Document of The World Bank FOR OMCIAL USE ONLY L /,-2 yY.)- Repor P No -3845U . REPORT AND ECOMEATION OF THE PRESIDENT OF THE InTERNAIONAL BANK FOR EONAND DEVELOPM TO THE EXECUTIVE DIRECTORS ON A PROPOSED LOWAN IN THE AMOUNT EQUIVALENT TO US$38 7 MIION TO THE SOCIEE TUNISIEE DE L'ELECTRICITE ET DU GAZ (STEG) WITEI THE GUARATEE OF THE REPUBLIC OF TUNISIA FOR A FOURTH1 POWER PROJECT June 4, 1984 _This dcmmt h, a restied dlsobudou ad way be used by recipleut only in the perfonone of thedr effe. duis Ds eateauts may not odherw be discsud without Woed Dk authoriatlos. CURRENCY EQUIVALENTS Currency Unit - Tunisian Dinar (TD) The exchange rate of the Tunisian Dinar is floating. The rate which is used in the Staff Appraisal Report approximates the current rate. It is; I US $ = TDO.67 1 D - US $1.49 STEG's Fiscal Year January 1 - Derember 31 ACRONYMS AND ABBREVIATIONS ERR - Economic Rate of Return ETAP - Tunisian Petroleum Company GDP - Gross Domestic Product GNP - Gross National Product LRNC - Long-run marginal cost ODA - Official development assistance SNIDP - National Petroleum Distribution Company STEG - Tunisian Electricity and Gas Company STITR - Tunisian Refinery Company toe - tons of oil equivalent USAID - United States Agency for International Development UTB - Union Tunisienne de Banques FOR OMCIAL USE ONLY REPUBLIC OF TUNISIA FOURTH POWER PROJECT LOAN AND PROJECT SUMMARY Borrower: Societe Tunisienne de l'Electricite et du Caz (STEG) Guarantor: Republic of Tunisia Amount: US$38.7 million equivalent, including capitalized front-end fee. Terms: Seventeen years including four years of grace at the standard variable interest rate. Project Description: The project, a continuation of the Third Power project (Loan 2003-TUN), would support STEG's three-year investment program (1985 through 1987) for: (i) rural electrification; (ii) rehabilitation of the urban network; and (iii) provision of equipment, vehicles, tools, and training. The rural electrification component would extend electricity service to about 35,000 new domestic customers, 1,500 pumping stations and 50 commercial and small industrial consumers- The urban rehabilitation component would improve the quality of service to more than 130,000 existing customers by rehabilitating the distribution systems of about 60 cities and towns. The third component would provide the construction, erection and testing equipment, vehicles, tools and training (about 70 persons for a total of about 120 staff-months) which would assist STEG in implementing the project and mproving its technical capabilities. The project involves the supply, construction and erection of about 2500 km of medium-voltage lines, 2600 km of low-voltage lines; and 65 MVA of distribution transformer capacity. Project Benefits and Risks: The project would extend electricity service to the * beneficiaries at least-cost by implementing the long-term program for rural electrification, reducing system losses, improving sales of electricity and * operating efficiency of the system, and continuing the Bank's efforts in assisting STEG to expand its training program. In addition, the proposed project would follow up on the efforts started by previous Bank loans (1864-TUN and 2003-TUN) in rationalizing fuel and electricity pricing. The project presents no special risks. This document has a rcstncted distribution and may be used by recipients only in the performance | of their official dutics- Its contents may not otherwise be disclosed withoul World Bank authorization. - ii - Estimated Proiect Cogt: Local Foreign Total $ million Rural Electrification Equipment and Materials 3.9 8.4 12.3 Installation and Erection 5.7 - 5.7 Engineering and Construction Supervision 3.2 - 3.2 Subtotal 12.8 8.4 21.2 Urban Rehabilitation Equipment and Materials 4.5 9.5 14.0 Installation and Erection 6.4 - 6.4 Engineering and Construction ,upervision 3.5 3.5 Subtotal 14.4 9.5 23.9 Equipment, Tools, Training Equipment and Tools 3.1 10.7 13.8 Training 0.4 0.4 Subtotal 3.1 11.1 14.2 Base Cost 30.3 29.0 59.3 Physical Contirngencies 5.4 3.6 9.0 Price Contingencies 8.6 6.0 14.6 Total Project Cost 44.3 /1 38.6 82.9 Front-end Fee - 0.1 0.1 Total Financing Required 44.3 38.7 83.0 /1 Includes about $6.5 million in customs duties and taxes . - 111 - Financing Plan: Local Foreign Total $ million IBRD 38_7 38.7 STEG Internal Cash Generation 24.0 - 24.0 Customers' Contributions 1.7 1.7 Government 18.6 - 18.6 Total 44.3 38.7 83.0 Estimated Disbursements: Bank FY 1985 1986 1987 1988 1989 :$ million Annual 0.6 7.0 11.0 13.0 7.1 Cumulative 0.6 7.6 18.6 31.6 38.7 Rate of Return: about 12 percent (on STEG's overall investment program) Staff Appraisal Report: No. 4817-TUN of June 4, 1984 . INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT REPORT AND RECOMMENDATIUN OF TBE PRESIDENT OF THE IBRD TO THE EXECUTIVE DIRECTORS ON A PROPOSED LOAN TO SOCIETE TUNISIENNE DE L'ELECTRICITE ET DU GAZ (STEG) WITH THE GUARANTEE OF THE REPUBLIC OF TUNISIA FOR A FOURTH POWER PROJECT 1. I submit the following report and recommendation on a proposed loan for the equivalent of US$38.7 million to Societ6 Tunisienne de l'Electricite et du Gaz (STEG) with the guarantee of the Republic of Tunisia to help finance a Fourth Power project. The loan, which includes a capitalized front-end fee of 0.25 percent on the Bank loan, would have a term of 17 years, including 4 years of grace, at the standard variable interest rate. PART I - THE ECONOMY I/ 2. A special economic report entitled "Tunisia - Review of the Sixth Development Plan (1982-86)" (No. 4137-TUN), in two volumes, was distributed to the Executive Directors on March 16, 1983 and June 29, 1983. This part and the country data sheets, attached in Annex i, reflect the report's findings. They also reflect preliminary results for 1983. An economic mission to review the performance of the first two years of Plan implementation visited Tunisia in April 1984; revised projections for Annex I are being prepared. 3. Much of Tunisia is arid or semi-arid. Only three percent of arable land is irrigated, and areas where rainfed agriculture is possible are subject to severe year-to-year fluctuation in rainfall. Tunisia's most important raw materials are phosphates, petroleum, and natural gas. While the known exploitable reserves of oil and gas are approaching depletion, and the phosphate deposits are of relatively low quality, there have recently been promising indications of new hydrocarbon reserves, although it is too early to assess their exact potential. The country also has considerable tourism potential, and efforts have been made during the last decade to develop it rapidly. 4. Since independence in 1956. Tunisia has undertaken a massive effort towards development of its human resources, paying special attention to family welfare, education, and technical and vocational training. As a result, the infant mortality rate declined from 150 in the early 1960s to 90 at the end of the 1970s, the adult literacy rate increased from under 15 percent to about 62 percent, and average caloric supply per capita increased from about 80 to 115 percent of minimum standard requirements. An active family planning policy pursued by the Government led to a decrease in fertility and birth rates. However, since at the same time mortality rates also decreased, the annual natural demographic growth rate decreased only slightly from 2.6 percent in the 1960s to 2.4 percent in the 1970s. Moreover, after 1976, the net emigration of Tunisians abroad was sharply reduced by restrictive measures taken in the EEC countries and Libya. 1/ Part I is substantially the same as Part I of the President's Report No. P-3809-TUN of May 7, 1984, for a Second Transport Project. - 2 - 5. Agriculture still occupies nearly one out of every three Tunisians in the labor force. To accelerate job creation, more than half of the total investments of the Fifth Plan (1976-81) was allocated to directly productive sectors, but the direct employment effects of the leading sectors (petroleum, phosphate mining and processing, and tourism) are small. These sectors, however, make a vital contribution to GDP, public savings, and exports. They provided 52 percent of the country's foreign exchange earnings in 1983, while manufacturing activities, except phosphate-based chemicals, provided 19 percent. 6. Recent Economic Developments. During the Fifth Plan the growth performance differed from the impressive growth achieved from 1971 to 1976: output in agriculture and in food industries has grown on average below the demographic rate since 1976, partially as a result of bad weather conditions; textile production and tourism development grew at a slower pace mainly because of difficulties in European markets. By contrast, manufacturing industry other than textiles, as well as energy, phosphate processing, construction, and construction materials expanded at a fast pace. 7. In spite of the considerable increase in domestic demand, particularly in investments, the balance of payments situation remained favorable from 1976 to 1981. Imports in current prices grew at a slower pace than exports, and the terms of trade improved significantly due to sharply bigher post-1974 export prices for crude oil. As a result, the resource gap remained relatively small, and domestic savings financed on average over 76 percent of investment, which increased from an average of 23 percent of GDP for 1972-76 to 30 percent for 1977-81. The current account deficit was easily financed; grant aid and private investments (mainly for oil exploration) provided about 30 percent, while the remainder was mainly covered by long-term foreign borrowing. Thus, during the 1970s total foreign debt increased little relative to GDP, and the debt service ratio dropped from 15 percent in 1971 to 10 percent in 1979. 8. The public sector has played a major role in mobilizing and redistributing domestic resources. Central Government revenues were equivalent to about one-third of GDP on average for the Fifth Plan period, one of the highest shares among middle-income countries. Over 30 percent of these revenues was saved, and public savings financed close to two-thirds of total Government capital expenditures. This comfortable public finance situation permitted a rapid increase in payments to private consumers and public enterprises. Such transfers, including those for social security, accounted for 19 percent of total current budget outlays and over 7 percent of GDP in 1981. 9. The main objectives of the Fifth Development Plan were achieved, except for the employment target, and open and hidden unemployment remains a serious problem for the Tunisian economy at present. The actual GDP growth fell short by 1.2 percentage points of the planned rate of 7.3 percent p.a., mainly because of poor performance in agriculture, while the investment objective of 30 percent of GDP was fully met. Completion of some large projects in the public sector (steel, expansion of the oil refinery) was, however, delayed, but private sector investments, both foreign and national, exceeded Plan targets. Although job creation objectives were achieved in all non-agricultural sectors except construction, these sectors could only absorb 90 percent of new job seekers at a time when migration to Libya and Europe slowed down. The overall unemployment rate, estimated at about 12 percent of the labor force in 1980, has therefore not declined. 10. In 1982 and 1983, the current economic situation suffered a series of setbacks. GDP in constant prices stagnated in 1982. Three factors accounted for this poor performance: adverse weather conditions which depressed agricultural output and consequently, agro-industrial output; recession in Europe which reduced exports, particularly chemicals and tourism; and exceptional technical problems in key intermediate industries. GDP is estimated to have increased by 4.5 percent in 1983 reflecting a stronger performance in the industrial sector. The slowdown in outrut, coupled with a large increase in minimum wages and some price liberalization led to an unusually high inflation (13.7 percent) in 1982. In 1983, inflationary pressures were slowed down by an administered reduction in producer prices and sales prices of industrial products and also by an intensification of price controls. The consumer price index in December 1983 was about 6 percent above the December 1982 level. During 1982-83, the current account deficit of the balance of payments experienced a sharp deterioration reflecting: the fall in petroleum export receipts and the reduction in exports of agricultural products; the increase in imports of food products and consumer goods; and the slowdown in tourism due to the unfavorable international economic environment. The deterioration in the trade balance led to a steady drain in the level of foreign reserves in the first half of 1983 and recourse to commercial credit. This trend was reversed in the second half of the year as petroleum exports picked up. Gross reserves at the end of 1983 were equivalent to 1.3 months of imports. II. Medium-term Prospects. The main objectives of the Sixth Development Plan (1982-86) are employment generation, export promotion, and more rapid growth in the three least developed regions of the country (North-West, Center-West, and South). Sectoral priority is to be given to agriculture, engineering industries, and tourism. 12. The outlook for investment and growth will partly depend upon future developments in the oil and natural gas sector. Oil and gas exploration programs under way have been encouraging. Based on known reserves, and with the possible exploitation of smaller fields that recently became profitable, it is generally expected that domestic oil and gas production could be stabilized at about its present annual level of 5-6 million tons of oil equivalent until the end of the decade. Barring large new oil or gas discoveries, and given the rise in domestic demand for energy, Tunisia will have to face the consequences of a decline in energy revenues. To meet this challenge, the Government has introduced policy changes in the Sixth Plan to reduce the associated economic and social strains, and avoid major balance-of-payments problems. 13. The GDP growth objective of the Sixth Plan of 6.0 percent per annum will be difficult to achieve in view of the poor performance in 1982 and 1983. Growth of traditional exports (tourism, textiles, and phosphate-based chemicals) will be insufficient to compensate for the projected decline in oil export revenues. Production diversification and export promotion, in particular for engineering products, will also take time to bear fruit. The Government's strategy, therefore, rightly aims at containing domestic demand in order to control import growth. Terms of trade are unlikely to improve. This would not only affect the external account but also result in slower growth of domestic savings, particularly public savings. 14. Consequently, the Sixth Plan projected a decline in the fixed investment rate from 30 percent of GDP in 1977-81. A major objective was also to correct recent capital intensive biases in projects by appropriate sectoral allocation of investments. These two objectives will be difficult to achieve; investment - 4 - remained at 30 percent of GDP in 1983 and job creation fell short of the projected level. Therefore, more resources will have to be allocated to small and medium manufacturing enterprises in the underdeveloped regions, in order to ease the unemployment problem and reduce income disparities between rural and urban areas. Since June 1981, a new set of policy measures has targeted the incentive system toward this objective. The Investment Code was modified to establish industrial zones and offer direct subsidies for job creation in new projects in underdeveloped regions, and a Promotion Fund for Handicrafts and Household Workshops was created. In order to promote a more efficient technical and financial management of the public and private modern sectors, the Plan assigns a major role in project promotion and supervision to an expanded network of new development banks (two opened in 1981 and four in 1982); they are joint ventures with foreign investors and should prevent the pressure on the budget to finance too large a share of public investments. 15. Increasing budgetary constraints require a reassessment of the present policies of subsidies for energy, basic foodstuffs, transportation, and public sector enterprises. In addition, interest rate policy and a better-adjusted fiscal system should be used to restrain final consumption and stimulate savings. As first encouraging steps in 1981 and 1982, sizeable price increases in energy and agricultural products were implemented, and the whole interest rate structure was revised upward, rates on saving accounts and term deposits and industrial lending rates being increased by 1.5 to 2 points. Earlier this year when the 1984 budget was presented, the Government announced its decision to increase bread prices sharply and remove the subsidy on bread, cereals and cereal products, a subsidy which represents about 2 percent of GNP. The price increases triggered social unrest and the Government had to abrogate its decision and revise the initially presented budget. There were sizeable increases of the legal minimum wage in 1982 and 1983, mainly to improve the low-wage earners' living conditions, but the Government recognizes that overall wage and salary policies should keep labor cost increases (including social costs chargeable to enterprises) in line with productivity increases, particularly since Tunisia wants to stimulate tourism, and improve its international competitiveness for exports of manufactured goods. 16. Social Issues. Since independence, the country has come a long way towards meeting the basic needs of its population and reducing absolute poverty. About 16 percent of GDP is now devoted to social programs. However, unemployment among the young and regional pockets of poverty still present serious social problems. 17. Recently published data show that the continued attention of the Government to poverty oriented social programs resulted in a reduction of the ratio of people under a minimum standard income from 17 percent of the total population in 1975 to 13 percent in 1980. During this period, the overall number of this group declined in urban areas but remained the same in some rural zones in the center of the country, as a consequence of poor agricultural performance. Income differentials between the coast (East) and the interior (West) widened, in part because the system of price controls and subsidies as well as budgetary expenditures had a weak redistributive impact. The Government is focusing on the zones of poverty, with a view to eradicating them before the end of this century. Reducing the demographic growth rate is considered an important factor in this endeavor. 18. Education expenditures rank first among budgetary outlays. The comprehensive education system provides free access to all students, and the gross enrollment rate has reached 100 percent for primary education, and 30 percent for - 5 - secondary education. The performance of the system could, however, be improved by expanding vocational training programs, iumproving their relevance and responsiveness to labor demand, and to the special needs of the poor and rural groups. 19. Public health services are second among social expenditures, and their overall beneficial effect is reflected in the improvement of the vital statistics (para. 4). There remain, however, regional disparities in the availability of hospital beds, doctors and nursing personnel; health services have concentrated largely on curative medicine, and the medical reEerral system is not functioning properly. As a result, the rural poor are often excluded. Closely linked to nutritional deficiencies, infant mortality remains high relative to other middle-income countries. 20. In the Sixth Plan, investment in education, health, housing and water supply focuses more on deprived areas, provided at lower costs (health, shelter), and made more relevant to the needs of the economy (training). In education, two reforms are under discussion: the first one would provide a nine-year schooling period for all children, and the second would create polytechnical high schools combining basic and technical education. In health, the Sixth Plan allocates more resources to preventive medicine and nutrition education. Finally, as regards housing, public subsidized programs are directed to the neediest population groups. The housing demand from households above the minimum standard income can be satisfied by the private sector. 21. External Assistance and Foreign Debt. During the second half of the 1970s, the growth of foreign borrowing was modest and a growing share of foreign funds was provided by public sourcc- at relatively soft terms. Foreign loan commitments averaged about $700 million per annum, 62 percent of wnich in the form of official assistance (ODA). About 65 percent of ODA commitments came from bilateral sources, chiefly France, the Federal Republic of Germany, Canada, and some oil-surplus countries. About 24 percent of total ODA was committed by the Bank Group, and some 11 percent by other multilateral sources. Borrowing terms were favorable, averaging 5.8 percent interest and 18.5 years maturity, including a grace period of 5 years. At the end of 1983, debt outstanding and disbursed was estimated at about $3.7 billion, or 45 percent of GNP; debt service was 17 percent of export revenues in 1983. 22. The current account deficit reached $740 million in 1983, and is projected to grow to about $1.0 billion in 1986. New loan commitments from abroad are projected at $1.2 billion per year on average (at 1983 dollar exchange rates) with ODA providing half of the total. The external debt-service ratio is not expected to increase significantly in the medium term. 23. Prospects depend on a timely implementation of policy changes to curb domestic demand, promote exports, and improve public sector savings. It should be noted, however, that the Sixth Plan recommended a low growth scenario in order to preserve the country's relatively high financial stability and creditworthiness. This objective remains even more crucial if the country is to succeed in mobilizing the large inflows of direct foreign capital assumed in the Plan. Foreign investments were small during most of the 1970s but have gained momentum during the last three years in line with increased activities in the oil sector, and new incentives offered to foreign investors in manufacturing. The newly created development banks (para. 14) are expected to play a significant role in this context. 24. In conclusion, the balance-of-payments outlook in the medium term will depend on developments in the hydrocarbon sector and on the policy changes to be initiated during the next few years. Considering its long record of prudent balance-of-payments and external debt management, there are good grounds to assume that the Government will apply the necessary policy changes and Tunisia will continue to be creditworthy for future Bank lending. The Bank's close dialogue with the Government on several policy aspects at the macro and micro levels will be pursued in connection with the implementation of these policy changes. PART II - BANK GROUP OPERATIONS IN TUNISIA 25. Since 1962, the Bank has committed to Tunisia sixty-two loans and ten IDA credits amounting respectively to $1,293.2 million and $75.2 million (net of cancellations) of which forty loans and credits have been fully disbursed. Annex II contains a summary statement of Bank loans, IDA credits and IFC investments as of March 31, 1984. Project implementation is generally satisfactory. As of December 31, 1983, overall disbursements amounted to 54 percent of appraisal estimates, which is in line with experience in other countries in the region. Disbursement performance for irrigation, industrial finance and port projects has generally been above the country average, while longer than average disbursement delays have been experienced for agricultural credit, education, highway. urban and fisheries projects, due to project specific problems that are being addressed through supervision missions and sector discussions. In a number of sectors, important institutional improvements have been achieved, and autonomous agencies have been created or strengthened to ensure the efficient management of the related sectors or subsectors. 26. The Bank's lending strategy in Tunisia aims at supporting Government efforts to: (a) increase employment; (b) encourage more balanced growth and distribution of income among regions and income groups with particular emphasis on rural areas, and on operations targeted to low-income population groups; (c) promote export-oriented policies, technological changes and improvements in labor productivity; and (d) provide selective support for the development of basic infrastructure and for institution building in key public services. An important feature of this strategy is to support the Tunisian authorities in the timely and well-coordinated preparation of projects through missions and advice by Bank staff, the assistance of the IBRD/FAO Cooperative Program, the use of the Bank's Project Preparation Facility, and technical assistance projects. The Bank is also supporting the Government in its efforts to increase the mobilization of domestic resources, and to secure cofinancing for the projects it assists. The latter is particularly important for projects in the industrial sector where foreign financing agencies rely often on the Bank's project appraisal and supervision capabilities, and in view of the extent of Tunisia's external resource needs. 27. Within this broad framework, past lending emphasized support for long-term investments in infrastructure and social development. Lending for urban and social development including water supply, sewerage, education, health, urban development and the Tunis planning and public transport project has accounted for 34 percent of Bank/IDA commitments in Tunisia since 1971. Lending for transport, power and tourism infrastructure has accounted for 27 percent. Agriculture and fisheries have received 22 percent, and industrial and hotel financing, mostly through the Economic Development Bank of Tunisia (BDET), 17 percent of total commitments. In addition, the Bank has made two loans for technical assistance, the first aimed at improving the Government's capability for project identification and preparation in the agriculture, industry and energy sectors, and the second designed to rationalize and develop the mining industry. -7 -. 28. In line with its lending strategy, the Bank will pursue its efforts in key sectors of the economy that offer prospects for economic and social development. It will also assist projects which address the needs of the least developed regions of the country, develop research capabilities, increase productivity, and help reduce the gap between income groups and between urban and rural areas. Particular attention will be paid to employment creation, institution building and agricultural development. In addition to the proposed Fourth Power project, proposed future lending would include projects for agricultural development in northwestern Tunisia, rural health, urban and regional development, irrigation, industry and energy. 29. The Bank's economic and sector work will continue to focus on strengthening the macroeconomic and sector base for our lending program. It will be centered on the analysis of economic issues and policies related to the necessary adaptation process from a petroleum exporting to a petroleum importing country. This analysis, which was included in the special economic report entitled "Tunisia - Review of the Sixth Development Plan (1982-86)" (No. 4137-TUN), dated March 16, 1983 and June 29, 1983, is being pursued through a special study on industrial employment creation. A review of the mid-term performance under the Sixth Plan took place in April 1984. Further economic and sector work will include a financial sector study, an industrial policy review, studies of educational finance and administration and housing finance, and a review of the transport sector. 30. The Bank and IDA accounted for about 30 percent of total public commitments to Tunisia during 1979-1982. Their share in total debt outstanding and disbursed at the end of 1982 (including loans from private sources) was about 12 percent, and their share in debt service during 1982 was 11 percent. The share of the Bank and IDA in Tunisia's disbursed external debt is expected to be about 11 percent and their share in the debt service to increase to about 13 percent through 1986. 31. IFC has invested in NPK Engrais (a fertilizer plant), in BDET, in Compagnie Financiere et Touristique (COFIT, a company to promote and invest in tourism projects), in Societe Touristique et Hoteliere RYM (a large hotel development), in Industries Chimiques du Fluor (ICF), which produces aluminum fluoride from local fluorspar for export, and in the Sousse-Nord integrated tourism development project. IFC's net commitments in Tunisia totalled $8.5 million, as of March 31, 1984. Currently, IFC is considering a project to rehabilitate and modernize the fluorspar mine supplying ICF, the creation of a leasing company which would be Tunisia's first, and a fertilizer project which would produce phosphoric acid for export. * PART III - THE ENERGY SECTOR 32. Energy Resources. Oil and gas are Tunisia's main energy resources. In addition, the country has a modest hydropower potential, some lignite deposits and geothermal resources as well as the possibility for using renewable energy, notably solar and wind energy. 33. Oil and Gas. Proven reserves of oil are estimated at 70 million tons and those of gas at 66 million tons of oil equivalent (toe). El Borma, in the south-western desert area bordering Algeria, and Ashtart, offshore in the Gulf of Gabes, are the major oil fields contributing about 85 percent to total oil production. Both fields are depleting rapidly and will cease production in the 1990s. Gas is produced at El Borma as associated gas, and from a small reservoir at Cap Bon. In addition. starting in 1984, Tunisia is receiving natural gas as royalty (in kind or cash) for the transit through its territory of the Algeria-Italy intercontinental pipeline, and purchases, under a three-year contract, additional gas from Algeria. Major untapped gas reserves exist offshore in the gulf of Gabes (Miskar and Jugurtha) and onshore at El Franig near the Chott El Djerid. The US oil company AMOCO is finalizing the appraisal of El Franig, and a decision on whether or not to develop this field is expected in the near 'uture. Given the depletion of its oil resources, natural gas is expected to play an increasingly important role in meeting Tunisia's medium-term energy requirements. 34. Other Resources. Tunisia's small hydropower potential amounting to 65 MW has already been exploited. It includes the recently commissioned Sidi Salem plant, part of a multi-purpose project in which the Bank is participating. Poor-quality lignite deposits exist in two locations and are presently under study. Underground hot water resources exist at several locations. The extent of this geothermal potential is being investigated in the context of the Bank-assisted Technical Assistance project (Ln. 2197-TUN). Several experimental schemes are pianned or are underway to determine the viability of exploiting Tunisia's renewable energy resources. Two demonstration projects are testing the potential of utilizing solar energy for lighting, water pumping for irrigation and water heating in rural areas. Although these systems operate satisfactorily, the cost per KWh generated for most applications exceeds by far that of energy produced by conventional generating plants. The economics of solar water heaters, however, have already been established. By 1986, about 10,000 locally manufactured units could be installed, provided a public information and education campaign is undertaken, possibly accompanied by a credit scheme to encourage purchasers. The Tunisian Electricity and Gas Company (STEG) is working on this project. A number of projects to demonstrate the viability of utilizing wind energy are under implementation including a scheme to collect data on wind and solar regimes in different parts of the country which is financed under the Bank-assisted Tecnnical Assistance project. Experiwental projects to test the use of wind ene-gy for generating electricity are planned at Cap Serrat and on the island of Kerkennah, partly with bilateral assistance (USAID). 35. Energy Demand and SupplY. Since 1976. commercial energy consumption has increased by about 8 percent per year and reached about 3 million toe in 1982. In 1982, oil and gas contributed 96 percent of commercial energy consumption, the remainder being supplied by hydropower and imported coal. The growth in energy demand exceeded that of the economy as a whole (GDP grew at about 5 percent per year during the same period) and was to a large extent due to the rapid growth of energy-intensive industries, such as building materials and phosphate processing. During the same period, oil and gas production increased by about 2 percent per year, from about 4.8 million toe to 5.5 million toe. While energy consumption is expected to continue to grow at about the same rate as during the past six years, oil and gas production combined is likely to remain at the present level until the early 1990s by which time Tunisia is expected to become a net importer of energy. 36. Energy Pricing and Conservation. Until 1980, the Government followed a deliberate policy of minimizing the cost of energy products to the major users as a means of controlling inflation, and promoting industrial development and the use of local energy resources. While this policy of low energy prices probably bad some effect in meeting these objectives, it also encouraged the creation of energy-intensive industries and discouraged energy conservation. To ensure an economic allocation of resources and in line with agreements reached with the Bank in the context of two loans to the energy sector (Second Natural Gas Pipeline project - Ln 1864-TUN. and Third Power project - Ln 2003-TTUN) the Government adopted, in 1980, international prices as benchmarks for setting internal prices. The objective of reaching parity with international prices for all petroleum products by December 31, 1986 was slightly modified under the proposed project to reflect the fact that domestic prices for some petroleum products already exceed international levels (Guarantee Agreement, Sections 3.03 and 4.01). As a result of substantial successive price increases since the adoption of this policy, retail prices of gasoline now exceed international prices by a wide margin, those of liquid petroleum gas and diesel oil have nearly reached parity, while heavy fuel oil and kerosene prices are now about two-thirds of international levels. In addition to the introduction of appropriate pricing, the Government is taking measures to encourage energy conservation among major users- With assistance from USAID, it has recently completed an energy modeling, conservation and data collection study. Independent studies on six major energy consuming areas (industry, agriculture, transportation, households, trade and institutional users) are underway. In addition, energy audits of major industries have been initiated (partly financed under the Bank-assisted Technical Assistancc project) with a view toward introducing energy saving measures in these industries. Sector Organization 37. Tunisia's energy sector is managed by the Ministry of National Economy through five directorates under the leadership of a Director General, and a number of state-owned enterprises. In the oil subsector, the Tunisian Company for Petroleum Activities (ETAP) coordinates petroleum exploration and production which is undertaken by foreign companies and in partnership with such companies. The Tunisian Refinery Company (STIR) operates the oil refinery, and the National Petroleum Distribution Company (SNDP) shares the local market of refined petroleum products with several foreign private firms. The Tunisian Electricity and Gas Company (STEG) is responsible for the generation and distribution of power as well as for the distribution of manufactured and natural gas. The Electricity Subsector 38. Demand and Suppl . Demand for electricity in Tunisia during the past twenty years increased on the average by about 12 percent per year with growth * rates of about 17 percent per year in the late 1970s. STEG is supplying about 90 percent of this demand, the remainder being met through autogeneration by several industries that sell any surplus to STEG. Following the general slowdown of economic activity, the increase in the demand for electricity declined sharply in 1982, but recovered to about 12 percent in 1983, and is expected to decline gradually to about 9 percent per year by the end of the decade. STEG's power generating facilities are largely interconnected and comprise four steam plants (548 MW installed capacity), five hydro plants (65 MW) and nine combustion turbine plants (489 MW). Some small diesel plants (4 MW) serve isolated areas. A major investment in STEG's generating capacity is underway through the construction of a 4x160 MW steam power stat~Dn at Rades, wnich is being implemented in two phases for commissioning in 1985 and 1989. - 10 - 39. The main 225-kV transmission system is about 2,400 km long, with medium and low voltage distribution lines of about 13.800 km and about 16,600 km length, respectively. In 1982, medium and high voltage consumers accounted for about 72 percent (2,014 GWh) of STEG's total sales and about 820,000 low voltage consumers (mostly domestic consumers in urban areas) for the balance. STEG's 1983/88 investment program in the distribution system. estimated at $290 million equivalent, comprises: a) rural electrification aimed at increasing the level of access to electricity in rural conglomerations from 37 percent in 1982 to 67 percent in 1988, b) rehabilitation and extension of urban systems aimed at improving the reliability of service and reducing O system losses from 14.2 percent to 13.2, and c) extension of medium and high voltage systems to new industries and urban consumers. STEG's total 1983-88 investment program which is estimated at about $930 million exceeds that of the previous six years (1977-82) by about 35 percent in real terms, mostly due to the 'lumpy' character of the investment in generation facilities. The Bank has reviewed this program, considers its size and contents reasonable, and expects resources to be available to finance it. 4G- Electricity Tariffs. The Government authorizes tariffs, acting on proposals by STEG. While STEG's tariff proposals are based on the principle of covering long-run marginal cost (LRMC), in addition to seeking to meet the company's financial requirements, the Government also takes socio-economic considerations into account in deciding on average tariffs as well as tariffs to certain groups of consumers. STEG benefits from relatively low fuel prices (it receives associated gas from El Borma at a nominal price and still pays prices below the international level for purchases of fuel oil) and receives contributions from the Government for rural electrification (para. 46). In addition, in line with the Government's policy of promoting the industrialization of the country, large industrial consumers are cross-subsidized through particularly favorable tariff levels. As a result, while STEG's average tariff is close to LRMC (92 percent), tariffs to high-voltage consumers are only about 74 percent of MC. The level of electricity tariffs has been the subject of a continuing dialogue between the Government. STEG and the Bank in the context of previous Bank operations in the energy sector. In the process, the price of fuel oil to STEG increased from about 25 percent of international levels in 1976 to about 67 percent at present, in spite of greatly increased international prices and a weakening of the dinar vis-a-vis the dollar by about 60 percent over the past 2 years (para. 36). In addition, to avoid delays in Government approval of tariff increases requested by STEG following increases in fuel oil prices, the Government and STEG agreed with the Bank in the context of the Third Power project (Ln. 2003-TUN) that such increases be passed on to electricity consumers within two months of their effectiveness. This agreement was confirmed for the proposed project (Loan Agreement, Section 5.08 and Guarantee Agreement, Section 3.06). Furthermore, during negotiations an understanding was reached with STEG and the Government that the structure of electricity tariffs, as amended by future rate increases, would increasingly reflect the economic cost of supplv at different voltage levels. By November 30, 1984, STEG and the Bank would agree on a methodology for calculating LRMC, and determine the terms of reference for a study which would (i) compare electricity tariffs for different consumers with their LRMC; and (ii) analyze the impact of bringing tariffs in line with LRMC. The study, including conclusions and recommendations, would be furnished to the Bank by April 30, 1985 for review and comment. STEG, the Government and the Bank would agree, by September 30. 1985 on an action plan to implement the recommendations of the study. which the Government and STEG would subsequently follow. - 11 - Bank Role in the Sector 41. Since 1971, the Bank has supported the development of Tunisia's energy resources through six operations with STEG. The first project helped finance a gas pipeline from El Borma to Gabes through a loan of $7.5 million (Ln 724-TE-N of February 25, 1971). A second loan of $12 million (Ln 815-TOIN of April 20, 1972) assisted in the installation of 2x20 MW combustion turbines and the expansion of the transmission and distribution system. A $14.5 million loan (Ln 1355-TUN of January 12, 1977) financed the installation of additional 7x21 MW combustion turbines. STEG completed these first three projects successfully. The Project Performance Audit Reports on the first two projects (PPAR nos. 1078 and 2521) noted the catalytic effects of these projects in many areas, including STEG's improved financial performance and technical capability, and their contribution to making STEG a well-organized and efficient utility. The third project, -n addition to achieving its physical and institution-building objectives, also contributed significantly to introducing a more ratio ial energy pricing policy, a subject that was pursued further through the Second Gas Pipeline project ($37 million loan, Ln 1864-TUN of October 22, 1980 as amended or July 15. 1981) and the Third Power project ($41.5 million loan, Ln 2003-TUN of July 15, 1981). Loan 1864-TUN assists in financing the construction of a gas pipeline distribution system to convey royalty gas from the Algeria-Italy intercontinental pipeline to the major consumption centers in Tunisia. The implementation of the project is progressing satisfactorily, and the construction of the major trunk lines is substantially completed. Tunisia started to receive natural gas through this system in late 1983. Loan 2003-TUN helps finance the first three years of STEG's five-year (1982-86) distribution program. The physical implementation of the project is ahead of schedule, but disbursements are lagging behind due to the need to revise the procurement documents for the supply of equipment and materials in accordance with Bank guidelines. Finally, the Bank has made available to Tunisia $1.8 million for energy-related studies as part of the Technical Assistance project ($4.5 million loan, Ln 2197-TUN of October 29, 1982). The energy component of that project provides funds for studies on petroleum products distribution, renewable and geothermal energy, energy conservation, and information systems improvement with a view to preparing investible project in some of these areas. Because of institutional issues, which are now being overcome, start-up on some of these energy-related studies has been slow. PART IV - THE PROJECT . 42. During 1979-1980, while preparing for the country's Sixth Development Plan (1982-86), STEG compiled information relating to the electrification of about 2000 villages in all parts of the country. Applying a methodology which had been developed by Tecsult International Limited (Canadian consultants) in the context of an earlier rural electrification study for Tunisia, STEG used this information to prepare a least-cost program for the development of the rural distribution system. The program which is being updated annually was reviewed by the Bank and found satisfactory. To ensure the overall economic viability of the propesed project, an average cost limit per connection of TD700 ($1045) at end-1983 prices for each Governorate was established. To develop the urban rehabilitation component of the project, STEG performed measurements on a representative sample of lines per district, and estimated the quantities of material and the associated costs for rehabilitating the system. The proposed project was appraised by the Bank in June/July 1983. - 12 - The Staff Appraisal Report entitled "Tunisia - Fourth Power Project" (No. 4817 of June 4, 1984) is being distributed separately. Negotiations were held in Washington, D. C. from March 19 to 23, 1984. The Tunisian Delegation was led by fr. Berrejeb of the Ministry of Planning and included Messrs. Ramza and Masmoudi of the Tunisian Electricity and Gas Company. The main features of the loan and project are listed in the Loan and Project Sumnary and in Annex IIl. A map showing the project locations is attached. 43. The Borrower. The Tunisian Electricity and Gas Company (STEG) was created in 1962, to take over the operations of seven private utility companies upon their nationalization. Since then, it has developed into an efficient, mature, and well-operated public utility. It not only serves a rapidly-growing number of customers in Tunisia, but also increacingly extends technical assistance to electricity companies in Arab and francophone African countries. Most of the tasks which initially required outside assistance, such as the preparation of studies for rural electrification and the power generation program, evaluation of bids, updating of tariff studies, standardization of distribution equipment, are now performed by STEG's own staff. STEG is also involved in several experimental schemes in the field of solar and wind energy. 44. As of end-1982, STEG had a total staff of about 6,700 of which 17 percent were professional, 60 percent skilled technical and administrative and the remainder unskilled staff. STEG recruits most of its professional technical staff among graduates of the National Polytechnical School. A company-owned training center offers basic training and updating courses to middle-and lower-level personnel. The Bank assisted STEG in meeting its training requirements. Loans 815-TU-N and 1431-TUN financed training in accounting, inventory control, billing and data processing. Loan 2003-TUN is providing finance for equipment and tools used in the training center as well as for staff training abroad. The proposed project would continue this assistance. Assurances were obtained during negotiations that STEG would furnish to the Bank, for approval by November 30 of each year during project implementation, an outline of its training program for the following calendar year (Loan Agreement, Section 3.05 (b)). 45. STEG's operations are managed from the head office in Tunis which provides technical support, supervision and coordination to the staff in 27 operational districts. Each district operates and maintains the system in its jurisdiction, performs surveys and prepares the detailed engineering of new distribution projects, supervises contractors, conducts meter readings and distributes electricity bills. While STEG's present organization is adequate for meeting its tasks, a further strengthening of its decentralized structure is required. The company is taking satisfactory steps in this direction. 46. STEG's Financial Performance. STEG relies heavily on internally- generated funds and external borrowing to finance its investment program. During 1977 through 1982, self-financing (including customers' contributions) and borrowing (from both concessionary and commercial foreign sources) contributed each about 40 percent of the company's capital expenditures which totalled about $600 million during this period. The Government financed about 12 percent of the investment program, either through support of the rural electrification program or capital increases. This is a very satisfactory position by comparison with other countries in the region. Existing covenants under Loan 2003-TUN established a debt service coverage by net revenues of at - 13 - least 1.5 times and accounts receivable equivalent to no more than 90 days of sales. STEG has, since 1981, met its debt service covenant, and is expected to meet it over the next few years. At the same time, accounts receivable decreased substantially over the past few years and are now close to a level acceptable under the existing agreement with the Bank. 47. Loan 2003-TUN also established that STEG achieve a rate of return on revalued net assets -^ at least 8 percent. except in years when petroleum product prices increase by at least 20 percent, in which a minimum rate of return of 6 percent would be acceptable. However, the reduction in the growth of electricity sales in 1982 (para. 38), as well as the absence of any increases in electricity tariffs in 1983, decreased the rate of return on net assets in 1983 to about 6 percent, which, since petroleum product prices did not increase in that year, is below the minimum level agreed with the Bank. In 1984, a tariff increase of about 10 percent effective June 1, 1984, will allow a rate of return of about 5 percent. Civen the economic and social considerations affecting the timing of electricity rate increases, it is recommended that the Bank accept the lower rates of return for 1983 and 1984. To ensure STEG's financial viability, assurances were obtained during negotiations on the implementation of a financial action plan (Loan Agreement, Sector 5.07 (a) and Guarantee Agreement, Section 3_05 (a)). In this context, the Government and STEG confirmed the following measures to deal with STEG's cash-flow problems in 1984: (i) increasing STEG's equity capital by a Government contribution of TD3 million to finance investments in electricity operations; (ii) rescheduling TD4.1 million of STEG's debt service payments due to the Government; (iii) postponing TD3 million of planned investments to later years; (iv) limiting increases in STEG's salary bill to TDZ million (or 8 percent above the 1983 salary bill); and (v) additional long-term borrowing from local development banks of about TD8 million. 48. Assurances were also obtained on a realistic schedule for complying with the previous rate of return covenant, by setting a minimum rate of returr of 5 percent each in 1985 and 1986, 7 percent in 1987 and 8 percent thereafter (Loan Agreement, Section 5.04 (a) . The provisions under the existing (Third Power Project) Loan Agreement were modified accordingly (Loan Agreement, Section 8.01). The Government confirmed to the Bank that it would consider introducing, by July 1985, measures to comply with the agreed return on assets for that year. By June 30, 1986, STEG would review with the Government and the Bank its financial projections for 1987-91 to determine whether or not the financial obiectives, including the minimum rate of return, remain appropriate (Loan Agreement, Section 5.07 (b) and Guarantee Agreement, Section 3.05 (b)). Furthermore, assurances were obtained from STEG during negotiations that it would submit by October 31 of each year to the Government and the Bank a forecast showing the expected rate of return for the current and the following years and the assumptions on which the computations are based, together with a statement of any action which STEG intends to take to achieve its financial objectives (Loan Agreement, Section 5.04 (c)). Assurances were received from the Government that it would, based on STEG's forecasts, furnish to the Bank by December 31 of each year, starting in 1985. a program of actions, including tariff adjustments, which it will take to help STEG achieve its financial objectives, and subsequently implement such actions (Guarantee Agreement, Section 3.02). As regards STEG's receivables management, the Tunisian delegation informed the Bank during negotiations that STEG intended to finalize agreements with all municipalities on a rescheduling of their electricity arrears debts by the end of 1984. To facilitate the payment by - 14 - municipalities of their future electricity bills, a proposal is presently being considered by Government to extend the coverage of a municipal surtax levied on electricity sales and collected by STEG on behalf of the municipalities together with electricity bills, in order to apply it also to medium and high-voltage consumers. To encourage a tighter receivables management, assurances were obtained from STEG during negotiations that the ceiling for receivables would be maintained at 90 days of the average sales of electricity over the previous twelve months. The definition of accounts receivable was clarified by explicitly defining "receivables" as all billed receivables (whether or not payment is overdue) and by including arrears which were rescheduled by agreement (Loan Agreement, Section 5.06). 49. Proiect Obiectives. The proposed project aims at extending electricity service in rural areas and improving the quality of service to urban customers. It will connect to the national grid about 35,000 new domestic customers, 1,500 pumping stations and 50 commercial and small industrial consumers in about 700 villages and improve the quality of electricity service to about 130,000 existing customers in about 60 cities. In addition, the project will help improve STEG's operational efficiency by reducing system losses, strengthen its technical competence by providing tools, equipment and training and assist in rationalizing energy pricing. 50. Project Description. The proposed project, a continuation of the Third Power project (Ln 2003-TUN), would support STEG's 1985-87 investment program for the development of rural and urban distribution systems. It comprises the following components: (i} Rural Electrification. About 1,400 km of medium-voltage lines and 1,600 km of low-voltage lines would be erected and transformers of about 25-LMVA capacity wuuld be installed. (ii) Urban Rehabilitation. About 1,100 km of medium-voltage lines and 1,000 km of low voltage lines would be erected and 400 transformers of about 40-MVA caFacity would be installed. (iii) Equipment, Tools and Training. Construction, erection and testing equipment, vehicles, and tools as well as training (about 70 persons for a total of about 120 staff-months) would be provided to facilitate the implementation of the project and improve STEG's technical capabilities. 51. Project Cost and Financing Plan. The total cost of the project is estimated at $82.9 million of which $38.6 million in foreign exchange. These costs include about $6.5 million of taxes and customs duties. The base-cost estimates are expressed in end-1983 prices. Due to the dispersion of the project works, the project costs contain 20 percent of physical contingencies on the base cost of the rural and urban components of the project. No physical contingencies have been included for purchases of project equipment, tools and training. Price contingencies have been calculated at 9 percent for 1984 and 8 percent per year for 1985 through 1988 for local costs, and 7.5 percent for 1984, 7 percent for 1985 and 6 percent each for 1986 through 1988 for foreign costs. Training abroad is estimated at about $3500 per staff-month. The proposed Bank loan to STEG of $38.7 million would finance the foreign exchange cost of the project and the front-end fee of $96,509. STEG would cover the interest rate and the foreign exchange risks on the - 15 - loan. The local costs would be covered through STEG's internal cash generation ($24.0 million), customers'contributions ($1.7 million) and the Government's contribution of 60 percent to the investment cost of the rural electrification component ($18.6 million). 52. Project Implementation. The project will be implemented over four and or.e-half years (1984 through mid-1988). STEG would be responsible for project implementation. Basic designs for the distribution facilities, technical specifications for equipment and materials, and basic bidding documents are already available from previous works financed under the Third Power project. STEG's district offices have started detailed engineering design work including topographic surveys. Preparation of detailed engineering design and tender documents for the procurement of goods and works that would be implemented in 1985 would take place through 1984 and continue thereafter for the subsequent implementation years. Assurances were obtained from STEG at negotiations that it would submit to the Bank for approval by November 30 of each year, a list of villages for which electricity service would be provided during the following year, together with the related financing plans (Loan Agreement, Section 3.05 (a)). 53. Procurement and Disbursement. Contracts for the supply of goods would be awarded on the basis of international competitive bidding in accordance with Bank guidelines at an estimated total value of $49.5 million and shall be grouped to the extent possible. Since local manufacturers are expected to bid for about 40 percent of the distribution equipment and materials, they would benefit from a preference margin in bid comparisons of up to 15 percent of the c.i.f. price cf imported goods or the customs duty, whichever is less. Limited international tendering according to Bank guidelines would be allowed for small quantities of goods, not exceeding $200,000 per contract and $700,000 in the aggregate. Bidding documents for all contracts exceeding $500,000 would be subject to Bank approval before tendering. Meters and poles estimated to cost $4.3 million and not financed by the Bank would be purchased locally through directly-negotiated contracts. Contracts for installation, erection and civil works estimated to total $18.0 million and not financed by the Bank would be awarded on the basis of STEG's local competitive bidding procedures, through direct negotiations with contractors, or whenever work on live lines for urban rehabilitation is involved (estimated to cost $4.5 million) by STEG's own staff. Due to the geographical dispersion of project works, individual installation, erection and civil works contracts would be small (up to $100,000) and are unlikely to attract foreign companies. The proposed Bank loan would be disbursed against (i) 100 percent of foreign expenditures of directly imported goods and 80 percent of local expenditures of locally manufactured or purchased goods; (ii) 100 percent of foreign expenditures for overseas training; and (iii) the front-end fee on the Bank loan. The Closing Date of the loan would be December 31, 1988, six months after the estimated completion date of the project. - 16 - Summary of Proposed Procurement Plans /L (US$ million) Procurement Method Total Proiect Component ICB LIT LCB Other Cost Electrical plant materials 33.2 0.4 - 4.3 37.9 (25.2) (0.3) - - (25.5) Installation and erection - - 12.6 5.4 /2 18.0 Engineering, construction - - - 10.0 /3 10.0 supervision Equipment, tools 16.3 0.3 - 0.4 16.9 and training (12.5) (0.2) - (0.4) (13.1) 49.5 0.7 12.6 20.1 82.9 (37.7) (0.5) - (0.4) (38.6) 11 Figures in parentheses are the respective amounts financed by the Bank, frond-end fee excluded. /2 Force account, and negotiated contracts. 13 Force account. 54. Auditing and Monitoring. Under Loan 2003-TUN, STEG's financial statements are to be audited by independent auditors acceptable to the Bank and submitted within five months after the end of each fiscal year. While STEG has used acceptable procedures to select auditors, the preparation of financial accounts and submission of audit reports has frequently been delayed, mainly due to delays in obtaining data from decentralized reporting units and bottlenecks with STEG's computer system. Although these difficulties are now being resolved, a slightly longer period for submission of audited accounts, of six months after the end of each fiscal year, was agreed upon during negotiations and the existing (Third Power Project) Loan Agreement was modified accordingly (Loan Agreement, Sections 5.02 (b) and 8.02). 55. STEG improved its management information system recently through the acquisition of new computer equipment. This replaced and expanded the previous system which had been in use since 1974 and had become largely inadequate and outdated. In addition, STEG recently started a program to improve its operating efficiency and its data collection and evaluation methods, and to reduce system losses. This program was discussed during negotiations and an understanding was reached on further progress. Progress would be monitored by a system of indicators relating to productivity and efficiency of the company's operations, and against an agreed timetable for the introduction of improved data collection and evaluation methods. These would help the company refine its electricity demand forecasts and investment planning capability. - 17 - 56. Environmental Aspects. The project would have no adverse environ- mental impact. Possible adverse aesthetic effects would be kept to a minimum by suitable routing of overhead lines. 57. Benefits and Risks. The project would help STEG meet the Government's objectives of extending electricity service in rural areas and improving the quality of service in urban areas. As principal alternatives in achieving this objective in rural areas, STEG has considered providing service through isolated generating stations or through connecting consumers to the main grid. The latter proved to be the least-cost solution. Benefits associated with the rural component include those reflected by incremental revenues from the sale of electricity and connection and meter charges, and the net fuel savings to consumers. For the urban rehabilitation component, in addition to quantifiable benefits, such as incremental sales attributable to the expansion of the system, unquantifiable benefits are the increased reliability of supply, and a reduction in system losses. In view of the importance of unquantifiable benefits for the urban component, and the major share of the urban component in the project, no economic rate of return (ERR) was estimated for the project. However, the ERR on STEG's overall investment program of which this project is an essential part, is estimated at 12 percent and thus above the opportunity cost of capital in Tunisia, estimated at 10 percent. The project presents no special risks. PART V - LEGAL INSTRUMENTS AND AUTHORITY 58. The draft Loan Agreement between Societe Tunisienne de l'Electricite et du Gaz (STEG) and the Bank, the draft Guarantee Agreement between the Republic of Tunisia and the Bank and the Report of the Committee provided in Article III, Section 4 (iii) of the Articles of Agreement are being distributed separately to the Executive Directors. Special conditions of the project are listed in Section III of Annex III. Through Sections 8.01, 8.02 and 8.03 of the Loan Agreement, the requirements of Sections 5.04, 5.02(b) and 5.08 of the Loan Agreement supersede the provisions of Sections 5.05, 5.02(ii) and 5.04, respectively, of the Loan Agreement between the Bank and STEG of July 15, 1981 (Loan 2003-TUN, Third Power project). Through Sections 4.01 and 4.02 of the Guarantee Agreement, the requirements of Sections 3.03 and 3.06 of the Guarantee Agreement supersede the provisions of Sections 3.04 and 3.02(b), respectively, of the Guarantee Agreement between the Bank and the Government of Tunisia of July 15, 1981 (Loan 2003-TUN, Third Power project). 59. I am satisfied that the proposed loan would comply with the Articles of Agreement of the Bank. PART VI - RECOMMENDATION 60. I recommend that the Executive Directors approve the proposed loan. A. W. Clausen President Attachments June 4, 1984 tWashington, D. C. - 18 - ANNEX I TuLl a Page 1 of 6 1|sun - macia umicas sar mr 53153A uiFthiMS63 (W9IQM&u AVl3ACB) la u96 (MS 60W? LSrELAZ) lb - lb lb KIDIE tiCADE Name TNCam t9udltk 1970- ESTYISfl- S. AfttCA & AID CAST LAT. AttICA & C*tt TOTAL IG3.6 163.6 1U.6. a.-cuz ua, 69.6 70.3 72.3 a 0cta Con) 210.0 370.0 * 20t L340-0 00Z.S2 al= aimopm a Caur (KILOGRAQ OF0 C FL WMVALEIT) 173.0 3M1.0 652.0 610.4 L407.b FUIUSIDi BE WITSL lufanbc POIVL&TIOUm "D-U (5W0SA1SU 42231.0 3127-0 352O.0 EiAm POPMALrnW CZ 0, TOTAL) 36.0 43.3 32.9 47.4 63.3 POPULATION PROJECTIONIS POFULATEOd US TA Z000 tMLL) W10. SrTATEOMAY FOPULATEI (stud L9.5 YEA SrATXOKAY FOP PO E 2110 POFUtIATIOsF DENISITY KE SQ. 10. 25.8 31.3 38.9 36.0 35., PE SQ. M. AGI. LAND 60.1 72.9 67. 449.0 93. . POgPULAIO ACE SYjCTUUE CZ) O-14 YRS 43.4 46.2 40.7 43.9 40.1 15-4 YRS 5Z.5 50.0 55.6 52.3 55.8 65 AXED ABOVE *.2 ] 3.3 3.7 3.3 4.1 POPULATION GROWTH RAtE (2) rota LI/c 1.9/c L2/c 2.9 2.3 tIRA 1. 3.( 4.0 4.6 3.7 CRUDE BLATl RATE (PEA TIOUS) 48.9 40.6 34.2 42.3 31.E CRUOE DEAlt RATE (PER TIWUS) 2L.0 14.6 9.1 12.0 6.1 GROSS iLEPROVUCTION 1ATE 3.5 3.2 2.5 3.0 7. 0 FANILY PLACNINC ACCEP-ORS. ANAlUAL (THMOS) . 29.2 160.9 USERS C: OF MAtAED SOlE) . 10.0 21.3 IVDEX OF FOWD PROD PER CAPITA (1969-71-100) 97.0 96.0 127.0 97.5 113.0 PER CaPlA StUPFLY OF CALORIES CZ OF REqUIRMENTSS) d3.0 86.0 l16.O OZ.3 111.3 PROTEINS (CRAIS PER DY) 5Z.0 57.0 74.0 72.0 67.9 OF UNICA ANYIAL AID PULSE 13.0 14.0 23.0/d 17.8 34_1 CHILD (ACES 1-4) DEATH RATE 316. 24.5 9.1 15.2 S.3 ILDU LIFE EXPECT. AT *IRT7 (YEARS) .8.1 54.2 60.6 57.2 4.b INFANT NOR.- RATE (PER T-OUS) 15R49 131_3 87_b 104.2 *2_b ACCESS TO SAFE ;ATUE (-ZOP) TO-AL 4. 9.0 61.01e f 59.1 b4.a RBAN .. .. 97.0t 84.9 77.8 RURAL -. 5-0 J - 5 44.3 ACCESS ;D) EXCRETA DISPIISAL (: OF POPULATIUN) TO-TAL 62.0 . . 54.b LRAh . . 100.0 42.01 -. 69.6 RLRAL .. 34.0 .. .. Z9.8 POPULATION PER PHYSICIAN 100130.0 5930.0 3690.0 1536.0 1776.0 POP. EElt NURSING PERSON .. 730.0 £90.U 120.7 L012.Z POP. PER dOSPITAL BED IOTAL 4LO.0 410.0 460.0 043.3 ;77.0 URBAN 230-OiL 310.0 350.0/h 5S.d b67.S RURAL 1040.0!L 1270.0 1lO/01% 24fZ_0 1921.b ADm1SSIOMS PEE ioSPITA LEO .. 24.1 15.0/b 2b.4 27.Z AVERACE SIZE OF HOUSEdIULD TOTAL .. 5.1,1 5.5L- -- CRLWY _. 5.1/1 5.51 RURAL s. t7l1 5.6. AVERAGE sO. or PERSOKSIROOM TOTAL .. 3.2/i 3.1.l uRBAN .. 2.77 2.6 . RURAL .. 3.67 3.6... ACCESS TO ELECT. CZ OF DIWELLINGCS) TOTAL Z J4.0/21 46.2 RURBA 68.2 77.6 RURAL .. .6.0 16.1 _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ -19 - ANNEX I T ASL 34 Page 2 of 6 TIUI1SI - SOCIL DICATUS DTA SHEET SUNISIA inn~~umwa cusps (wuKIO AVERAGE) in mosT (ST USCErN EsrTIZ) lb 1960b 197db REST. ! MIDDLE. na taor MT >6 ESTIN&L16 M. AMICA &. MU EAST LA?. DKUXCA & CWall ADJUSTED CiROLLJENTr IATtOS PRINIY: YBYAL 6h.0 101.0 103.0 89.4 105.0 UUAE 8a80 12t.0 t11S0 104.8 10o.3 FELALE ;3.0 80.0 88.0 72.4 103.6 SECONDARY: TOTAL 12.0 23.0 27.0 *1.7 40.0 SALE 19.0 33.0 34.0 5.8 36.6 FEMLE 5.0 L13.0 20.0 31.2 41.2 VOCATIONAL (C OF SECtlDUAY) Z3.5 11.1 27.3 10.3 34.0 PUPIL-TEACHER RATIO PRIMARY 6L.0 47.0 39.0 31.9 30.7 SECONDARY 16.0 28.0 20.0 Z3.3 16.7 ADULr LITERACY RATE (2) 15S5 14_0It 62.0 43.3 79.5 PASSENGER CAiJSTHOUSA2iD POP 10.5 13.0 18.3tl 18.0 45.6 RADIO RECEIVERSITHOUlSASID POP 40-3 75.7 157_0 138.1 228.2 TV RECEIVeRsITTWoIsa POr 0.1 14.0 47.1 45.6 106.3 SEWSPAPER (-DAILY GENERAL tI.EREST.) CIRCULATION PER THOUSAND POPULATION L8.6 15.9 43.6 31.0 64.1 CINEMA ANNUAL XrTSDOACEICAPITA 1.6 .. 1.SJd 1.7 2.9 0-.AL LABOR FORCE (rAOGS) L138.0 1215.0 1693.0 FEMALE tPERCLSTJ 6.0 7.7 8.4 10.7 Z4.6 AG&ICULTUgE (PERCENT] 5b.0 50.0 35.0 42.5 31.3 INDUSTRY (PERCENr) 18.0 21.0 32.0 2T.8 23.9 PARTICIPATIJN UTE (PENCE4T) TOTAL Z7.0 23.7 25.9 25.6 31.3 MALE 50.2 46.2 46_9 454 4g98 FEMALE 3.3 3.6 4.4 5.6 14.8 ECONOMIC UEPENLE2CY RATIO 1_8 2.1 1.7 L.8 1.4 IACOIs DISTIDUTKOS PERCENT OF PRIVATE INCOME R CELVED AY IIIGNEST 5: OF HOUSEHOLDS .. .. 17 0f iItGdEST 20: OF USNOLDS .. .. A2.0L0 . LOWEST 20: OF HOUSEHOLDS _. o. LINES! 4O OF tIOUSEHOLDS .. ._ 15.0fl FOVEC? TARGET COUrPS CSTIATED ARSOLCTE POVERTY INCOME LEVEL (USS PER CAPITA) URBAN 0. ._ 24.01d Z76.1 289.8 RURAL .. .. 97.07d L77.1 184.5 £STIMATIU3 CEL.CVC;C felVR.Y LsCCU.E L:VLt- ;_S; eSX0.A :X 193_OId -00.0 519.8 193.0t7 281.3 172.1 ?i;.'.} OF. kIc.N_ul-)j>TE 20.01d 22.0 - L:RAL . S. i;.OId 30.8 .;a-T AVAILABLE VaT APPLICA8LE s j r E S Lu The grosp .uoeraRe tar .ach itdLaetor are pnpulation-weighted arithmetic eans. Coverage of countrtes anug the indicators depends an *-ail.billtv of data and is not uniform. !b Uonlss other.ise noa.,-. - Jata for 1960 refer to any year between 1959 and 1961: -Data for 1970 betrn 1969 OAn 1971; and at f.r 'ost 'ecent EstLrate between 1919 and L981. !e Due to esigration. ppu1latt: n ;roath rate I lo_cr than rate of nitur- ic-rease; /d 1977; Ic 1982; If Access to piped w-ter only: /; :9:: Yb 1916: /I 1966; 1 1975. Based on recent official sources, updated percentages of population having access tO safe water are: total (70.0). urbar (91.0). rural (46.0). These figures will be included in the next version of the social indicators data sheet. - 20 - ANNEX I cc111Y"U soctot. emte Erc Page 3 of 6 Of wlt.. t~ a.acetoellyCAA .....itecc diectt ...e a- r.tto t.P-C ee net htem O ..ofrlhe OPt. , . ofcAPlec.- -L.oeos.att.c.eectntt.Jctfcrec o...tctlc a-.. ~~~~~~~~: ... .. . . C ..... P_aO t l. LI ~ ~ ~ ~ ~ ~ I.cc.cc.. co m.o.rrac'.p f m refor.. TrOM%.. - . ,.d .I jeff t5 z9in dale. ~~~~~~~~~~~~~~~~~~~ ~~~Icotatc 1- too,-otem PDAtcco - ftp.t.eII- dit.ied by c rb..o oritict crcc coc.L cro=o,lth.jn0 rto~cftCc Peed, ocr.l'..oo-tl carl... thi.F!Tc tilt) COtP. Ocotteect .r-.beci tiC.t..- melt eric.. ect dcrit fOpelt-Rom Itc.! 00, Ie tiF-i. Rhi~i~- It tat a.ttioctittoc h cirect irc.. rttc. iiilihte10 y.httf000 etoirtbettO Ott.ycelRlO*Phtertot i .01,lOd Octt ROR I 1t 00L.1 ho -e toothf,.-. tt.yotc it'o. !.ofmttch It.... rotiCi trieccolto. taPi.R, OttloCi W%tThflZt'i PU tOfl?O - tthci ofracoet cohcoertteet of tc.-ftcot cit etot ctotcrc cot fot..oehtty itoffod em, * pd - cLclic.(dcet ty a,cA cec- y.i.ct *tc.c,haRcr Roeo Der O.. cJt1ro ccc 10,4 hdr. ;.-I.tlc.r...croh .....et.... .c.1 hc tfocc-o Ie cmta e tint.. ftoo~~~C_.. .. 1 Lcr,t tle'fhot. -.I.. L*.tet. CP t.LLdd1 ttE P.,-htoRene PthtlC-tto. 'art 0. rate. cng c..trece tib, ROl, cd til det, roti. 'eh oftoc.moi Itococtcot oatc. tt -, total 'trc. tiria P.0 ecpRatcO ye- oco L, -,dot ChoIr Ltreotey ec forhllt nr Oocoot*c catcoc LIAro. reect. Ceoeeeee pet..icct for erettty .00c cohere.. f chrcc hot... c..chc of rcc.ae crenctoha. oco"n. iL;ccii" eeo..` o.,eht 1ir~Rc ci.sltO It!. ctchie at L.rt III cc. t eCho - cc1.atf cot of -ctocc t it;! L;b.' ot rto1 htoec a-cotoe nicre h iior c h ttlIN.oh .1cc c-co hhto INo. ronOeott-c rct ee.fl.ctt.tce R fcetle eorrec o Rooc Icelac cot eeto ccccE-1tccrtt- lto ceo a ttc ao.trbo t oo tttoctir. cocottc cototicte - The. to ccttcoct cclr ocr.. forettery ratoi .t~~~~~~~~~~~~~~~~~~oce.t t).rctencor hot.h.:eoc t.cI.c ecefo rftac.rohIce of.0t ot rrrioctcctal, cooyctar.cchol- te.I Let.ac-fctt.-,rae dol. tleactfe-aL iiO tocetottOoW rclec ted cocic ¶0 he Itta, ocI 'ecooc01 ae.itti' ce.c to. cc =ocoootecor-cretto otfotoNoD. I 11-yo ett .to cOo bo.4-.t ofrh cat 0cot-atc- fca,cIcl-a tceottnc ori L-1 ec 1tte chitrtico mi b-LI Ic tt f.tcet-aite t tw oo 12O.ac te et o tctc o ..r b. .toec Lt tffI.ot- -t.Fh of; -primary tiate;fa Octli. rie'tO.acotI.. caco -ctct.-elcre~... Itttcrrlco o cactct- toIt.tLr.c Trt hctcic optet.c crihi 0 ttor a-t.cttccetar lnt, e- eIc-l r o. raooteotot etec toftltetimi olco caCtI he escoet. Sctoitato.cO.ee -ttret, 'ccIo o5 fotalo - ..ro... oc.ibo.....i1cddot rooc:ata.c heoetc cdtit Roctcc.tre at toct for .arc efaercoot rre.ir Ro"trrt itO Pet oc. -- cetteceforol 10cc - Ccecccot cc ohooc f er torte.1 totot lice aee.relty octiotof.~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~I-7-.1 ,..ItetM tcci.e.rct C0eccM.e-'.11h h t.. b..ccf tRdoccRt occlcte occ -tot ;totcc.:c otho Croef1 a c... ctA. oo dt eo.ot- t ac,eAP,trtO)fa.cdeer ofyc.te f ettc ii r tetort-oot of1 cocotor ic.hteetoIc fc,pc11rtcc tO-l tiir o-at) AI,it fac. pcel-cotccrach- rlcyo ct ecetro- -to oodcl crct. fortlortec cc els-c th-C itRTl. 0 1;1C.rtftg f oa it rircloch ot oCt Rfareac L hccr. d pcfotaetwc; RObO. ROil. act ROIl titt. cat. tocteo --,.,. 'I licc: thAn ctmbtA ..r.e I.c. ce eaaoe ho... Z,ct icc. ertocRw tlo-ceio cietcc tOtom" cc F ic....11 rwctoechitthitO ha Lral etciotr citttf 1w-yolei PpLctccr o dmi -.rcC .I C-t-i- lcoe(ottece 'ooyta T..i - oIl Pyi ec, recoecr I cti ercorie. ,iYt, 19 ~ A hecter f. rrfoe.n rt..dlettct- TV IccotofrOciehe oty1 PO,rl-fl_O Kc-eCMo.oicc...oy. p.Zi..c:.rlc. LI. cfO..catO- t..,0 ' caf,.-0c. o.ah' t*" . t 1..'t'I.eoc mtco ocw.d:eda olt. Pt otecottorec.faef..e.r'e-.cRt.f-!:~;- - I-aL' - f - ..'f.. . - ...... e elamniaEc.. tonot. .rodo-*to '0 t. foot acete lt. ytce.ct tooecci-cc erf te c tey If-eajwfo -.bit fio -ot e Pei. . . tat toneto..cyl. oy ilortoc tr. 1tctofrc .oreoo ortt re'?fIWrrCt tcoando c- Eottaloaet ccrO.1Jb Aeoltlt it.c Ie'doooolh cfn to tp . celceRetotore ilap. r L9cicoyced. bcC ettn ecirt htht.eo,trrc .ooocctttcc aecot to toed tceecolo . o lice.. DA Wt-tihoccc tEt tecctC- ot tat. .oc.. oc i. rcotoe at eta Caorfcc M.ct'.e c.t-tec b A ii cpylltct ot o onltVt-otferotC-'ac ret frla ooro oeo e ic Cet Ic .thc Cecclc.ctcALL cptaoe crocat.CIheta othit OtttCbo tt:te. lP.fmLCVt lOt toto. too ot cottecccbonoc of afotiric. cd etcctct Ittechfc.ae cccnfec't - tat- tc to:eole. -cctie.- -Coocactrlc cleoctc fitocec~ftta tobi ct otot O rec fcoeo cd ttctdt.o -otol, aCd to fec-c toretec cc- bz-t.rcttlo t'ole feeco. f dtchI? Pci. etool ho totcat Fccl. Tcate.tc,attn oo O. aeitto tr ctc lt Oc icttei r Coo7 t,rco7C7 rc o oe rt Ita.4..,aoc eecocaeett,,tco p c.- W---Cit . oct Rtc- e.. P-c.,J of dtelc0.10 tcc c.ctcao tcr . cerlt;2%. I.cre. td ta cco o,oce.o r fi oe.le.re tot .Itto r ft .. otoft.tti eat, ol1 a-%.yoe orl fcc c tital tohd 1ott.1. = = QIp7 pt)-lb..dr tote. tiCCyft_`U _r . ttAd.bhitt Obtt tiic ttt t-el o:cOcocoOcoo7 t - ..ttot.d -tee-dtoFtetoec Prta- tt...feo to- rce octccitt -1 Cc Ic hopcLac a _ ch - -r.0 hlte oOI air tre_..at foIech..ociI er -e. tt 0- ';ccrt foa%rot zh rtcot. ac ec.cecrtee ctioctttat fieo ceteto OroRCceal t; tto 1070ao lOOt dotc. OtfeI.-h-b- Macto ro-cto¶00 toL, ccaa -c t-1c1--Otottoo;lmo,d d0ac ee ata"tccee oicy eeZliR=otee ecL Rte......0hoccto ccc f .f Wee feree o eeotlccl- ort urb..0. cmct corh ati bycit. .ct..taCoctc lot ot-tctccrocrn . t taber OC coerti thotot, arboc, act retaIl .0th re.ewoamto acceec it ncr atfcrdohlt - 21 - NUZ I Pq 4 of 6 nmm - Sc DUC MM= P4p1lation: b.5 uillion (id-1981) GUP per Capita.: 1,423 (1981) Ama! Gnwi Iau howft (at M9D rmm) (milawon Us Pc tsku Kati;A PWitewd Ltiicato at currnt pnces) lYZ 1977 1978 1979 19W 1961 1982 D13 1964 1915 1986 Grow dometic pco.8t L/ 7,905.9 5.3 7.1 7.1 6.0 5.0 1.5 4.5 6.0 5.8 5.6 AgricuLture 1,W5.6 -1W.2 4.5 -4j 6.1 6.6 -6.7 0.5 4.0 3.9 3.7 ltmtay 2,4dS.0 9.8 9.0 IL9 9.9 1.6 0.0 6.9 7.3 7.0 6.7 Seviceg 3,370.7 5.6 7.4 8.7 3.9 8.3 4.9 3.9 6.1 5.9 5.7 tansimptim 6,297.6 1U.4 5.8 4.6 9.9 7.2 4.7 4.9 7.3 6.2 3.9 Gmnu iumnatzm 2,370.1 6.9 12.9 3.9 5.8 14.5 -3.7 4.3 1.2 1.0 1.8 Ec of gmds ani WS 2,903.3 5.5 8.2 23.3 0.7 3.0 -6.5 4.2 7.2 8.3 13.7 Tapos of goods aid WFS 3,665.1 16.7 9.6 14.3 7.2 13.0 -3.2 -1.2 6.3 5.9 7.4 Gzos nzuti pl probt 7,948.2 5.8 7.9 7.5 6.5 5.2 1.6 4.2 5.9 5.6 5.3 GCmu nctionl aizs 1,65U.6 -7.2 14.8 21.8 -7.2 -1.1 -10.8 -5.4 0.5 3.1 11.5 PRICES GDP deflat 76.0 80.1 88.3 100.0 110.9 124.9 140.5 EzduzU rate 2.33 2.40 2.46 247 2.03 1.69 L47 Sham of CDP at _4rat price (2) Avwap Amml Icrem (2) (aC cit pni) (at coant ) 1971 1976 1D81 1982 1986 1991 1971-76 197641 19386 1986191 Gm usCic product 1/ 100.0 2W.0 200.0 w1.0 100.0 2o0.0 o.8 6.0 5.3 4.9 Agri.cultzur U1.8 18.1 13.6 12.7 U2.5 11.7 8.2 0.4 2.7 3.5 IzrAztry 20.6 25.9 32.1 31.4 30.9 32.2 10.2 7.8 5.7 5.8 Services 47.7 42.9 41.3 42.6 43.6 43.9 8.3 7.2 5.8 5.1 Comaqzioo 82.1 77.5 76.8 79.7 81.5 78.4 9.6 7.5 5.6 3.8 Grns ivestment 20.0 30.4 32.2 30.0 25.9 25.5 14.1 8.6 0.6 4.2 Exportx of goods ad NFS 23.8 29.1 42.1 36.7 41.4 41.3 5.6 7.9 8.2 6.3 Iqix=ts of goods and NFS 25.8 37.1 5l.l 46.4 48.9 45.1 13.1 I.1 5.6 4.0 Gross national proiCt 99.6 98.7 00.9 100.5 99.6 99.2 d.5 6.5 5.4 4.9 ;et factor ircm -0.4 -1.3 0.9 0.5 -0.4 -0.8 - - - - Gross natijmal savings 17.b 21.1 24.1 20.9 18.U 20.8 2.9 3.4 2.9 8.8 As 2 of GDP (at cmrtnt ce.) 1971 1976 1981 1982 PUBLIC FIIIAE Current evue 21.4 24.2 30.0 32.6 Current iezure 18.9 18.5 22.4 24.9 Surplus (*) or deficit (-) 2.5 5.7 7.5 7.6 Capital expemittuz 6.9 11.4 9.2 9.d ' Foreyp fiuQcir 3.2 1.7 1.4 1.9 1971-76 1976-8t 1981-d6 1986-91 011w. DIDICAIBS CM2 growud rate (Z) 8.4 6.5 5.0 4.9 GNP per capita gmwth rate (2) 5.4 3.1 2.7 2.3 ICDR 2.7 5.4 6.0 5.4 Mzginsl sainj rate 24.0 2b.0 12.2 24.4 mport elasticity 1.51 2.02 1.06 0.82 /1 CDP at Nrket prices mid caltSmns at factor cort. EM CP II-C %UV 19&. - 22 - AI I page 5 of 6 iql:o 6 5 Li 1981 GMP per Cap: $1.4Z21 (L9W AmlGui 7a)e -__ cat WE Prices) IzraC" at aza Prs DM2 1977 1978 1979 198D 1981 1Z 1983 I91 19 1986 Mflardz ise ors L99.2 9.7 9.6 2017 0.8 3_3 4.6 8.0 7.1 8.8 16..U CMl oil Ib6- 12_ 4 124 124 0.2 -_8 -2.4 8.4 -L 1 O.I FPim-. 97.3 4.9 -15.7 25.1 -11.9 -0 -17.9 -Z.7 8.3 8.2 8.2 lbrm ,,ctuzes 1.I25.1 6.6 10.4 33.3 3.6 20.3 15.2 8.6 14.1 13.2 26_3 23 _xdaa~ize i~s 3.263.9 14.1 10.7 15. 7.7 9.5 -5.5 -L.L 6.1 5.6 7.7 Fo obd.4 9.6 7.7 39.6 -6.8 143 -5.0 9.1 2. 5.3 5.0 P?eloem 383.1 13.8 15.1 9.7 13.5 4.9 -34.7 4.4 11_3 82 21.7 2/ Aed2ily a-A _a bv6 5.5 15.4 -2.6 -4.4 4.1 -2.4 -11.1 -0_7 0.0 0.0 oqs 1ehb69 21.6 6.5 2k9 15B 0.0 5.6 18.2 7.8 7.0 5.6 Price IAc E;mt jWice iW= 54.6 56.7 75.5 10.0 17.4 122.9 122.7 1.9 14L9 151.9 t price io_ 72.b 76.6 d5.3 1D0.0 4.4 12LZ 131.8 143.3 155.5 167.4 Term of trade ime 75.5 76.6 .5 10.0 102.6 1OL4 93.1 92.0 91.3 90.7 o.ioirx of ir=.dse Traid (Z) eacage Am1 1rease (M) (at cregar prices) (at ccscrat prices) 197L 1Y76 B9l 1962 96 1991 1971-76 197"1 1981-66 15S691 Exps 1M30.0 10.0 100.0 DIUAO W0.0 1OO.0 4.1 8.6 10.2 5.7 Cet Oil 24-5 .a09 51.5 43.6 34.1 28J7 4.6 5.8 1.2 0.1 Oes pcimz 19.2 13.4 5.0 4.9 4.4 4.3 -5.4 -1.9 12.7 5.1 1it-fures 564 45.7 43.5 51.5 61.5 67.0 6.4 14.1 17.6 8.1 Lwzts lU0.0 1MA0.0 100.U 0. 0.0 100.0 U3.1 11.5 5.5 3-9 Food 2LZ L.3 1 1.2 11.3 10.1 6.3 0.6 11.9 2.6 -53 2ecole 3.9 [1. 19.0 IL; 22.7 30.6 23.2 1W.9 9.7 8 S nbdumary an Equipar 30.1 J319 2 5.2 5 124d 13.5 8. -LI -1.0 Otrmers 4&:i 41:.44 -. J .t 51.1 49.h 50.3 W_b 13.5 7.6 4.d3 Sure of Trade wix Lh mae of rrae ich gre of Trade wim atare of Trade wi3 i imlasria1 COztries (Z) De-e_____________ Irial Cri75 (:) gr in Ccuies (Z) E s (Z) Gentrallv Plaxud Caniries (7 ) 197U __75 ____ VW 39i 159 _ 1970 L975 1980 OnD=Di OF 1N£ > Exits 70.8 60.1 68.7 -.9 21.7 25.4 13.9 11-1 4.8 9.4 6.1 0-4 li~ts _859 79.5 614 7.1 10.9 7.7 0.7 o63 7.5 6.3 3.1 3.0 1/ Constant price data at 1980 prces. 21 tixrase in refiixg capaity. DM C?2C ;V L%41 -23 - Aef MAZ r m=am= Gdn C .na oavm Papai 6iswn S 3- GP pe Cai SL,AM CO ISL a n so on D91 mm C {T; D r3e- r~~~~~1 30 . sc< %CZPfU -7': ~~~~~~~~~~~~~~~~~~~~~ ~~~GAS PtIELUNES r , I - cr w.c s - o OR GAS FIELDS / / - O { X le!" MAX MUM IrMv. D _,Dessc* j '} .~ OfldO J5tL DISTRIC CENTERS I x_ // \ - - * NGOVERNORAE BOUAES A L G E R I A ) cj = . - e' T ,a p ot , Ser.f_ I_1 56 Becr-cf , > vW OF Jebel ~ /~ el-Uf _ 0-'c A sErErKN A Be, Le ks 'd - i A }~~ _ A;;0O -sc * _ rJ =~~' -'u. Se d. :wcc"c - XI_ _t _ S0 - X 3 z 'czo u e0 20 aU so VW 3~~~~~~~1 .'c oc lb HGuc su . )MILES IU NlS0Xro_ tCN~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~'L A~~~~~~~~IB