(PAERTE) COUNTRY : TUNISIA PROJECT APPRAISAL REPORT Date
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AFRICAN DEVELOPMENT BANK PROJECT : PROJECT TO DEVELOP AND EQUIP THE POWER TRANSMISSION GRID (PAERTE) COUNTRY : TUNISIA PROJECT APPRAISAL REPORT Date : May 2019 Project Officers Djamali IBRAHIME, Principal Energy Officer RDGN1 Adama MOUSSA, Chief Energy Officer PERN1 Bernadette NYANAJO, Principal Procurement SNFI1/RDGN4 Officer Beya BCHIR, Principal Environmental Officer RDGN4 Alain NNA EBONO, Regional Financial Management SNFI2/RDGN4 Coordinator Team Members Vladimir FAGBOHOUN, Chief Regional Legal Counsel PGCL1 Appraisal Mouctar TCHAKALA, Power Engineer (Consultant) RDGN1 Team Olfa KHELIFI, Consultant Environmentalist RDGN4 Moez MAKHLOUF, Finance Management Specialist SNFI2/RDGN4 (Consultant) Amel HAMZA, Principal Gender Expert RDGN2 Division Manager Achraf TARSIM RDGN1 Resident Representative Yacine FAL RDGN0 Regional Director General Mohamed EL AZIZI RDGN0 Sector Manager Daniel SCHROTH PERN1 Ibrahima KONATE, Chief Power Engineer RDGC1 Raymond KITANDALA, Senior Power Engineer RDGW1 Ismail MAHAMOUD HOUSSEIN, Principal Finance Sector Development Officer RDGN1 Peer Review Carlos Mollinedo, Chief Energy Economist PESR1 Maimounatou NDIAYE DIOP, Principal Transport Engineer RDGN1 Maria José MORENO RUIZ, Chief Gender Expert RDGN2 Public AFRICAN DEVELOPMENT BANK Disclosure Authorized PROJECT : PROJECT TO DEVELOP AND EQUIP THE POWER TRANSMISSION GRID (PAERTE) COUNTRY : TUNISIA PROJECT APPRAISAL REPORT Public Disclosure Authorized RDGN/PERN September 2019 Translated Document TABLE OF CONTENTS I. STRATEGIC THRUST AND RATIONALE ............................................................................. 1 1.1. Project Linkage to Country Strategy and Objectives .............................................................. 1 1.2. Rationale for Bank Involvement .............................................................................................. 2 1.3. Donor Coordination ................................................................................................................ 3 II. PROJECT DESCRIPTION ......................................................................................................... 3 2.1. Project Components ................................................................................................................ 3 2.2. Technical Solution Adopted and Alternatives Explored .......................................................... 4 2.3. Project Type ............................................................................................................................. 4 2.4. Project Cost and Financing Arrangements ............................................................................. 5 2.5. Project Area and Target Beneficiaries .................................................................................... 7 2.6. Participatory Approach to Project Identification, Design and Implementation ..................... 7 2.7. Bank Group Experience and Lessons Reflected in Project Design ......................................... 8 2.8. Key Performance Indicators .................................................................................................... 8 III. PROJECT FEASIBILITY ........................................................................................................... 9 3.1. Economic and Financial Performance .................................................................................... 9 3.2. Environmental and Social Impacts ........................................................................................ 10 IV. PROJECT IMPLEMENTATION .............................................................................................. 13 4.1. Implementation Arrangements .............................................................................................. 13 4.2. Monitoring ............................................................................................................................. 14 4.3. Governance ............................................................................................................................ 15 4.4. Sustainability ......................................................................................................................... 16 4.5. Risk Management .................................................................................................................. 16 4.6. Knowledge Building .............................................................................................................. 17 V. LEGAL FRAMEWORK ........................................................................................................... 17 5.1. Legal Instrument .................................................................................................................... 17 5.2. Conditions for Bank Intervention .......................................................................................... 17 5.3. Compliance with Bank Policies ............................................................................................. 18 VI. RECOMMENDATIONS ........................................................................................................... 18 Annex I: Comparative Socio-economic Indicators of Tunisia ................................................................ 1 Annex II: Table of Bank Portfolio in Tunisia (April 2019) ..................................................................... II Annex III: Map of the Project Area ....................................................................................................... III CURRENCY EQUIVALENTS May 2019 UA1 = TND 4.23 UA1 = EUR 1.24 EUR1 = USD 1.12 EUR1 = TND 3.42 FISCAL YEAR 1 January to 31 December WEIGHTS AND MEASURES 1 kilometre (km) = 1,000 m 1 are (a) = 100 m² 1 square kilometre (km²) = 1,000,000 m² 1 hectare (ha) = 10,000 m² 1 kilogramme (kg) = 2.204 pounds 1metric ton = 1,000 kg 1 metric ton = 2,204 pounds V = Volt A = Ampere VA = Volt-Ampere (VA) W = Watt Wh = Watt-hour 1 kV = Kilovolt = 1,000 V 1 kVA = Kilovolt-Ampere = 1,000 VA 1 kW = Kilowatt = 1,000 W 1 MW = Megawatt = 1,000 kW = 1,000,000 W 1 GW = Gigawatt = 1,000 MW = 1,000,000 kW 1 kWh = Kilowatt-hour = 1,000 Wh 1 MWh = Megawatt-hour = 1,000 kWh = 1,000,000 Wh 1 GWh = Gigawatt-hour = 1,000 MWh = 1,000,000 kWh 1 Toe = Ton of oil equivalent = 41,868 joules = 11,630 kWh 1 MToe = Million ton of oil equivalent = 1,000,000 Toe i ACRONYMS AND ABBREVIATIONS AFD French Development Agency AfDB African Development Bank AGTF Africa Growing Together Fund AIS Air-insulated substation AWPD Annual Work Programme and Budget BD Bidding documents CSP Country Strategy Paper DCTE Central Directorate for Electricity Transmission DEQ Directorate for Equipment DFC Directorate for Finance and Accounting DSE Directorate for Safety and the Environment EBRD European Bank for Reconstruction and Development EIA Environmental impact assessment EIB European Investment Bank ENPV Economic net present value ERR Economic rate of return ESAP Environmental and Social Assessment Procedures ESIA Environmental and Social Impact Assessment ESMP Environmental and Social Management Plan EU European Union EUR Euro GIS Gas-insulated substation GIZ German International Cooperation HSE Hygiene Security Environment HV High voltage IsDB Islamic Development Bank IFRR Internal financial rate of return KFW KreditanstaltfürWiederaufbau LV Low voltage MENA Middle East and North Africa MV Medium voltage MVA Megavolt-ampere MW Megawatt NPV Net present value PAERTE Project to Develop and Equip the Power Transmission Grid PIU Project Implementation Unit PV Photovoltaic (solar) STEG Société Tunisienne de l’Electricité et du Gaz [Tunisian Electricity and Gas Company] TFP Technical and financial partners TND Tunisian dinar TOE Ton oil equivalent UA Unit of Account (AfDB) USD US dollar VHV Very high voltage WB World Bank WHO World Health Organization ii PROJECT SHEET BORROWER : Société Tunisienne de l’Electricité et du Gaz (STEG) IMPLEMENTING AGENCY: Société Tunisienne de l’Electricité et du Gaz Financing Plan Sources Amounts in EUR Amount in UA Instrument million million AfDB 108 87 Loan AGTF 30 24 Loan IsDB 121 98 Loan STEG 31 25 Counterpart funds Total 290 234 AfDB Financing Information ADB Loan AGTF Loan Loan currency Euro (EUR) Loan type Fully flexible loan Maturity Up to 25 years Grace period Up to 8 years Weighted average maturity* To be determined (based on the amortization profile) Repayment Half-yearly instalments after expiry of the grace period Interest type Base rate + Financing margin + Lending spread+ Maturity premium This interest rate should be higher than or equal to zero. Floating base rate Floating (6-month EURIBOR, which resets on 1 February and 1 August or any other acceptable rate). A free option to set the base rate is available Funding Margin The Bank’s funding cost relative to 6-month Euribor. This margin is reset on 1 February and 1 August of each year Lending spread 0.80% (80 base points (bpts) Maturity premium To be determined as follows: - 0%, if the weighted average maturity is <= 12.75 years - 0.10%, if theweighted average maturity is > 12.75 years but <=15years - 0.20%, if the weighted average maturity is >15 years Commitment fee 0.25% (25 bpts) per year of the non-disbursed amount. Starts to accrue 60 days after the date of signature of the loan agreement and is payable on the set interest payment dates. Front-end fee 0.25% (25 bpts) of the loan amount Base rate conversion option** Besides the free base rate fixing option, the Borrower may revert to the floating rate or reset