The European Investment Bank (EIB), the European Union's long-term financing institution, announces loans totalling EUR 83.1 million(1) for development of the private sector and priority roads in Tunisia:
EUR 53.1 million in favour of the Republic of Tunisia for financing the implementation of eight road improvement works designed to promote economic growth and to enhance the quality of urban life in Greater Tunis, as well as in the cities of Béja, Fouchana-M'hamedia, Gabès and Nabeul. The finance contracts have been signed in Tunis by Mr Ghannouchi, Minister for International Cooperation and Foreign Investment.
The works to be carried out in the country's capital, where 22% of Tunisia's population is concentrated, are an essential component of the Road Master Plan drawn up by the authorities to improve road safety and traffic flows in the north of Greater Tunis, and include construction of an expressway between La Marsa and Gammarth. The road improvement works comprise bypasses with a total length of 44.8 km at Fouchana-M'hamedia, Gabès and Nabeul and an interchange at Béja.
These schemes complement those already financed by the EIB, with loans totalling EUR 98 million, in 1994, 1995 and 1997, which centred on improvement and extension of priority roads in Tunis, Ariana, Charguia, Sfax, Sousse and Soliman.
The new measures, to be undertaken between now and 2002 by the Ministry for Equipment's General Directorate for Roads and Bridges, will reduce bottlenecks and congestion, creating time savings through improved traffic flows, as well as having a beneficial effect on the environment by cutting vehicle exhaust emissions.
EUR 30 million from risk capital resources to build up the equity of private companies undergoing modernisation and public companies, recently privatised or in the course of being privatised. The aim of the EIB's loan is to provide the beneficiaries with a stronger base for future investment and to facilitate the privatisation process, under way since 1989, with a view to subsequent public quotation. During an initial phase, the credit line will be open to the following financial intermediaries: Banque de Développement Économique de la Tunisie (BDET), Banque de Tunisie, Société de Participation et de Promotion des Investissements (SPPI), the TUNINVEST Group, COTIF sicar and SIDCO sicar.
This EIB operation supports the Tunisian authorities' efforts to promote the development of a more open economy and is designed mainly to assist companies in preparing for market liberalisation with a view to progressive establishment of a free trade area with the European Union. It complements the EUR 50 million global loan for Tunisian enterprise extended to the country's banking system in December 1998 under the upgrading programme, the EUR 15 million operation mounted in October 1997 for privatisation of public enterprises and the EUR 8 million and EUR 15 million loans from risk capital concluded in October 1995 and December 1997. The overall amount which the EIB has committed to the Tunisian corporate restructuring programme now runs to EUR 138 million.
The EIB is a lead player in implementing the European Union's "Euro-Mediterranean Partnership" and its priority objectives. In this context, a mandate has been handed down for the period 1997-2000 to provide up to EUR 2 310 million of funding for projects in the twelve non-EU Mediterranean countries that have signed cooperation and/or association agreements with the EU. The Framework Contract governing the EIB's operations in Tunisia under this mandate was signed in July 1997.Over the years, the Bank has mounted operations in Tunisia, as in most of the Maghreb and Mashreq countries, initially under Financial Protocols concluded between the EU and individual non-member Mediterranean countries, and subsequently through mandates entrusted to it for lending throughout these countries. Consequently, over the period 1978-1996, Tunisia attracted a total of EUR 418 million under four financial protocols, in addition to which a further EUR 97.5 million was drawn from the horizontal cooperation facility covering the period 1992-1996.Tunisia has benefited from an aggregate of EUR 371 million under the Euro-Mediterranean Partnership. Furthermore, for the past 10 years, the EIB has been managing risk capital on behalf of the EU. A long-term financing instrument (up to 25 years), risk capital is a means of tailoring remuneration and repayment clauses to the performance of the project financed, while at the same time consolidating the capital base of the promoter.Since it began operations in Tunisia, the EIB has lent almost EUR 1 billion in all to finance various industrial, agricultural-processing, transport and environmental projects, including EUR 85 million in the form of risk capital.
(1) EUR 1 = TND 1.25050, USD 1.07420, 0.647500 GBP.