of a series of broader measures taken by the Tunisian authorities to improve the overall environment in the Sfax region. The project promoter is the Tunisian Ministry for Infrastructure and Housing, which will continue its policy of pollution abatement and development of public and private industrial parks to give the city back its seafront. FEMIP will be involved in the pollution abatement phase of the Sfax project, thus supporting the economic and sustainable development of the region.

The finance contract for this loan was signed today by Mr Philippe de Fontaine Vive, EIB Vice-President with responsibility for FEMIP, and Mr Mohamed Nouri Jouini, Tunisia's Minister for Development and International Cooperation.

Mr de Fontaine Vive commented: "The Sfax project helps to create a favourable climate for private investment and boost economic development, one of FEMIP's financing priorities. This is the second venture of its kind in Tunisia, following the land rehabilitation and development project near Tunis. This project is remarkable because of the extraordinary commitment shown by the Tunisian authorities to implementing a set of measures aimed at safeguarding and improving the environment."

Pollution abatement in the Gulf of Gabès

Mr de Fontaine Vive also signed an amendment to the EUR 45 million finance contract with interest subsidy for the pollution abatement project in the Gulf of Gabès. This project concerns the disposal and controlled stacking of phosphogypsum generated by the plants of the Groupe Chimique Tunisien (GCT) in Gabès. This amendment will enable GCT to complete its project within the timescale required for implementation of the environmental solution selected.

Located near Gabès, the plant owned by Groupe Chimique Tunisie processes phosphates into fertiliser. Phosphate mining makes a substantial contribution to the Tunisian economy. A joint study by FEMIP and the World Bank pinpointed the Gabès region as one of the most polluted in the Mediterranean Basin.

The works encompassed by the project concern the implementation of a set of anti-pollution measures, in particular the management of phosphogypsum. The waste generated will be transported in solid form by train to an isolated land-based site where the site used until now will be covered with an impervious layer of clay. Metering and recording equipment will be employed to monitor accidental seepage that may come from the landfill area. The purpose of these measures is to safeguard the environment and stop the deterioration of the region's marine flora and fauna.

The stacking method envisaged is the only viable technical and economic solution, as research has shown that recycling this type of waste does not produce satisfactory results. Through this loan, FEMIP and the tunisian authorities will ensure compliance with international environmental standards and recommendations.

Tunis FEMIP Office

FEMIP plans to bolster the Bank's representative network by opening representative offices in the Maghreb region. The role of these offices will be to ensure closer coordination with the public authorities and the Bank's borrowers and to develop FEMIP's activities with the local private sector. The first two offices will be opened in Tunis and Rabat. On 26 July, Mr de Fontaine Vive and Mr Habib Ben Yahia, the Republic of Tunisia's Minister for Foreign Affairs, signed the headquarters agreement paving the way for the opening of a representative office in Tunisia. This office is scheduled to be officially opened by the end of the year.

The European Investment Bank (EIB) grants loans in the Mediterranean Partner Countries (MPCs) under FEMIP, the Facility for Euro-Mediterranean Investment and Partnership. Through this facility, the Bank is especially committed to fostering the private sector and financing infrastructure that will underpin socio-economic development. To this end, FEMIP will provide an aggregate annual volume of EUR 2 billion in the form of loans but also - and this is the qualitative aspect of the facility - new lending instruments and techniques specifically designed to promote the development of the private sector.

FEMIP was set up following the conclusions of the Barcelona European Council (15-16 March 2002) and the Valencia Euro-Mediterranean Conference (22-23 April 2002). In accordance with a decision of the Brussels European Council in December 2003, it was reinforced by the addition of new elements aimed primarily at promoting the development of the private sector:

• creation of a Special FEMIP Envelope with which the EIB will finance private projects with a high risk profile and, furthermore, the creation of a Trust Fund;
• diversification of the range of financial products, particularly by seeking ways of providing funds in local currencies;
• greater dialogue with the MPCs by organising annual meetings of the Committee of Experts in order to prepare the discussions and of the FEMIP Ministerial Committee, bringing together the Finance Ministers of European and Mediterranean countries.
• establishment of local representative offices in the Mashreq region - where the Cairo office was opened in June 2003 - and also in the Maghreb region during 2004.

The Mediterranean Partner Countries are closely involved in the implementation of FEMIP: the Ministerial Committee, which is set to become the Mediterranean Ecofin Council, will play an enhanced role; its annual meeting is prepared by a high-level group of experts which comes together twice a year (this year, in Marseilles in February and Amsterdam in October). Moreover, the EIB will be expanding its local presence by opening two new offices in Rabat and Tunis, in addition to the Cairo office, inaugurated in September 2003.

FEMIP's goal is to help the Mediterranean Partner Countries meet the challenges of economic and social modernisation and enhanced regional integration, with a view to the creation of a free trade area (scheduled for 2010) between the EU and the MPCs.

The EIB has been operating in Tunisia, as an element of the financial cooperation between the EU and this country, since 1978. Its loans, totalling almost EUR 1.8 billion, primarily concern projects that have a fundamental impact on the economic development of the country, such as the financing of private enterprises, water supply and sewage disposal, industrial pollution abatement and waste management, urban roads and the Tunis public transport system, the Tunisian rail network, the ports of Tunis and Sfax, and electricity distribution. Tunisia is the third largest beneficiary of EIB financing among the Mediterranean Partner Countries.