The new projects form part of STEG’s five-year plan for 2002-06, which was unveiled shortly before the loan was signed. The EIB loan will go towards financing the studies, implementation and launch of a raft of schemes aimed at upgrading the country’s distribution network and improving the control system.

The main elements of the projects include the installation of high-voltage overhead lines and underground cables; conventional and metal-clad high-voltage substations; power transformers; and a telecommunications system for network control and transmission. A total of 1,300 kilometres of new infrastructure will be installed and 3,600 kilometres of high-tension and 3,700 kilometres of low-tension lines will be upgraded. The various projects are scheduled to come into operation by 2004.

The loan is the biggest to date that the EIB has signed with STEG. It follows three earlier loans to the electricity body totalling Eur 105 million ($102 million) extended between 1995 and 2000. The latest loan has a tenor of 20 years with a five-year grace period and a flexible interest rate.

The government has allocated a budget of TD 250 million ($183 million) for STEG’s 10th five-year development plan against a budget of TD 88 million ($66 million) for the previous plan. The bulk of the investment – some 27 per cent – will be made in the Greater Tunis area reflecting the size of the population there and the amount of electricity consumed. Some 24 per cent will be invested in the south of the country.