Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Copy Public Disclosure Copy I. Concept ReviewDecision Estimated DateofBoardApproval Estimated DateofAppraisalCompletion Date PIDPrepared Environmental Category Implementing Agency Borrower(s) Project ID Lending Instrument Sector(s) Country Region Project Name Introduction andContext social progress ofthecountry. are markedand alargepartofthepopulation experiencesasenseofmissed opportunityandexclusion fromtheeconomicand stability coupledwithagradual openingtotradeandforeigninvestment.However,unemployment remainshigh,regionaldisparities positive inthepastyears,including in2009and2010theaftermathofglobalfinancial crisis,thankstomacroeconomic persisted inaddressingeconomic, socialandregionalinequalities.‘smacroeconomic performancehasbeenconsistently the misgovernancethatfavored insiders.The2011protestshighlightedhow,despitegood economicgrowth,manychallenges 2011. The“JasmineRevolution” wasfueledbyalackofsocial,economicandpoliticalopportunities, andexacerbatedbyangerover 5. Country Context resource use(namelytheMediterraneanSolarPlan,, MedgridandtheWorldBank’sArabInitiative). the MediterraneanBasin,whilecreatingconditionsfora regionalmarketlinkingtheNorthandSouthofBasintooptimize 4. necessary tomaketheCSPprojectshappen. and becomearegularsustainedsourceofrevenuesfor renewableenergyplantsinMENA,concessionalfinancingis infrastructure isstilllimited.However,EUimportsofgreen electricity fromMENAarelikelyinthelongterm.Untilexportstakeoff framework isnotyetinplacetoprovidecertaintyandprofitability togreenelectricityexportsfromMENA,andtheinterconnection revenues forMENAcountrieswhichwillpaythedevelopment ofanexpensivecarbon-freetechnology.TheEUregulatory Mediterranean: helpingtheEUcountriesmeetingtheirrenewableenergyobjectivesatlowercost,whilecreatingasource of 3. revenues objectives,aswellthegoalofenhancingintegrationacrossMediterranean. (CTF)—to financeCSPacrosstheregion.TheInvestmentPlanhasemployment,climatechange,energysecurityand export MENA. TheMENACSPInvestmentPlanisaUSD5.6billionprogram—including750millionfromtheCleanTechnology Fund 2. manufacturing sectorcouldbebuiltandcreatejobs. proximity topremiumgreenenergymarketsinEurope.Itisalsohomesignificantindustrialcapabilitiesonwhicha components forCSPpowerplants.Theregionhasamajorcomparativeadvantagebecauseofitsclimaticconditions and region hasthepotentialtobecomeamajorsupplierandconsumerofCSPgeneratedelectricity,aswellworldscale supplierof manufacturing scaleeffects,learningcurveeffectsandimprovementsintechnology.TheMiddleEastNorthAfrica (MENA) predictable thanformostrenewableenergyoptions.Italsoofferssubstantialcost-reductionpotential,whichwillbedependent upon 1. Global Context 1. Country Context In December2010,Tunisiaexperienced awaveofproteststhatledtothetoppling previousregimeonJanuary14, The MENACSPInvestmentPlanhasstrongsynergywithother initiativesthatseektodeveloptherenewablepotentialof Exports willbeessentialtotheviabilityofMENACSPprojects.Theyhavebenefitsforbothshores The WorldBankisworkingwiththeAfricanDevelopment(AfDB)andotherdonorstoaccelerateCSPdeployment in Concentrated SolarPower(CSP)isanon-carbontechnologyofparticularinteresttoutilitiesasproductionmore Introduction andContext 21-May-2012 Track I-Thereviewdidauthorizethepreparationtocontinue 30-Oct-2012 14-Feb-2012 A-Full Assessment Societe Tunisiennedel'ElectriciteduGaz(STEG) Societe Tunisiennedel'ElectriciteetduGaz P122029 Specific InvestmentLoan Other RenewableEnergy(100%) Tunisia MIDDLE EASTANDNORTHAFRICA TN-STEG ConcentratedSolarPower(P122029) PROJECT INFORMATIONDOCUMENT(PID) CONCEPT STAGE Report No.:PIDC240 Public Disclosure Copy Public Disclosure Copy III. II. Proposed DevelopmentObjective(s) pollution (tonsofNOx,SOxannually),andavoidedGHGemissions (tonsofCO2annually). 18. Key Results to increasepowergenerationfromsolarenergyandmitigate greenhousegasemissionsandlocalenvironmentimpact. 17. Proposed DevelopmentObjective(s) maintaining CSP plants. and configuration thatwillminimizetechnical risks,whileallowingSTEGto gainsignificantexpertisein developing,operatingand Plan. Itwillbeapublicsector projecttobeimplementedbySTEG.Theapproachbeing adopted bythecompanyistogowithasize 15. Concept Description Preliminary Description green skillsandjobs,inconstructingoperatingtheplant, aswellinmanufacturingsomeofitscomponents. project willalsocontributetothemuchneededimprovementofemployabilityandemploymentincountry,through creationof Bank willcontinuetoconsultwiththeclientensurethatprioritiesnewauthoritiessetoutarereflectedin theISN..The inclusive economicgrowth,whilealsoremainingcommittedtotheenvironmentalchallengesthatcountryisfacing. TheWorld and (iii)layingthefoundationsforsustainedeconomicgrowth.Thesepriorityareasaredesignedtofosterjobcreation andall FY12.-. TheISNenvisagesthreeareasofengagement:(i)governanceandcitizenparticipation,(ii)economicsocial inclusion 12. Relationship toCAS acquisition of3,000units1kWpeach. ,STEGhasdevelopedseveralwindfarms.Aphotovoltaicprogramwaslaunchedin2009,involving the combined cyclegasturbineplant,wascommissionedin2002andnowgeneratesover20%ofthecountry’selectricity. Regarding a 1996lawreformingtheelectricitysector,Tunisia'sfirstindependentpowerproducer(IPP),CarthagePowerCompany, a470MW Tunisia's power.ThecapacityofSTEG’sgenerationfleetamountsto3GW,almostallwhichbeingprimarilygasfired. Following 11. components inMENAconfirmedthatsuchpotentialexistsmostcountriesoftheregion,includingTunisia. economic growthandjobcreation.The2011studyinitiatedbytheWorldBankonlocalmanufacturingpotentialfor CSP 10. planned Tunisia-Italyinterconnector. 50-100 MWprivateprojectandtwocomponentsoftheELMEDproject,i.e.a100CSPcapacityparticipation inthe the MENACSPInvestmentPlan,forwhichUS$181millionfromCTFareearmarked:present50MWSTEGproject, a for atotalinvestmentamountofEUR2billion,70%whichtobeprovidedbytheprivatesector.Tunisiaproposedfour projectsin RE andEE:40projects,whichwillalsobepartoftheMediterraneanSolarPlan,havebeenidentifiedinsolar,wind,biomass, etc., 9. (EE) andrenewableenergy(RE). broad directionofenergypolicy,includinggradualreductioninsubsidiesandscalingupinvestmentsefficiency 8. Sectoral andInstitutionalContext Sectoral andInstitutionalContext energy efficiencyand20%throughrenewableenergy. million tonnesofoilequivalent(toe)fossilfuelsovertheperiod2005-2030from“business-as-usual”scenario,80%through been launchedforclimatechangemitigation,includingtheTunisianSolarPlan.Basedonthisplan,Tunisiaexpectstosave10 7. which wouldpavethewayforfurtherinitiatives,bothfrompublicandprivatesectors. energy. Thecurrent50MWCSPprojectwouldbeafirstindustrialscaledemonstratorforsolarbasedpowergenerationinTunisia, increasingly onimports.Thecountryisconsideringvariousoptionsforthefuturepowerplants,includingcoal,nuclearandsolar the countryvulnerabletodisruptionininternationaloilandgasmarketspricevolatility,especiallyasTunisiahasrely gas, anditselectricityproductionongasonly.Thisisasourceofconcern,asthehighleveldependencyhydrocarbonsmakes deficit, andTunisiahasbeenanetimporterfrom2001on.Thecountry’sprimaryenergydemandisnearlyentirelybasedonoil 6. The keyresultsindicatorsareCSPcapacityinstalled(inMW), annualCSPpowergeneration(inGWh),avoidedlocalair The developmentobjectiveoftheproposedprojectistosupport STEGinthedevelopmentofa50MWCSPpowerplant, The projectwillsupporttheconstruction andinitialoperationofaproposed50MWCSP plantaspartoftheTunisianSolar The WorldBank’sprograminTunisiasetouttheInterimStrategyNoteFY12-13,withanexpectedboarddateofend The verticallyintegratedpublicutilitySociétéTunisiennedel’ÉlectricitéetduGaz(STEG)generatesapproximately75% of Another centralfeatureofTunisia’srenewablestrategyisthedevelopmentalocalequipmentindustrytocontribute to The TunisianSolarPlanwaslaunchedinDecember2009fortheperiod2010-2016andaimsatincreasingshareof Rational useofenergyhasbeenapriorityinTunisiaforlongtime.The11thDevelopmentPlan(2007-2011)setsthe Beyond energy,climatechangehasemergedasamajorchallengeforallsectorsinTunisia,andseveralprogramshave Until thelate1980s,Tunisiawascharacterizedbyanenergysurplus.Sinceearly1990s,thissurplushasturnedintoa Public Disclosure Copy Public Disclosure Copy IV. VI. V. Safeguard Policiesthatmightapply Name: Borrower/Client/Recipient Email: Tel: Title: Contact: World Bank Contact point Tentative financing g. f. e. d. c. b. early 2012) a. 19. 70,000-75,000 tonsperyear,basedonexpectedgenerationof130-140GWhyear). other institutions(EIB,AFD,IsDB,etc.).STEGwillalsobeseekingtocollectrevenuesfromCO2emissionreductions(about leadership ofKfW.Thisdonorisalsointerestedinfinancingtheproject,asareAfricanDevelopmentBank,WorldBankand 18. choice islikelytobeparabolictrough..TheprojectcostcurrentlyestimatedaroundUSD200million. actual generatingcapacity,arecurrentlybeingreviewedbyLahmeyer,whoispreparingafeasibilitystudy.Thetechnologyof generated power,asisthecaseinmanyexistingCSPplantsSpain).Thisandotheropenengineeringoptions,including 17. The Gabèssitewasfinallyselectedandtheon-siteinsolationmeasurementcampaignisabouttostart. 16. Financing Source Projects inDisputedAreasOP/BP7.60 Projects onInternationalWaterwaysOP/BP7.50 Safety ofDamsOP/BP4.37 Involuntary ResettlementOP/BP4.12 Indigenous PeoplesOP/BP4.10 Physical CulturalResourcesOP/BP4.11 Pest ManagementOP4.09 Forests OP/BP4.36 Natural HabitatsOP/BP4.04 Environmental AssessmentOP/BP4.01 Safeguard PoliciesTriggeredbytheProject Total Bilateral Agencies(unidentified) Clean TechnologyFund African DevelopmentBank International BankforReconstructionandDevelopment Borrower Commissioning: June2015 Construction: June2013-May2015 Selection ofcontractor:Q22013 World Bankapproval:endOctober2012 World Bankappraisalmission:May2012 CTF presentation:March2012 Feasibility study:May2011-November2012(draftconclusions,includingsiteselectionandpreferredengineeringoptions: Timetable. Theexpectedtimetableisasfollows: Financing. ThefeasibilitystudyunderwaybyLahmeyerisfinancedtheNeighbourhoodInvestmentfacility(NIF) Technology andcost.STEGwouldratheroptforaplantwithoutstorage,withgasauxiliaryfiring(forabout15%of Site. Twositeswerepreselected,oneneartheseainGabèsarea,otherinlandbetweenGafsaandTozeur. Societe Tunisienne del'ElectriciteetduGaz [email protected] Senior EnergySpecialist Silvia Pariente-David Amount Yes 200.00 54.00 36.00 35.00 35.00 40.00 ✖ No ✖ ✖ ✖ ✖ ✖ ✖ ✖ ✖ TBD ✖ Public Disclosure Copy Public Disclosure Copy VII. Web: http://www.worldbank.org/infoshop Fax: (202)522-1500 Telephone: (202)458-4500 Washington, D.C.20433 1818 HStreet,NW The WorldBank The InfoShop Email: Tel: Title: Contact: Name: Implementing Agencies Email: Tel: Title: Contact: For moreinformationcontact: [email protected] (216-71) 334-366 Mr. MoncefHarrabi,ProjectManager Societe Tunisiennedel'ElectriciteduGaz(STEG) [email protected] 21671334366 DGA Mr. AmeurBchir