47 Million Euros to Tunisia to Strengthen the Performance of the Electricity Distribution Network

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Tunis, 14 October 2009 - The Tunisian Electricity and Gas Company (Société Tunisienne d’Electricité et du Gaz (STEG)) and the African Development Bank (ADB) Group on 13 October 2009 signed a loan contract of 47.570 million Euros (equivalent to DT 90 million) for the partial financing of the Electricity Distribution Networks Rehabilitation and Restructuring Project for an overall cost estimated at DT 112 million. The signing ceremony took place at the Tunisian Ministry of Development and International Cooperation in Tunis.

The agreement was signed for the Tunisian delegation by Mr. Mohamed Nouri Jouini, Minister of Development and International Cooperation, and Mr. Othman Ben Arfa, Chairman and Managing Director of STEG. Mr. Bobby Pittman, Vice-President for Infrastructure, Regional Integration and the Private Sector, represented the ADB.

The loan is the eighth granted to STEG, and reflects ADB’s interest in financing the electricity sector.

The loan, which is guaranteed by the Tunisian Government, will be repaid over a period of 20 years, with a five year grace period and a variable interest rate based on the 6-month EURIBOR rate. 

The efforts made by STEG in electrification over the past few decades have virtually completed the electrification of the country. The current overall electrification rate is 99.8%.

In continuation of efforts made by STEG to increase the performance of its electricity distribution networks, the first multi-year rehabilitation programme was put in place since 2002

Under the 11th Plan, STEG decided to further consolidate the results, and adopted the 2nd programme which aims at improving the performance of distribution networks.
The project components are:

  • The construction of 1,630 km of overhead lines (887 km MV and  743 km LV)
  • The laying of 486  km of underground lines (423 km MV and 63 km LV)
  • The construction of MV/LV transformer stations
  • The procurement of technical equipment (specialized machines, standby generators and mobile cabins)
  • Project management (implementation study, works inspection and environmental monitoring)With this 8th electricity project, the Bank’s net total commitment in the sector amounts to 250 million Units of Account, which is equivalent to about DT 500 million.

STEG and ADB are satisfied with the current level of cooperation, and will continue to work towards further consolidating this partnership, especially in the financing of STEG’s investment programmes.