Document of

The World Bank

FOR OFFICIAL USE ONLY

Report No. P-7058-TUN

MEMORANDUM AND RECOMMENDATION

OF THE

PRESIDENT OF THE

INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT

TO THE

EXECUTIVE DIRECTORS

ON A PROPOSED LOAN

IN THE AMOUNT OF 57 MILLION FRENCH FRANCS

TO THE

REPUBLIC OF TUNISIA

AND

A PROPOSED LOAN IN THE AMOUNT OF 283 MILLION FRENCH FRANCS

TO THE OFFICE NATIONAL DE L'ASSAINISSEMENT

WITH THE GUARANTEE OF THE REPUBLIC OF TUNISIA

FOR A

GREATER TUNIS SEWERAGE AND REUSE PROJECT

May 6, 1997

Private Sector Development, Finance and Infrastructure Operations DivisionMaghreb and Iran DepartmentMiddle East and North Africa Region

This document has a restricted distribution and may be used by recipients only in theperformance of their official duties. Its contents may not otherwise be disclosed withoutWorld Bank authorization.

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CURRENCY EQUIVALENTS(April 1997)

Tunisian Dinar, TD 1,000 millimesTD I = USSO.9367US$1 = TD 1.0676TD 1 FRF 5.305FRFI = TD 0.1885

ABBREVIATIONS

ft = foot In = meterha. hectare mm = millimeterKm = kilometer Mm 3

= million of cubic metersinh = inhabitant m3/sec = cubic meters per secondlcpd = liters per capita per day min = minute

MEASURES AND EQUIVALENTS

Metric System U.K. System

Kilometer (km) 0 (.62 mile (mi)Meter (in) = .28 feet (ft)Cubic meter (M) = 220 gallons (g)Million cubic meters/year (Mm'/year) 0.603 million gallons per day (Mgd)Liter (1) = 0.220 gallon (g)Liters per second (/see) 19,000 gallons per day (gd)

GLOSSARY OF ACRONYMS

ANPE Agence iVationale pour la Protection de l'EnvironnementBOT = Build Operate and TransferCRDA = Commissariat Regional au DeveloppementAgricoleDGR = Direction Generale du Genie RuralERR Economic Rate of ReturnFODEP = Fonds de D6pollutionFRF = French FrancICB International Competitive BiddingIBRD International Bank for Reconstruction and DevelopmentKfW = Kreditanstaltfik Wiederau/bauLRAIC = Long Run Average Incremental CostLRMC Long Run Marginal CostMoA = Ministry of AgricultureNCB = National Competitive BiddingOED = Operations Evaluation DepartmentONAS Office National de 1'4ssaimnssementPSA = Project Specific AssessmentPSP = Private Sector ParticipationRWB = Receiving Water BodySA Special AccountSEA = Sector Environmental AssessmentSOE = Statement of ExpendituresSONEDE = Socield Vationale d'Exploitat:on ef de Distribution des EauxWHO = World Health OrganizationWTP = Willingness to PayWWTP Waste Water Treatment Plant

FISCAL YEARJanuary I - December 31

Vice President Kemal DerviDirector : Daniel RitchieDivision Chief Amir Al-KhafajiTask Manager Mohammed Benouahi

FOR OFFICIAL USE ONLY

FOR OFFICIAL USE ONLY

REPUBLIC OF TUNISIA

GREATER TUNIS SEWERAGE AND REUSE PROJECT

LOANS AND PROJECT SUMMARY

Borrowers : Republic of Tunisia and Office National de l'Assainissement (ONAS),with the Guarantee of the Republic of Tunisia.

Beneficiaries The Ministry of Agriculture (MoA) and ONAS.

Poverty Category NA

Amounts Republic of Tunisia: FRF 57 million (US$10 million equivalent)ONAS: FRF 283 million (US$50 million equivalent)

Terms Fixed rate single currency, repayable in 15 years, including 3 years ofgrace, with an expected disbursement period of six years.

Commitment Fee : Standard.

Financing Plan : See Schedule A.

Economic Rate of Return : 24 percent using the consumer surplus analysis to estimate benefits

(lower case scenario)

Staff Appraisal Report : 15432-TUN

Mps No.: IBRD 27729 and IBRD 27730

Project Identification : 5731

This document has a restricted distribution and may be used by recipients only in the

performance of their official duties. Its contents may not otherwise be disclosed without

World Bank authorization.

MEMORANDUM AND RECOMMENDATION OF THE PRESIDENTOF THE INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT

TO THE EXECUTIVE DIRECTORSON TWO PROPOSED LOANS, ONE TO THE REPUBLIC OF TUNISLA AND ONE

TO THE OFFICE NATIONAL DE L'ASSAINISSEMENT

FOR A GREATER TuNIs SEWERAGE AND REUSE PROJECT

1. I submit for your approval the following memorandum and recommendation on twoproposed loans, one in the amount of FRF 57 million to the Republic of Tunisia and one in the amountof FRF 283 million to ONAS (with the Government Guarantee), for a total of FRF 340 million to helpfinance a Greater Tunis Sewerage and Reuse Project. The two loans would be at fixed interest ratesingle currency loans for up to 15 years including three years of grace, with an expected disbursementperiod of six years.

2. Background: Tunisia is located at the southern rim of the Mediterranean Sea and hasa population of approximately 8.8 million. It is a highly urbanized country with about 60 percent of itspopulation living in urban areas. Rapidly increasing population in these areas, expanding tourism, andgrowing industry have begun to exert intensive pressure on Tunisia's environment. The Government isaware that in the long run, Tunisia's development will be determined by how well it protects andmanages the environment and its scarce natural resources. One of the highest priorities of its economicplan is to develop and protect the country's scarce water resources. The overall objective of the plan isto promote sustainable economic development by maximizing the efficient use of water resources,reducing pollution, and improving public health. The sewerage sector is one of the keys to attainingthese environmentally sound economic objectives. A fully developed capacity to treat all waste waterwould not only abate urban pollution caused by the uncontrolled discharge of urban and industrialwaste and preserve the quality of water resources, especially coastal waters; it would also contribute towater resource conservation by making it possible to reuse treated water for irrigation.

3. In 1975, with World Bank assistance, the Government of Tunisia created l'OfficeNational d'Assainissement (ONAS), the national institution in charge of sewage sector management,including waste water collection, treatment, and disposal in urban agglomerations and industrial andtourism zones. In 1993, its mandate was consolidated under the newly created (in 1991) Ministry ofEnvironment and Land Planning, with increased responsibility for sewerage operations. ONAS hasalso been expanded into an institution responsible for protecting the hydrological environment, in closecooperation with the National Environmental Protection Agency (ANPE, established in 1989), which isresponsible for overall environmental monitoring and enforcement.

4. Responsibility for the water supply systems in urban areas and large rural centers isassigned to Socit Nationale dExploitation et de Distibution des Eaur (SONEDE), a national watersupply authority, an autonomous public entity under the Ministry of Agriculture (MoA). Planning,design, and supervision of small and medium water supply and irrigation works is the responsibility ofthe Direction du Ginie Rural (DGR), an MoA department. MoA's Direction Gngrale des Etudes etTravaur Hydrauliques is responsible for the construction of hill dams and studies and design ofirrigation infrastructure. Responsibilities for managing investment planning and implementation ofprojects and agriculture activities are with the regional Commissariats Rggionaux au DiveloppementAgricole (CRDA). The municipalities are responsible for solid waste collection and storm drainage.

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5. One of the main objectives of the Government's current water development strategy isto improve the quality of water provided to consumers and to preserve the environment by reducingwater pollution caused by domestic, industrial, and agricultural uses. The World Bank is supportingthe Government's efforts and has outlined its parallel strategy in its Water Policy Paper and the MENAWater Management Strategy. The proposed project will complement Bank involvement in the sector,especially the ongoing Water Supply and Sewerage Project (Loans 3782/3783-TUN), by: (a)enhancing investments for sewerage in Greater Tunis; (b) promoting environmentally sound sewerageoperations, particularly the reuse of treated wastewater; and (c) improving the financial and technicalcapacity of ONAS.

6. Project Objectives: The proposed project will assist the Government and ONAS in:(a) improving service levels for urban sewerage; (b) promoting efficient reuse of effluent from sewagetreatment plants for agricultural purposes; (c) reducing urban and coastal pollution; (d) improvingONAS' cost recovery and financial capacity, with the long-term objective of achieving ONAS' financialautonomy; (e) introducing appropriate new sewage treatment technology; and (f) developing privatesector participation in the sewerage sector.

7. Project Description: The project is part of the Government's Ninth Development Plan,covering the period 1997-2001. It includes two components: (a) urban sewerage, including:(i) expansion and rehabilitation of the Tunis-South (Meliane) Waste Water Treatment Plant (WWTP)in the southern basin of Tunis, with an additional capacity of 375,000 population equivalent;(ii) reorganization, rehabilitation, and strengthening of the Greater Tunis sewer network and (iii)technical assistance for the private sector and studies; and (b) reuse of treated sewage in agriculture:(i) the equipment for a perimeter to be irrigated with treated waste water, (ii) construction of a multi-seasonal storage basin, and (iii) a pilot project for waste water recycling, technical assistance andstudies.

8. Project Financing and Implementation: Two Bank loans will be made available,one to the Republic of Tunisia in the amount of FRF57 million (US$10 million equivalent) and one toONAS in the amount of FRF283 million (US$50 million equivalent); with the Government guarantee,for a total of US$60 million equivalent. ONAS will finance US$21 million equivalent. The Governmentcontribution will be US$26 million equivalent. The Bank loans will cover most of the estimated directand indirect foreign exchange cost of the project and local costs of consultant services. ONAS willimplement the sewerage component while MoA will be responsible for executing the agricultural reusescheme. ONAS and MoA have substantial experience implementing similar projects and are quitecapable of implementing the proposed project. Furthermore, they will be assisted by consultants andfrequent Bank supervision missions.

9. Project Preparation: Consultants have prepared the feasibility study, theenvironmental assessment of the sector and the site-specific subprojects, and the economic andfinancial studies. These studies, financed under the Japanese PHRD Fund (113 million yen) andmanaged by the Bank, were completed at the end of 1995.

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10. Lessons Learned from Previous Bank Operations: The Second and ThirdSewerage Projects in Tunisia were successfully completed in 1988 and 1993, respectively. Theseprojects involved the construction of sewerage collection systems, treatment plants, and relatedinfrastructure, as well as soft components to further develop ONAS' managerial, technical, andfinancial capabilities. The projects also contributed to controlling pollution in the northern area of LakeTunis. The experience highlighted the need for economic and comprehensive cost recovery studies andfor a realistic assessment of sewerage charges, to avoid financial constraints that could limit the utilitysability to cope with the increasing demand for its services. Although inadequate revenues were raisedthrough tariffs in the Second Sewerage Project, ONAS subsequently negotiated a yearly 15 percenttariff increase for the duration of its Contrat Programme (1992-96), which has already significantlyimproved its financial performance. Both sewerage projects were successfully implemented, whichenabled ONAS to establish strong institutional arrangements and to significantly expand sewerageservices in the country. The Bank's Operations Evaluation Department (OED) considers the WaterSupply and Waste Disposal Program in Tunisia (Report 4146, October 1992) to be one of the Bank'smost successful programs, and the situation remains excellent to date. A recent MENA utilities reviewalso considered SONEDE and ONAS to be the best performing utilities in the region.

11. Rationale for Bank Involvement: The Government is keenly aware that Tunisiafaces a severe water shortage within the next decade, and has committed itself to implementing a long-term strategy to satisfy the country's water needs until the year 2011. Promoting the reuse of effluentfrom sewage treatment plants for agricultural purposes is an integral part of the Government's strategy,which has been devised within a comprehensive policy and institutional framework that is in line withthe Bank's Water Policy Paper, the MENA Water Strategy, and the Country Assistance Strategypresented to the Board on June 25, 1996. The Bank's assistance strategy for Tunisia is to support theGovernment's efforts to strengthen the management and conservation of its water resources; theproposed project is the result of a continuing dialogue between the Government and the Bank.Although commendable progress has been made in improving the level of water supply and sewerageservices in urban areas, more remains to be done to strengthen the management and conservation ofthe fragile natural resource base and the environment, to promote the reuse of treated waste water, tomobilize resources, to implement adequate cost recovery schemes, to improve efficiency, and toencourage private sector participation in the sewerage sector. The Bank's past involvement wasinstrumental in the creation of ONAS and in reforms in the sewerage sector that led to more efficientmanagement and better cost recovery. However, the agency's capacity to plan and implementprograms, use resources efficiently, and cooperate with other ministerial departments still needs to beimproved,

12. Issues and Agreed Actions: Major project issues and actions are described below.(a) Reuse of treated waste water: One of the fundamental objectives of the project is to make possiblethe reuse of treated waste water in agriculture. The Tunis West WWTP is designed to achieve thisobjective. The Bank has reached an agreement with the ministries concerned (Agriculture andEnvironment) to implement a specific reuse program for irrigation and recharge of aquifers to becarried out as part of this project. Cost estimates for the component to be implemented in the projecthave been based on preliminary studies. Government will prepare the related feasibility study andenvironmental impact assessment not later than December 31. 1998 and detailed designs acceptable tothe Bank. not later than December 31. 1999. (b) Tariffs and long-term financial viability of ONAS:

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ONAS' financial performance and tariffs were thoroughly discussed in the supporting documents forthe Water Supply and Sewerage Project (Loans 3782/3783-TUN), which became effective end ofJanuary 1995. The main objective in this area is to ensure that ONAS' overall tariffs are sufficient toallow full coverage of its operating and maintenance costs, including depreciation, as well as areasonable self-generated contribution to capital investments. Agreement has been reached with theGovernment, on: (i) annual tariff increases of 8 percent per annum (4.5 percent in real terms) until theproject funds are fully disbursed (ii) self-generated contribution to capital investments of at least 30percent: (iii) restructuring of the progressive block tariff scheme to eliminate the regressive tariff in thefirst tranches and ensure that intramarginal rates better reflect marginal costs of providing the service toeach category not later than December 31, 2002: and (iv) implementation of a reliable cost accountingsystem by December 31, 2000, which provides details of costs related to major activities of ONASsuch as storm drainage and processing sewerage from industry and tourism. (c) Effective treatment ofindustrial wastewater: Legislation prohibits discharge of any waste water into the sewerage system in amanner that does not conform with Tunisian norms, and every industry is given specific instructions forhooking up to sewerage networks. Some industries are required to pretreat their waste. However,technical and financial constraints make it difficult to enforce this legislation fully. The ANPE, which isresponsible for enforcing all environmental laws, has taken measures to improve the situation, includingcreating a depollution fund (FODEP) to help polluting industries finance pretreatment systems. ANPEhas also undertaken several studies to address the issue. The Bank has not been asked to participate inANPE's programs; other donors are assisting in this regard. However, the Bank is closely following allwork being done on industrial waste water. (d) Role of the private sector: Although it is Governmentpolicy to encourage the private sector to participate in waste water treatment, Tunisia is approachingthis issue gradually, with studies and pilot projects. Three private sector initiatives have been launchedwith USAID assistance. The first two are pilot operations in which management of the waste waternetwork in Tunis and three WWTPs in the touristic area of Hammamet are subcontracted to privatefirms. The third initiative is for the private sector to build and operate a WWTP during the 1997-2001Ninth Development Plan. The Government decided to build the Tunis West WWTP on a BOT basis,with the private operator responsible for operations and maintenance as well as for financing capitalexpenditure. Technical assistance is provided in the project to help finance the preparation of BOTtender documents and negotiations with potential bidders.

13. Environmental Aspects: The project is expected to help improve the environment by:(a) increasing waste water collection and treatment capacity in rapidly growing urban areas of GreaterTunis and using environmentally safe and optimized schemes of treatment, disposal, and water reuse;(b) reducing pollution discharge from polluting industries through industrial pretreatment; and (c)strengthening the national environmental monitoring capability, to effectively preserve water quality.According to the Bank O.D. 4.01 and Tunisian regulations on environmental impact assessments, theproject is classified Category A. Potential negative impacts of the project have been studied,environmental mitigation plans have been prepared to address these potential negative impacts, andadequate basin or reservoir safety measures will be in place before the construction of the facilities forthe reuse component. The project will not cause any resettlement of the local population.

14. Benefits: The project will directly benefit the urban population by creating a cleaner,more pleasant environment. The project will improve health conditions for about 150,000 people inthe low-income areas of Greater Tunis who are currently not served by the sewerage system.

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Moreover, it will provide the main infrastructure to meet the demand level projected for 2011. Thereduction in urban and coastal pollution will facilitate conservation of the region's natural resources anddevelopment of the tourism industry. The project will be the first integrated scheme in the country. Aperimeter of about 1,000 ha will be irrigated from the treated waste water. The project is alsoexpected to generate long-run institutional benefits in terms of cost recovery, tariff policies, andoperational efficiency.

15. Risks: The principal risks include the Government's ability to enforce operational andfinancial discipline on ONAS and its willingness to periodically adjust tariffs to maintain and implementONAS' investment program. The risk is mitigated by the Government's having raised tariffssignificantly during 1991-1996, which indicates its commitment to ensuring the eventual financialviability of ONAS, and ensuring that the sector has the resources to achieve its objectives. A set ofappropriately selected covenants will help to further mitigate project risk. A secondary risk is the lackof institutional capacity to integrate waste water treatment into the water cycle. The follow-up to therecent sector study recommendations and the proposed irrigation scheme will facilitate suchintegration.

16. Recommendation: I am satisfied that the two proposed loans would comply withthe Articles of Agreement of the Bank and recommend that the Executive Directors approvethem.

James D. WolfensohnPresident

By Caio Koch-WeserAttachmentsWashington, D.C.May 6, 1997

Schedule APage 1 of2

REPUBLIC OF TUNISIA

GREATER TUNIS SEWERAGE AND REUSE PROJECT

Summary Project Cost Estimates and Financing Plan

Project Cost Estimates (December 1996)(US$ million equivalent)

US$1 = TD 1.0676

US$ million of which - DT million of whichCustoms

andDescription Local Foreign Total Taxes Local Foreign Total Taxes

SewerageSewage Treatment Plant South Tunis 5.553 12.798 18.351 1.502 5.928 13.663 19.591 1.604SewerSystem Reorganization 6.375 7.782 14.517 i.034 6.806 8.308 15.114 1.104

Extensions 8.861 10.200 19.061 1,910 9.460 10/890 20.349 2.039Rehabilitation 3.068 3.382 6.450 937 3.276 3.610 6.886 1.001

Pumping Stations 1.638 3.369 5.008 456 1.749 3.597 5.346 487Rehabilitation STP North Tunis + Transfer 1.422 1.669 3.091 242 1.518 1.782 3.300 258Subtotal 26.917 39.201 66.118 t 082 28.736 41.850 70.586 6.493Consultant Services and TA 1.700 1.700 3.400 309 1.815 1.815 3.630 330Maintenance Equipment 515 2.061 2.576 146 550 2.200 2.750 156Subtotal ONAS 29.132 42.962 72.094 6.537 31.101 45.865 76.966 6.979Reuse of Treated Sewage tn Agrculture 7.213 7.213 14.425 1.849 7.700 7.700 15.400 1.974

TotalProjectCost 36.345 50.174 86.519 8.386 38.801 53.565 92.366 8.953

PhysicalContingencies 5.452 7.526 12.978 1 252 5.820 8.035 13.855 1.343Price Contingencies 4.335 2.905 7.240 731 7.144 6.366 13.510 1.340Total Project Cost (current prces) 46.131 60.605 106.737 10370 51.766 67.966 119.731 11.636

Schedule APage 2 of 2

REPUBLIC OF TUNISIA

GREATER TUNIS SEWERAGE AND REUSE PROJECT

Summary Project Cost Estimates and Financing Plan

Financing Plan

------- Millions ------- % of Project Lending TermsTD US$ Cost

equivalent

IBRD 67.0 60,0 56.1 FRF, fixed interest rate,up to 15 years, includingthree years of grace, withan expected disbursementperiod of six years

Government 29.0 26.0 24.3 Government budget

ONAS 24 21.0 19.6 Own contribution

TOTAL 12DQ0 11. 10QU

Schedule BPage 1 of3

REPUBLIC OF TUNISIA

GREATER TUNIS SEWERAGE AND REUSE PROJECT

Amounts and Methods of Procurement(US$ million equivalent, including taxes)

Project element ICB NCB Other Total

1 Supply and install 25.20 25.20(20.16) (20.16)

2 Civil works 29.90 29.90 59.80(16.06) (8.65) (24.71)

3 Goods 4.96 11.58 16.54(2.98) (6.95) (9.93)

4 Consultant services 5.21 5.21(5.21) (5.21)

Total 60.06 41.48 5.21 106.75(39.20) (15.59) (5.21) ( 60.00)

Note: Figures in parentheses are the amounts financed by the Bank loan.

Schedule BPage 2 of 3

REPUBLIC OF TUNISIA

GREATER TUNIS SEWERAGE AND REUSE PROJECT

Bank Loan Disbursement Categories

Categoy Amount of loans in % of expenditure to be financedFrench Francs

(and US$ millionequivalent)

Part A: Sewerage

1. Works 136,000,000 100 percent of foreign expenditures and(24.0) 60 percent of local expenditures

2. Goods, including equipment 102,000,000 100 percent of foreign expendituresand its installation (18.0) tOO percent of local expenditures (ex-

factory cost), and80 percent of local expenditures for itemsprocured locally

3. Consultant services and 17,000,000 100 percent of total expenditurestraining (3.0)

Unallocated 28,000,000(5.0)

Subtotal ONAS 283,000,000(50.0)

Part B: A2riculture

1. Civil works and pipeline 23,000,000 100 percent of foreign expenditures andconstruction (4.0) 60 percent of local expenditures

2. Supply of pipes, building 23,000,000 100 percent of foreign expendituresmaterials, and electro- (4.0) 100 percent of local expenditures (ex-mechanical equipment factory cost), and

80 percent of local expenditures for itemsprocured locally

3. Studies, TA, and training 6,000,000 100 percent of total expenditures(1.0)

Unallocated 5,000,000(10)

Subtotal MoA 57,000,000(10.0)

TOTAL 340,000,000(60-)

Schedule BPage 3 of 3

REPUBLIC OF TUNISIA

GREATER TUNIS SEWERAGE AND REUSE PROJECT

Estimated Disbursements(US$ million equivalent)

BankFY 1999 2000 2001 2002 2003 2004

Annual 8.0 8.1 9.3 11.8 11.9 10.9Cumulative 8.0 16.1 25.4 37.2 49.1 60.0

Schedule CPage 1 of 2

REPUBLIC OF TUNISIA

GREATER TUNIS SEWERAGE AND REUSE PROJECT

Timetable of Key Project Processing

Timetable of Events:

Time taken to prepare the project 39 months

Prepared by Ministry of Environment, Ministry of Agriculture,ONAS, consultants, and Bank assistance

Identification September 1993

Appraisal December 1996

Negotiations April21, 1997

Planned Board date May 29, 1997

Planned effectiveness date January 1998

,Schedule CPage 2 of 2

REPUBLIC OF TUNISIA

GREATER TUNIS SEWERAGE AND REUSE PROJECT

List of Relevant ICRs

Loan No. Proje ICR ICR/PPAR No.

2255 Urban Sewerage III November 1993 13419

2368 Rural Water Supply VII March 1994 13418

MOP Schedule Dc4 enerated: May 5, 1997

w o Status of Bank Group Operations in TunisiaIBRD Loans and IDA Credits in the Operations Portfolio

U 03

DifferenceOriginal Amount in US$ Millions Between actualLoan or Fiscal

and expectedProject ID Credit No. Year Borrower Purpose IBRD IDA Cancellations Undisbursed Disbursements a/

Number of Closed Loans/credits: 100

TN-PE-5727 L32170 1990 GOVERNMENT RESEARCH & EXTENSION 17.00 0.00 0.00 3.05 3.05TN-PE-5738 L33080 1991 GOV. OF TUNISIA HOSPITAL MGT. & FIN. 30.00 0.00 0.00 16.34 16.14TN-PE-5717 L33070 1991 GOV. OF TUNISIA A POPULATION 4 FAMILY 26.00 0.00 0.00 5.14 5.14TN-PE-5726 L34560 1992 GOVT. OF TUNISIA HIGHER EDUCATION 75.00 0.00 0.00 52.27 41.42TN-PE-5735 L34180 1992 STEG GAS INFRASTRUCTURE D 60.00 0.00 0.00 1.99 1.99TN-PE-5725 L36010 1993 GOVERNMENT SECOND FORESTRY DEVE 69.00 0.00 0.00 59.03 5.23TN-PE-5687 L35070 1993 GOVT. OF TUNISIA MUNICIPAL SECTOR INV 75.00 0.00 0.00 .48 -31.77TN-PE-5733 L36910 1994 GOVT. DEV.OF MTS NW REGION 27.50 0.00 0.00 18.36 .94TN-PE-5748 L36790 1994 BANKS OF TUNISIA PRIVATE INVESTMENT 7.00 0.00 0.00 .45 -6.55TN-PE-5748 L36780 1994 BANKS OF TUNISIA PRIVATE INVESTMENT 6.00 0.00 0.00 1.15 -4.85TN-PE-5748 L36770 1994 BANKS OF TUNISIA PRIVATE INVESTMENT 10.00 0.00 0.00 .04 -9.96TN-PE-5748 L36740 1994 BANKS OF TUNISIA PRIVATE INVESTMENT 8.00 0.00 0.00 3.01 -4.99TN-PE-5748 L36730 1994 BANKS OF TUNISIA PRIVATE INVESTMENT 12.00 0.00 0.00 9.00 -3.00TN-PE-5748 L36710 1994 BANKS OF TUNISIA PRIVATE INVESTMENT 50.00 0.00 0.00 21.77 -1.08TN-PL-5721 L36610 1994 GOVERNMENT AGRICULTURAL SEC INV 120.00 0.00 0.00 64.54 27.04TN-PE-5720 L38920 1995 BNA RURAL FINANCE 65.00 0.00 0.00 45.42 10.42TN-PE-5749 L38400 1995 GOV'T OF TUNISIA RURAL ROADS 51.50 0.00 0.00 33.88 -8.91TN-PE-5743 L37860 1995 GOV. OF TUNISIA SECONDARY EDUCATION 98.30 0.00 0.00 75.79 10.09TN-PE-5680 L37830 1995 GOVERNMENT/SONEDE WATER SUPPLY AND SEW 29.00 0.00 0.00 23.20 -5.80Tf-PC-5680 L37820 1995 GOVERNMENT/SONEDE WATER SUPPLY AND SEW 29.00 0.00 0.00 19.40 .37TN-PE-40208 L40370 1996 GOT IND. SUPPORT INSTITU 38.70 0.00 0.00 35.33 1.45TN-PE-5745 L40360 1996 GOVT. OF TUNISIA 2ND EMPL. & TRG. 60.00 0.00 0.00 59.40 .90TN-PE-42287 L40691 1997 GOT ECAL I 37.50 0.00 0.00 34.25 0.00Total 1,001.50 0.00 0.00 583.30

Active Loans Closed Loans TotalTotal Disbursed (IBRD and IDA): 411.59 2,661.18 3,072.77of which has been repaid: 5.17 1,465.20 1,470.37

Total now held by IBRD and IDA: 996.32 1,199.83 2,196.15Amount sold 0.00 39.56 39.56

Of which repaid : 0.00 39.56 39.56Total Undisbursed : 583.30 3.86 587.16

a. Intended disbursements to date minus actual disbursements to date as projected at appraisal.b. Rating of 1-4: see OD 13.05. Annex D2. Preparation of Implementation Summary (Form 590). Following the FY94 Annual Review of Portfolio performance (ARPP),a letter based system will be used (HS - highly Satisfactory, S - satisfactory, U = unsatisfactory, HU - highly unsatisfactory): see proposed Improvementsin Project and Portfolio Performance Rating Methodology (SecM94-901), August 23, 1994.c. Following the FY94 ARPP, *Implementation Progress" will be reported here.

Generated by the Operations hIfornation System (OIS) Page I

MOP Schedule DGenerated: May 5, 1997

Page 2 of 2Tunisia

STATEMENTOF IFC'sCommitted and Disbursed Portfolio

As of 3 1-Mar-97In Millions US Dollars

Committed Disbursed-- IFC- - -- IFC_-

FY Company Loan Equity Quasi Partic Loan Equity Quasi ParticApproval

1973 Sousse-Nord 0.00 .04 0.00 0.00 0.00 .04 0.00 0.00

1975 Sousse-Nord 0.00 .59 0.00 0.00 0.00 .59 0.00 0.00

1986 Adwya .15 0.00 0.00 0.00 .15 0.00 0.00 0.00

1986 SITEX 0.00 2.15 0.00 0.00 0.00 2.15 0.00 0.00

1991 Adwya 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

1991 SOMOTEX 3.01 0.00 0.00 0.00 3.01 0.00 0.00 0.00

1992 Miniere Bougrine 0.00 2.23 0.00 0.00 0.00 2.23 0.00 0.00

1992 SITEX 2.19 0.00 0.00 0.00 2.19 0.00 0.00 0.00

1993 Ideal Sanitaire 0.00 1.02 0.00 0.00 0.00 1.02 0.00 0.00

1994 Miniere Bougrine 0.00 -. 05 0.00 0.00 0.00 -.05 0.00 0.00

1995 Maghreb IM Bank 0.00 .33 0.00 0.00 0.00 .33 0.00 0.00

Pending Commitments1997 * AMINEX: TUNISIA 0.00 3.05 0.00 0.00

1995 * TUNINVEST INT'L 0.00 6.25 0.00 0.00

1995 * TUNINVST GESTION 0.00 .07 0.00 0.00

Generated by the Operations Information System (01S) Page 1

Schedule EPage 1 of 2

Tunisia at a glanceM. East Lower-

POVERTY and SOCIAL & North middle-Tunisia Africa Income Development diamond*

Population mid-1995 (millions) 9.0 273 1.154 Life expectancyGNP per capita 1995 (USS) 1,860 1,780 1.700GNP 1995 (billions USS) 16.7 486 1.961 T

Average annual growth, 1990-96

Population (%) 1.8 2.7 1.4 G Grosstabor force ().. 3.0 3.3 1.8 .IGNGrs

. per -- - primaryMost recent estimate (latest yearavaelable since 1989) capita enrollment

Poverty-. headcount index (% ofpoputabon) 7 .. .Urban population (% oftal population. 61 56 56Ufe expectancy at birth {years; 68 66 67infant mortality (per 1,000 11e births) 32 49 36Child malnutrition (% oirchAdren under 5) 8 . .. Access to safe waterAccOss to safe water (% ofpopulation) 69: 82 78lliteracy (% or population age 15+) 32 39Gross primary enrollment (% ofschool-age populaton) 120 97 104 - Tunisia

Male 125 104 105 -Lower-middle-income groupFemale 115 90 101

KEY ECONOMIC RATIOS and LONG-TERM TRENDS

1975 1986 1994 1996 Economic ratios

GOP (billions USSJ 4.3 8.3 15.7 17.6Gross domestic investmentiGCP 28.0 26.5 24.9 24.7 Openness of economyExports of goods and non-factor servicesGOP 31.0 32.5. 44.7 44 8Gross domes trcsarngsiGDP 232 0 4 21 9 21.1Gross national savingsGDP 235 194 21.6 20.4

Current account bainceiGDP -4 9 .7 1 -3 2 -42 Savings Investmentinterest paymenisiGDP 03 30 2 9Tcaaia ebuGDP 256 590 58 7 54:2Towa debt serv-ceiekoorts 70 24 7 14 5 18.0Present vaiue of deot-GOP 499Present vaiue or derLeAoons . . 101 8 . Indebtedness

1975-84 1985-95 1994 1996 1996-04(arerage annuai grown; -Tunesd

GNP per cap39a - 3 1 5 16 1 - -Lolser-m.dle-ncome group

Exports of goods and nts 52 7.1 130 1 2 7 0

STRUCTURE of the ECONOMY

(% of GDP) 1975 1985 1994 1995 Growth rates of output and investment (%)

Agriculture 21.0 17.3 14.4 13.1Industry 29.4 34.1 33.4 33.3 30

Manufacturing 10.3 13.5 21.0 21.6Services 49.7 48.6 52.1 53.8

Private consumption 62.2 62.1 62.0 63.1 s so 91 02 93 asGeneral government consumption 14.6 17.0 16.5 16.9Imports of goods and non-factor services 32.9 38.7 47.9 48.7 -Got GOP

(average annual gmwth) 197544 1985-96 1994 1996 Growth rates of exports and imports (%)

Agriculture 1.1 3.2 -10 0 -9.9Industry 7.0 4.3 3.3 5.3

Manufacturing 9.7 7.5 3.4 8.8Services 5.8 3.8 5.4 5.2

Private consumption 6.7 3.2 3.1 3.0 90s9 93 a4 asGeneral government consumption 6.5 3.3 4.2 3.0 5Gross domestic investment 5.4 5.2 -11.5 4 4 .10Imports of goods and non-factor services 8.0 6.1 3 5 3.3Gross national product 5.2 4.1 3.5 3.0 - Ipots

Note: 1995 data are preliminary estimates.The diamonds show four key indicators in the country (in bold) compared with its income-group average. If data are missing, the diamond willbe incomplete.

Schedule EPage 2 of 2

Tunisia

PRICES and GOVERNMENT FINANCE1975 1985 1994 1995 Inflation (%)

Domestic prices(% change)Consumer prices 9.5 7.3 4.6 6.3Implicit GDP deflator 5.0 4 9 4.4 5.3

Government finance(% of GDP)Current revenue 30 3 27.6 26.3 o so o -2 aCurrent budget balance .. 6.6 2.8 1.9Overall surplus/deficit .. -4.0 -2.7 -4.2 -GDPdef. CPI

TRADE

(millions US$) 1975 1986 1994 1995 Export and Import levels (mill. US$)

Total exports (fob) 859.1 1,729.2 4.643.0 5,469.6 8o000

Fuel 374.3 723.: 436.6 462.0Other agriculture 37.5 96.E 274.9 243.4 S00Manufactures 331.8 876.! 3,887.0 4,700.8 s.oo

Total imports (cif) 1,423.9 2,740.5 6,564.5 7,718.3 4,00oFood 225.0 333.- 536.0 814.7 3000Fuel and energy 140.0 369.- 465.6 496.4 2.000Capitalgoods 429.6 603 1,432.6 1,515.9 tooo

Export price index (1987=100) .. 9 127 143 8 9 I s2 ga a aImport price index (1987=100) .. 8. 124 137Terms of trade (1987=100) .. 11. 103 104 Expofts Mtimports

BALANCE of PAYMENTS1975 198: 1994 1995

(millions US$) Current account balance to GOP ratio (%)Exports of goods and non-factor services 1,344 2,700 6,887 7,954 ; IImports of goods and non-factor services 1,425 3,207 7,209 8.561 o9 0 ? t 2 9 04 26

Resource balance -81 -507 -322 -607

Net factor income -136 -362 -1,020 -976Net current transfers 135 270 688 753

Current account balance. .4before official transfers -82 -589 -654 -830

Financing items (net) 195 476 1,009 849Changes in net reserves 17 113 -355 -19 -

Memo:Reserves including gold (mill. USS) 398 294 1,544 1,689 .- £Conversion rate (local/US$) 0.402 0.835 1.010 0.95

EXTERNAL DEBT and RESOURCE FLOWS

1975 1985 1994 1995(millions US$) Composition of total debt. 1995 (mill. USS)Total debt outstanding and disbursed 1,109 4,884 9,407 10.194 A

IBRO 110 558 1,715 1,717 36 1717IDA 55 65 52 49

Total debt service 103 746 1,455 1,561RD 15 88 297 332 0

(DA 1 1 3 2

Composition of net resource nowsOfficial grants 49 30 83 71Official creditors 104 210 272 98Private creditors 20 109 -117 486 1808Foreign direct investment 45 108 194 295Portfolio equity 0 0 0 0

World Bank program ECommitments 37 169 304 117 A-IRD 3509 E- BilateralDisbursements 40 109 189 138 B - 1oA 0 - Other muidlateral F - PrivatePrincipal repayments 7 48 175 205 C - IMF G- Short-termNetflows 32 61 13 -67Interest payments 8 41 124 129Net transfers 24 20 -111 -196

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- ；一 ：

IMAGING

Report No.: P 7058 TUN

Type: MOP