11 July 2002 – The European Investment Bank (EIB) – the European Union’s financing institution – is making available a loan of €150m to finance the priority component of the programme for upgrading Tunisia’s electricity transmission network and improving its management over the next two years.

The funds are being lent to the Société Tunisienne de l’Électricité et du Gaz (STEG) for capital expenditure on more than 70 sub-projects spread across Tunisia, with careful attention to environmental protection. The main elements of the project being financed are: high-voltage overhead lines and underground cables; conventional and metal-clad high-voltage substations; power transformers; and a telecommunications system for network control and transmission.

This EIB loan is the first under STEG’s 10th Five-Year National Development Plan (2002-2006), which was officially unveiled on 2 July. It follows three earlier loans to STEG totalling €105m, signed during the period 1995-2000. STEG, which this year celebrates the 40th anniversary of its establishment in 1962, is responsible for the production, transmission and distribution of electricity and gas in Tunisia.

The various project components, construction of which is to be spread over the period 2002-2004, will help meet Tunisia’s growing electricity demand while considerably improving reliability for users and reducing system losses. Tunisia’s power grid is plugged into the North African electricity transmission network spanning Morocco, Algeria and Tunisia. This in turn is linked to the European Union via a power interconnection with Spain, for which the EIB provided a loan of €80m.

Since 1978, the EIB has lent more than €1.5bn in Tunisia, mainly for infrastructural, environmental and industrial-development schemes, either by way of direct financing or through global loans granted to Tunisia’s banking sector in support of SME investment.