It’s a huge objective.
Signature(s)
Amount (.*)
€ 167,000,000
Countries
Sector(s)
Tunisia
: € 167,000,000
Agriculture, fisheries, forestry
: € 167,000,000
Signature date(s)
11/03/2024 : € 17,000,000
16/12/2022 : € 150,000,000
Link to source
Data sheet
Other links
Summary sheet
Release date
25 October 2022
Status
Reference
Signed | 16/12/2022
20220488
Project name
Promoter - financial intermediary
STRENGTHENING TUNISIA FOOD RESILIENCE
OFFICE DES CEREALES
Proposed EIB finance (Approximate amount)
Total cost (Approximate amount)
EUR 167 million
EUR 550 million
Location
Sector(s)
- Agriculture, fisheries, forestry - Agriculture, forestry and fishing
Description
Objectives
The EIB loan is expected to finance the rehabilitation and construction of new silos and strategic cereal reserves in the country, to increase Tunisia's cereal storage capacity. It will also support the required permanent working capital of the project promoter, to ensure operations in the current unstable context.
The project aims to address the current grain price spike resulting from the ongoing conflict in Ukraine and build long-term capacity of Tunisia's grain supply chains. It should create significant additionality and social benefits by contributing respectively to the country's food security and generating important externalities in terms of improving nutrition and public health.
Additionality and Impact
The project responds to the grain supply shock and the trade distortions caused by the Russian invasion of Ukraine in a way that it builds long-term capacity and resilience in the country's food systems. It creates significant additionality and social benefits. The project contributes to the country's food security and generates significant externalities in terms of ensuring consumer nutrition and public health, as well as contributing to climate adaptation by reducing post-harvest losses in storing and handling of cereals. The operation enhances social stability in the region - a valuable public good, not supplied by the market without public intervention.
The project is a top priority for the Tunisian government, as evidenced in the national Emergency Food Crisis Response Project. Policy-wise, it is strongly aligned with the geographic pillar of the EU's external action (NDICI), specifically the thematic pillars "Inclusive Food Security" and "Social protection" and NDICI's Investment Framework that promotes Sustainable Agriculture. It will contribute to EU's "Food Resilience Facility" in the Southern Neighbourhood.
The EIB contribution to the project is high. EIB will provide significantly longer maturity, grace and availability periods to what is alternatively available to the Borrower on the local market. Through the Framework Loan, the Bank will provide a very flexible instrument, tailored to the needs of the Promoter. The EU Delegation is expected to provide grant resources, including for a Technical Assistance to support the Promoter to prepare high quality sub-projects. Moreover, EIB Services will need to monitor the project closely to ensure compliance with disbursement conditions.
Environmental aspects
Procurement
The project is expected to contribute to climate action and environmental sustainability objectives, in particular to climate adaptation, which will be determined as part of the due diligence. Issues related to occupational health and safety of workers within the value chain will be assessed and EIB will require the Promoter to comply with EIB's Environmental and Social Standards with particular attention to Standards 8 and 9 on Labour rights and Occupational and Public Health, Safety and Security. The project will positively contribute towards social inclusion given the targeting of the subsidised bread program to reach the vulnerable population of the country. Additionally, it will support Tunisia in building resilience towards food shortages due to climate change or to food price spikes, by increasing and modernising their cereal storage and logistics infrastructure.
The Bank will require the Promoter to ensure that implementation of the project will be done in accordance with the Bank's Guide to Procurement.
Comments
The proposed operation is expected to fall under NDICI-Global Europe mandate, subject to confirmation.
Milestone
Under appraisal
Approved
Signed
8 December 2022
16 December 2022
Related documents
Related projects
Link to source
Summary sheet
Other links
Data sheet
Documents
Environmental and Social Data Sheet (ESDS) - STRENGTHENING TUNISIA FOOD RESILIENCE
Publication Date
13 Dec 2022
Document language
Main Topic
Lending
Document Number
160900848
Document Focus
Environmental Information
Document Type
Project Number
20220488
Sector(s)
Regions
Countries
Publicly available
Download now
Link to source
Other links
News & Stories
Link to source
Other links
Inside the project
How and Why
Building up reserves
Why
- Tunisia imports 95% of soft wheat used in its bread
- About 65% of its wheat came from Ukraine, and about one-tenth from Russia
- A spike in global food prices meant the country had to spend significantly more to subsidise bread
- Network of grain silos needed to be renovated and expanded to store more grain and protect against price rises
How
- New grain silos double reserves from two to four months of supply
- The renovated silos help avoid food waste by better preserving locally grown grains
- New rail infrastructure moves grain supplies around the country more efficiently
- Investment in digitalisation helps the Office des Céréales better monitor grain supplies and demand
Sectors & Countries
Story
Stocking up for resilience
In the spring of 2022, international wheat prices rose to their highest level in 20 years. In Tunisia, the official price of a baguette remained the same as it had been for more than 15 years – 0.19 Tunisian dinars (about 6 euro cents).
A subsidy programme kept official bread prices low for all Tunisians, but the cost of those subsidies was spiralling. Tunisia, which imports 95% of the soft wheat used in its bread, suddenly saw spending on grain purchases surge by $250 million.
To better resist future food price crises, Tunisia is expanding and improving it’s network of grain silos throughout the country, with the medium-term goal of doubling its reserves from two to four months of supply. The new grain silos will also help the country avoid food waste by securely preserving locally grown grain after harvest.
The Ukraine war is at the origin of more expensive, and less regular, imports of cereals, as well as other basic food.
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