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PROJECT INFORMATION DOCUMENT (PID) 
CONCEPT STAGE 
Report No.
 57838 
 
Project Name 
TN-ENERGY EFFICIENCY AND BIOMASS 
Region 
MIDDLE EAST AND NORTH AFRICA 
Sector 
Energy Efficiency (60%) and Renewable energy (40%) 
Project ID 
P121364 
Borrower(s) 
Republic of Tunisia 
Implementing Agencies 
ANME (National Agency for Energy Management) and ANGed 
(National Agency for Waste Management) 
Environment Category 
[
]
A
[X] B   [ ] C   [ ] FI   [ ] TBD (to be determined) 
Date PID Prepared 
July 20, 2010 
Estimated Date of 
Appraisal Authorization 
January 21, 2011 
Estimated Date of Board 
Approval 
April 15, 2011 
1.  Key development issues and rationale for Bank involvement 
 
Tunisia holds an important position among developing countries when it comes to its energy management 
policy, having formulated and implemented a policy for rational use of energy and promotion of 
renewable and alternative energy sources as early as 1985. Tunisia’s engagement with the World Bank 
(WB) is strong, and the Government of Tunisia (GoT) considers the WB Group (WBG) as a key strategic 
and reliable partner which plays an important role in its development and hence has requested Bank 
support in a broad range of sectors and areas, two of which are promoting Energy Efficiency (EE) and 
Renewable Energies (RE).   
 
The Country evolved from being a net exporter of oil and gas in the 1970s and 1980s into a net energy 
importer by the late 1990s. Given administrated prices and high public subsidies to energy products 
(around US$1.1 billion in total or 110 US$/capita/year), public energy expenditures represent 10% of the 
total state budget, and negatively affect national economic competitiveness
1
,
as it diverts financial 
resources from investment that could make the economy more competitive. As a result, efficient use of 
energy and development of alternative sources remain key priorities to reduce fossil fuel dependency, as 
well as the energy intensity of the economy.  
 
The Government of Tunisia has thus initiated a policy to improve energy efficiency and increase the role 
of renewables:  the objectives are to reduce the energy intensity of the Tunisian economy by 3% per 
annum, to increase the contribution of renewables to 4% of primary energy demand, and to ensure 
significant energy savings by 2016
2
.
The 11th Development Plan (2007-11) also sets the broad directions 
of energy policy, including gradual reduction in energy subsidies, and calls for a scaling-up of investment 
in energy efficiency and renewable energy. In this context, energy efficiency efforts of the GoT have 
benefited from several sources of support over the years, particularly as related to Market Transformation 
and Labeling of Refrigerators (UNDP), Experimental Validation of Building Codes and Removal of 
Barriers to Their Adoption (UNDP), Credit Line for Environmental and Energy projects (Agence 
Française de Développement), Development of an Energy Efficiency Program for the Industrial 
Sector/PEEI (World Bank/GEF), and the recently approved Energy Efficiency/Cogeneration Credit Line 
to Commercial Banks Project (World Bank). 
1
ANME presentation for World Energy Council Forum, June 2009. 
2
4-year Energy Conservation Program (4ECP) for the period 2008-11 and Tunisian Solar Plan for the period 2010-
2016. 
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The proposed “Energy Efficiency and Biomass” Project (the proposed Project) is complementary to these 
previous WB EE projects (PEEI and EE/Cogeneration Credit Line). The US$55 million WB 
EE/Cogeneration Credit line was approved by the WB Board in June 2009 and made effective in February 
2010. It is intended to address the barriers to scaling-up EE/cogeneration investments, and expected to 
mobilize US$55 million of additional financing from subproject sponsors, commercial banks and the 
GoT, so that total investment under this project would reach an estimated US$110 million. The proposed 
Project will finance technical assistance to support this EE/Cogeneration Credit Line, and also assist the 
development of biomass potential in Tunisia. 
 
The Bank’s involvement into the proposed Project can be justified as follows: (i) it will reinforce the 
existing EE/Cogeneration Credit Line project through TA, and (ii) it will support a new type of 
cogeneration fuel, biomass. The proposed Project, including TA support to the WB Credit Line, will scale 
up the previous work in industry, and will seek to address areas not sufficiently covered by the previous 
activity, including biomass. So far, the industrial capacity building activities of the PEEI project have 
been successful and have generated a steady pipeline of good EE subprojects, including the subprojects 
that have already been approved for receiving the GEF investment grant, as well as a sizeable amount of 
new subprojects. 
 
The proposed Project is intended to support the efforts to manage energy demand and reduce carbon 
emissions, while developing the biomass potential as an alternative to conventional fossil fuels in 
Tunisia
3
.
It contributes to: (i) promotion of energy efficiency/cogeneration through facilitation to 
disbursement of existing WB EE/Cogeneration credit line to commercial banks, and (ii) development of 
biomass potential with implementation of a pilot project and capacity building activities through technical 
assistance, direct investment and capacity building.  
 
The EE Technical Assistance Component of the proposed Project was already considered during 
preparation of the Credit Line, but the allocation of GEF funds has been delayed and hence the TA has 
been included into the proposed EE and Biomass Project. This was not seen as a major issue in the short 
term, as existing capacity is already significant in Tunisia, but the proposed TA will be a key element to 
allow efficient and prompt disbursement of the Credit Line. 
 
Tunisia has a significant potential for energy recovery from biomass. Biomass production in the country 
was estimated at about 6 million tons/year in 2009: 2.2 million tonnes of household waste; 2.2 million 
tonnes from farms and agro-industry; 1 million tonne from olive oil processing; 400,000 tonnes from 
poultry droppings; and 200,000 tonnes from waste water treatment. The proposed Project’s biomass 
Component focuses on rural/agro-business production of biomass (farms and agro-industries, olive oil 
processing, poultry droppings), i.e. 3.6 million tonnes or 60% of the total biomass capacity in Tunisia
4
.
The proposed Project’s Biomass Components II (co-financing a Biomass power plant in a farm) and III 
(TA) are aimed at reinforcing existing capacity and providing analysis and knowledge on biomass in the 
country. 
 
2. Proposed objective(s) 
 
The proposed project
 
development objectives are to: (i) facilitate the disbursement of the existing energy 
efficiency credit line of US$55 million to three commercial banks; (ii) pilot biomass demonstration 
project in the rural/agro-business sector, and (iii) provide capacity building for biomass development in 
3
CPS for Tunisia for FY10-13, Report No. 50223 
–TUN. 
4
Strategy and Action Plan for Use of Biomass for Energy, MESD and ANGed, April 2010. 
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Tunisia. The proposed project is expected to contribute to Tunisia's higher level objectives of increasing 
energy efficiency and use of alternative energy sources, including biomass.  
 
3. Preliminary description 
 
The Proposed Project has four components: 
Component I: 
Capacity Building and Market Outreach for EE Credit Line
:
This component will 
support the WB EE/Cogeneration Credit Line Project (P104266 - approved by the Bank Board on June 
30, 2009) by providing (i) technical training and capacity building to the participating commercial banks 
and the ANME (National Agency for Energy Management) in the area of energy efficiency and 
cogeneration, including biomass generation/cogeneration; (ii) support to subproject developers in the 
industrial sectors to assist them in the preparation of required financial documents (financial studies and 
business plans), as well as to assist them during subproject implementation; and (iii) support for targeted 
awareness and training efforts. 
 
Component II: Pilot Biomass Power Plant:
 This component will support the co-financing of a biomass 
power plant selected by the Ministry of Environment and Sustainable Development (MESD) and 
approved by the World Bank. The selected project should provide an example (from reserves, technology 
and financing structure points of view), so as to encourage other financiers to participate in its funding in 
a
successful and timely manner. The beneficiary farm will be proposed by the MESD, based on a number 
of sustainability criteria such as availability of biomass resource reserve, economic and technical 
feasibility of the plant, and successful completion of social and environmental safeguards screening 
procedures. 
 
Component III: 
Biomass Feasibility Studies and Institutional & Capacity Building
:
The main purpose 
of this Component is to (i) finance detailed business plans and execution studies and preparation of 
request for funding proposals of the selected farm for direct GEF funding and 3-4 other farms; (ii) provide 
assistance to co-financing research for the 4-5 biomass projects; (iii) prepare a biomass energy production 
master plan for Tunisia including aspects uncovered by existing studies and analysis such as identification 
of optimum project and technology structures for Tunisia, and training and dissemination activities to 
target sector/project stakeholders (farms, local governors, private sector representatives and public 
authorities, etc.). 
 
Component IV: 
Project Management
:
In addition to the above components, the GEF funds will be 
utilized for supporting project management to the extent of less than 10% of total costs. Project 
management at the level of the PIUs (including management of the WB Credit Line) is estimated around 
US$1.99 million, of which US$190,000 will be funded by GEF funds and US$1.8 million by Tunisian 
public funds. 
 
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4.  Safeguard policies that might apply 
 
Safeguard Policies Triggered
 
Yes No TBD 
Environmental Assessment (OP/BP 4.01) 
X 
 
 
Natural Habitats (OP/BP 4.04) 
 
X 
 
Forests (OP/BP 4.36) 
 
X 
 
Pest Management (OP 4.09) 
 
X 
 
Physical Cultural Resources (OP/BP 4.11) 
 
X 
 
Indigenous Peoples (OP/BP 4.10) 
 
X 
 
Involuntary Resettlement (OP/BP 4.12) 
 
 
X 
Safety of Dams (OP/BP 4.37) 
 
X 
 
Projects on International Waterways (OP/BP
 
7.50) 
 X  
Projects in Disputed Areas (OP/BP 7.60) 
 
X 
 
5. Tentative financing 
Source: ($m.) 
Borrower 66.4 
IBRD/IDA 
Others (Bank-managed Funds) 
55.0 
2.5 
Total 
    123.9 
 
6. Contact point 
Contact: Ferhat ESEN 
Title: Energy Finance Specialist 
Tel: (202) 473 09 52 / Fax: 202 477 16 09 
Email: fesen@worldbank.org