OFFICE DES CEREALES PERMANENT WORKING CAPITAL

Promoter – Financial Intermediary

OFFICE DES CEREALES

Location

• Tunisia

Description

Purchase of wheat on international markets as permanent working capital required for operating the foreseen new storage capacities. Allocation under the Framework Loan "Strengthening Tunisia Food Resilience" (2022-0488)."

Additionality and Impact

The parent operation strengthens the resilience of Tunisian's food supply system by increasing the efficiency of country's cereal storage and distribution capacity in securing consumer access to staple food. This allocation, involving the purchase of permanent working capital associated with the expansion of silo capacity, will directly contribute to the country's food security and to the delivery of public goods in terms of public health and social stability in the region.

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. The Bank will provide a flexible instrument, tailored to the specific needs of the Promoter. The Bank's financial contribution is rated Excellent.

Objectives

The project is the first allocation under the parent operation. The allocation will support building the country's strategic grain reserves by financing the purchase of milling wheat for permanent working capital directly linked to the expansion and rehabilitation of storage capacity in port silos that will benefit from EIB financing. The operation contributes to the country's food security and consequently to the delivery of public goods in terms of public health and social stability in the region. It is aligned with the Tunisian strategies and the objectives of the Food and Resilience Facility of the EU.

Sector(s)

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

Under Global Europe NDICI guarantee

Under EFSD+ Guarantee

Proposed EIB finance (Approximate amount)

EUR 82 million

Total cost (Approximate amount)

EUR 180 million

Environmental aspects

The allocation is not expected to have any environmental impact beyond the footprint associated with international transport of the wheat procured.

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

Approved - 24/01/2023