The European Investment Bank (EIB), the European Union's long-term financing institution, announces loans totalling ECU 80 million (1) in favour of the Republic of Tunisia for the purpose of developing the country's private sector and railway system as well as protecting the environment. The finance contracts have been signed in Luxembourg by Mr Ghannouchi, Minister for International Cooperation and External Investment, and Ms Obolensky, EIB Vice-President, in the presence of Mr Sioud, Tunisia's Ambassador in Brussels:
The individual contracts provide for :
- ECU 15 million from risk capital resources (2) to build up the equity of enterprises undergoing privatisation, with a view to providing them with a stronger base for future investment and to facilitating the privatisation process, under way since 1989, with the aim of a subsequent public quotation. The EIB's funds will be channelled via an intermediary institution to investors in a firm. Funds will be deployed under modern financing facilities available on Tunisia's stock exchange, such as ordinary shares, non-voting preference shares, bonds convertible into shares and investment certificates ;
- ECU 25 million, from EIB own resources, towards modernising the Tunis-Sfax-Gabès rail link, which carries 75% of passenger traffic and 40% of freight traffic on Tunisia's railway network. The project comprises rehabilitation of 180 km of track and strengthening of a number of civil engineering works, as well as acquisition of track equipment. It will help to reduce journey times by at least 45 minutes, boost the reliability of the service and cut back on maintenance costs.
- ECU 40 million, again from own resources for anti-pollution measures, dredging and backfill works in the Southern Lake of Tunis. The project forms one of the main planks of the Anti-Pollution Master Plan for Greater Tunis, the country's foremost economic region. Key components of this plan are measures to treat domestic sewage and tackle industrial pollution, to which the Bank is already contributing via a number of operations, as well as a major drive to clean up the waters in the northern and southern sections of the Lake of Tunis, of which the project forms part. Later on, as a result of the lake's rehabilitation, additional land will be made available near the city centre for low-cost housing, public health and education infrastructure and green areas.
Over the years, the Bank has mounted operations in Tunisia, as in most of the Maghreb and Mashreq countries, initially under Financial Protocols concluded between the EU and individual non-member Mediterranean countries, and subsequently through mandates handed down to it for lending throughout these countries. Consequently, over the period 1978-1996, Tunisia attracted a total of ECU 418 million under four financial protocols, in addition to which a further ECU 97.5 million was drawn from the horizontal cooperation facility covering the period 1992-1996. The new Euro-Mediterranean Partnership has resulted in a mandate for the Bank to provide up to ECU 2 310 million in 12 non-member Mediterranean countries, including Tunisia. The above two loans from own resources have been signed pursuant to this latest mandate. Furthermore, for the past 10 years, the EIB has been managing risk capital (2) on behalf of the EU enabling it to commit such funds for privatisation schemes.
(1) The conversion rates used by the EIB for statistical purposes during the current quarter are those obtaining on 30 September 1997, when : ECU 1 = GBP 0.69, USD 1.113, TND 1.243.
(2) In addition to loans from its own resources, the EIB also deploys risk capital assistance from EU budgetary funds. A long-term financing instrument (up to 25 years), risk capital is a means of tailoring remuneration and repayment clauses to the performance of the project financed, while at the same time consolidating the capital base of the promoter. To date, some ECU 40 million in risk capital (including 25 million which has gone to the Middle East) - principally in the form of global loans to local banks - has been directed towards establishing or underpinning some 180 joint ventures, serving to create around 13 000 jobs and mobilising over ECU 600 million in new investment.