The European Investment Bank (EIB), the long-term financing arm of the European Union (EU), announces a loan of EUR 30 million (1) towards construction of a new light metro line in the Tunisian capital extending urban rail services to commuters in the south of the conurbation.

The project works focus on construction of a new 6.7 km line linking the central station to the El Mourouj district with a resident population of some 80 000 set to double over the next ten years. They also include a 3.2 km section of the existing line 1 to be upgraded for use in conjunction with the new line reaching farther out into southern Tunis and connecting commuters here with the town centre. At the same time, ten new stations are being built under this project, together with bus and metro interchanges, complementary works on the joint Southern section (power, track equipment, traffic management and other facilities), as well as acquisition of 15 coach sets with a capacity of some 300 passengers each. The EIB's loan is part of a cofinancing package mounted in tandem with Germany's Kreditanstalt für Wiederaufbau (KfW).

The works funded by the Bank form part of the Ninth Development Plan for the Greater Tunis area. They are scheduled to be opened to traffic by early 2005 and the promoter to whom they have been entrusted is SMLT (Société du Métro Léger de Tunis). In addition to creating as many as some 2000 job opportunities during the construction phase, the project will ultimately contribute significantly to improving the quality of life within this North African capital. It is the first project of its kind to be financed by the EIB in one of the Mediterranean Partner Countries; hitherto, EIB urban environmental loans have targeted improvement of living conditions through support for sewerage, sewage disposal and waste-processing schemes in a number of towns in Tunisia, Algeria, Morocco, Egypt, Jordan, Lebanon, Gaza and the West Bank.

The European Investment Bank, the European Union's financing institution, is a lead player in implementing the EU's "Euro-Mediterranean Partnership". In this context, a mandate has been handed down to the EIB for the period 2000-2007 to provide up to EUR 6 425 million of funding in the EU's twelve Mediterranean Partner Countries. The Framework Contract governing the EIB's operations in Tunisia under this mandate was signed in July 1997.

Since it began operations in Tunisia in 1978, the EIB has lent over EUR 1 billion in all here, including EUR 85 million in the form of risk capital drawn from EU budgetary resources, for financing various industrial, agricultural-processing, transport and environmental projects.

(1) 1 EUR = 0.596700 GBP, 1.25050 TND