STRENGTHENING TUNISIA FOOD RESILIENCE

Promoter – Financial Intermediary

OFFICE DES CEREALES

Location

• Tunisia

Description

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.

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. 

Objectives

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.

Comments

The proposed operation is expected to fall under NDICI-Global Europe mandate, subject to confirmation.

Sector(s)

• Agriculture, fisheries, forestry - Agriculture, forestry and fishing

Under Global Europe NDICI guarantee

Under EFSD+ Guarantee

Proposed EIB finance (Approximate amount)

EUR 167 million

Total cost (Approximate amount)

EUR 550 million

Environmental aspects

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.

Procurement

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.

Status

Signed - 16/12/2022