The European Investment Bank (EIB), the bank of the European Union, announced today that it has signed finance contracts totalling EUR 250 million (TND 554 million) to upgrade road infrastructure and increase support for entrepreneurs and project promoters in Tunisia. That brings to nearly EUR 1.5 billion (almost TND 3.3 billion) the Bank's overall financing since the revolution in 2011 for the implementation of new projects in key sectors of the Tunisian economy such as energy, private sector support, infrastructure, education and social housing.
"I am delighted to be able to announce to you today that EUR 250 million – or TND 554 million – has been provided to upgrade Tunisia's roads and support businesses", said EIB Vice-President Mr Román Escolano. This is a key loan for Tunisia and its people as it is vital in terms of economic development, social cohesion and jobs. We are developing and upgrading the country's roads. We are stepping up our support for Tunisian businesses by injecting EUR 100 million into the Tunisian economy practically immediately. We are backing job creation, particularly for younger generations."
EUR 150 million (TND 333 million) to upgrade road infrastructure
The EIB announced today that it has signed a sovereign framework loan worth EUR 150 million (TND 333 million) for the upgrading of road infrastructure. This financing operation will serve to modernise some priority roads in Greater Tunis to help reduce traffic congestion in the south of the city as well as main roads in other regions of the country such as Sfax and Nabeul.
This maiden framework loan in Tunisia is tailored to the Tunisian authorities' budgetary requirements for this project as the financing will be spread out over the next four years. Thanks to the excellent collaboration between the teams of the Ministry for Development, Investment and International Cooperation, the Infrastructure Ministry and the EIB, various components of the project are already at a very advanced stage. Benefiting from the EIB's technical expertise, the loan will have a considerable economic impact and help to improve road safety in the country.
The project also benefits from the EIB's technical expertise via the financing of technical studies associated with these types of projects. This operation brings the EIB's overall support in this sector to EUR 556 million (more than TND 1.2 billion).
The signing ceremony took place on 23 February 2016 at the Ministry for Development, Investment and International Cooperation in Tunis in the presence of H.E. Yassine Brahim, Minister of Development, Investment and International Cooperation, H.E. Mohammed Salah Arfaoui, Minister for Infrastructure, and EIB Vice-President Mr Román Escolano.
Increased support for Tunisian businesses
At the ceremony, the EIB signed a guarantee agreement serving to inject ipso facto EUR 100 million (TND 222.2 million) into the Tunisian economy for the benefit of small and medium-sized enterprises. In view of the current climate, the signature of this bank guarantee is key for the beneficiaries: it will help to make EIB financing accessible to entrepreneurs and project promoters whilst at the same time consolidating Tunisia's banking sector thanks, in particular, to the long maturities of the credit lines offered by the EIB, which are increasingly rare on the market.
A letter of intent was also signed, confirming the Bank's commitment to supporting public policies promoting job creation and economic development via the introduction of financing solutions adapted to the current climate in Tunisia. In particular, that will result in the introduction of innovative products intended to facilitate SMEs' access to bank financing and foster the development of key sectors (such as agriculture, trade, etc.) in close collaboration with public (Ministries, national agencies) and private sector players and public banks (especially Banque de l’Habitat, Banque Nationale Agricole and Société Tunisienne de Banques).
This initiative forms part of the EIB's priority action to support Tunisian businesses and comes the day after the EIB's announcement of the signature of a finance contract with Banque de Financement des PME (BFPME) in the presence of Finance Minister H.E. Slim Chaker, the CEO of BFPME Ms Souhir Taktak and EIB Vice-President Mr Román Escolano. This contract will enable BFPME to benefit from some of the EUR 100 million injected.
A number of projects have already been identified by the banking partners that signed the finance contract for this credit line (PG VI). The concrete results of this new credit line are expected to very favourably impact businesses' access to finance and employment following on from the previous credit line signed with the EIB in December 2012. With the support of Tunisia's banking sector (banks and leasing companies) – this line of credit enabled more than 500 projects to be financed, thereby helping to create or safeguard more than 2 800 jobs throughout Tunisia.
