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AfDB approves USD 75 million non-sovereign guarantee corporate loan for energy project in Southern Tunisia


The Board of Directors of the African Development Bank (AfDB) Group approved on June 26 a 7-year, non-sovereign guarantee, USD 75 million corporate loan to the Entreprise Tunisienne d’Activités Pétrolières (ETAP), the Tunisian state-owned oil and gas exploration and production company, to finance part of the South Tunisian Gas Project (STGP)/ Nawara project.

The STGP (Nawara) Project involves the construction of gas transportation and treatment facilities to bring stranded and associated gas from the south of Tunisia (Nawara concession and others) to market. It comprises:

  • a Central Processing Facility (CPF) that will collect gas received from the Nawara field to be compressed prior to transport via the gas pipeline for the commercial gas and the Trapsa oil pipeline for the condensates;
  • a 370 km pipeline for rich gas, condensates and commercial products with a design capacity of 10 million cubic metres/day; and
  • a gas treatment plant (GTP) located on the coast in the Ghannouch industrial area near Gabès that will produce marketable products (natural gas, propane and butane).

The project is being constructed in a 50/50 joint venture by ETAP and OMV Tunisia GmbH, the Tunisian subsidiary of the OMV Austria, the largest listed industrial company in Austria and the leading energy Group in Central and Southeastern Europe.

Today in Tunisia, more than 90% of power capacity is provided through gas-fired power generation. Almost half of the gas needed to generate electricity is imported via gas pipeline. In addition, the current existing pipeline linking the Sahara region, where most of hydrocarbon resources are located, to the industrial zone of Gabès has reached its capacity limits. Thus, the country’s energy deficit will exacerbate if no additional investment is made in infrastructure.

The STGP (Nawara) project will help reduce importation of gas and also increase hydrocarbon exports. More importantly, the project represents the backbone of gas infrastructure network and will lay the foundation to develop hydrocarbon resources for future energy sufficiency.

The project will add value to local natural resources, reduce current imports of gas in the country, strengthen the energy infrastructure of Tunisia and benefit local and national SMEs through outsourced activities. The country will reap benefits from STGP as a main shareholder, and will strengthen macroeconomic resilience thanks to currency/FX savings on imports substitution (USD 3 billion) and revenues to the state (USD 1.1 billion). The enhanced gas transport infrastructure will encourage further foreign direct investment in the exploration and development of oil and gas fields in the southern region. Finally, the project is expected create around 100 jobsduring operation phase.

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