Date of Submission to Coordination Unit:
April 19, 2013
A. GENERAL INFORMATION
1. Activity Name
Tunisian Energy Reform Plan (TUNEREP)
2. Requestor Information
Name: Abdullah Zekri
Title: Director General of International Cooperation
Organization and Address: Ministère du développement et de la coopération internationale
Telephone: +216 71 892 653
Email: a. [email protected]
3. Recipient Entity1
Name:
Title:
Organization and Address: Ministry of Industry, Rue du Japon mon plaisir Tunis
Telephone:
Email:
4. ISA SC Representative
Name: F. Albassam
Title: ADG Operations
Organization and Address: OPEC Fund for International Development (OFID)
Telephone: +4310515640
Email: [email protected]
5. Type of Execution (check the applicable box)
√
√
Type
Country-Execution
Joint Country/ISA-Execution
ISA-Execution for Country
ISA-Execution for
Parliaments
1
Endorsements
Attach written endorsement
from designated ISA
Attach written endorsement
from designated ISA
Attach written endorsement
from designated ISA
Attach written endorsements
from designated Ministry and
ISA
Justification
(Provide justification for ISA-Execution)
(Provide justification for ISA-Execution)
Other recipients will include ETAP, STEG, ANME, STIR, SNDP, and Direction Nationale de l’energie
6. Geographic Focus
√
Individual country (name of country): Tunisia
Regional or multiple countries (list countries):
7. Amount Requested (USD)
Amount Requested for direct Project Activities:
(of which Amount Requested for direct ISA-Executed Project Activities):
Amount Requested for ISA Indirect Costs: 2
Total Amount Requested:
3,488,000
348,000
3,836,000
8. Expected Project Start, Closing and Final Disbursement Dates
Start Date:
August 1, 2013
Closing
Date:
December 31, 2015
End Disbursement
Date:
April 30, 2016
9. Pillar(s) to which Activity Responds
Pillar
Investing in Sustainable Growth.
This could include such topics as
innovation and technology policy,
enhancing the business environment
(including for small and medium-sized
enterprises as well as for local and foreign
investment
promotion), competition
policy, private sector development
strategies, access to finance, addressing
urban congestion and energy intensity.
Inclusive Development and Job
Creation. This could include support of
policies for integrating lagging regions,
skills and labor market policies, increasing
youth employability, enhancing female
labor force participation, integrating
people with disabilities, vocational
training, pension reform, improving job
conditions and regulations, financial
inclusion, promoting equitable fiscal
policies and social safety net reform.
2
Primary
(One only)
Secondary
(All that apply)
Pillar
Enhancing Economic Governance.
√
This could include areas such as
transparency,
anti-corruption
and
accountability policies, asset recovery,
public
financial
management
and
oversight, public sector audit and
evaluation, integrity, procurement reform,
regulatory quality and administrative
simplification, investor and consumer
protection, access to economic data and
information,
management
of
environmental and social impacts,
capacity building for local government and
decentralization, support for the Open
Government Partnership, creation of new
and innovative government agencies
related to new transitional reforms,
reform of public service delivery in the
social and infrastructure sectors, and
sound banking systems.
√
Competitiveness and Integration.
This could include such topics as logistics,
behind-the-border
regulatory
convergence,
trade
strategy
and
negotiations, planning and facilitation of
cross-border
infrastructure,
and
promoting and facilitating infrastructure
projects, particularly in the areas of urban
infrastructure, transport, trade facilitation
and private sector development.
Primary
(One only)
Secondary
(All that apply)
√
√
ISA indirect costs are for grant preparation, administration, management (implementation support/supervision) including
staff time, travel, consultant costs, etc.
B. STRATEGIC CONTEXT
10. Country and Sector Issues
Country Background
Tunisia has launched or about to launch economic reforms which will in time, transform the country’s present statecentred economic model largely based on low cost export industry, into an open economy where national and foreign
private sector investments play a major role. The model inherited from the previous regime has shown its limitation
in terms of sustainable growth and social and regional equity despite undeniable results. The economy needs to be
competitive and provide jobs and business opportunities to its educated youth.
National and regional turbulence, and the unfavourable conditions in Europe, the country’s main economic partner,
drove Tunisia’s economy into a severe recession in 2011. In an effort to reduce the impact on households and
businesses, the authorities increased public expenditures and facilitated access to credit. These politically unavoidable
measures led to fiscal deficits, inflationary pressures and loss of foreign exchange reserves and had limited impact on
unemployment. A modest recovery was registered in 2012 but prospects for economic growth and employment, in
the short term, are closely dependent on social stability and regaining investor confidence. The economic situation in
Tunisia remains precarious despite substantial support from donors.
Sector Background
Tunisia’s main challenge is its dependence on imports of oil and gas. This dependence translates into supply
uncertainty, a draw on foreign exchange and a burden on the government budget due to an overstretched policy of
subsidies. To alleviate this state of affairs, the country has started addressing the dependence issue comparatively
early, encouraging exploration of hydrocarbons through an attractive legislation and tapping new sources of energy,
wind and solar in particular. In parallel, several programs of conservation and efficient use of energy were launched.
The country’s current economic downturn and unpromising forecasts point to a need to accelerate the
implementation of current policies and programs and to introduce reforms in many activities of the sector.
Figure 1: Energy Demand
In Tunisia the growing demand for the different
energy products has resulted from sustained
economic growth and gains in living standards
(Figure 1). Energy is critical to the functioning of
the country. The demand for all products must be
met constantly throughout the regions and at all
times. For that, flawless and timely knowledge of
developments in demand of industrial and
household consumers is required. The provision of
electricity and gas to industry and households
reflects the country’s economic progress and a
degree of welfare of its population. In 2012,
electricity production has recorded a significant
increase of 10% over 2011 in response to
increased demand in the residential sector (heating
and air conditioning) and to a gradual recovery of certain activities in the industrial and tertiary sectors including
tourism. Demand of gas has increased equally at about 10%. The share of transport in consumption remains high,
consequent to urbanisation, the development of mass transportation notwithstanding.. The country has reached
commendable results in managing demand and a number of programs continue to limit this demand, but new sources
of supply and substantial investments are needed nonetheless.
Access to electricity
The country’s electrification has reached a quasi-universal (99.5%) access rate as far back as 2004. This major
achievement resulted from programs sustained over many years and expanded to the most remote areas. Tunisia’s
rural electrification programs started in the mid-1970s, when only 6% of the country’s rural households had access to
electricity. At that time about one-half of Tunisia’s population was considered rural. More than 400, 000 households
were connected to the grid in the period 1987 - 2000 and by the end of 2000, 88% of all rural households had gained
access to electricity. Today the country has programs to serve even the most remote areas with photovoltaic systems
in particular.
A constant pattern of energy dependence
Tunisia has lived for a long time with oil revenue as its main
source of foreign exchange. She now lives a situation of
energy deficit which, by its growing importance has become,
for the authorities, a serious concern. Consumption started
exceeding local resources as early as 2000. In 2011 the
deficit is the equivalent of about one million tons of oil. This
deficit would have been larger had it not been for an effective
program of energy conservation. To reduce the multiple
effects of this deficit, the country is conducting two
complementary programs: i) increasing the production of
local resources traditional as well as renewable, and ii)
managing demand through energy conservation and energy
efficiency programs.
The implementation of the two
programs has given uneven results.
In terms of production, ETAP, the country’s national oil company, reported a further drop in crude oil production by
11% between 2010 and 2011, from of 3. 91 Mtoe to 3.32 million Mtoe. The fall in production between 2008 and 2011
has reached 29%. Gas production also fell from 3.902 Mtoe in 2010 to 3.689 Mtoe in 2011, equivalent to 5.5%. This
fall is partly due to social unrest which slowed production in 2011. This notwithstanding, the constant decline in
production in some fields, that have for a long time been major sources of production, appears increasingly
irreversible. Measured by reference to its neighbouring countries, Tunisia’s upstream oil industry is modest, but it is
far from being insignificant. Several estimates of oil reserves have been made and according to the 2012 BP Statistical
Energy Survey, Tunisia had proven oil reserves of 0.425 billion barrels at the end of 2011, equivalent to 15 years of
current production.
In terms of demand of primary resources, ETAP reports that domestic consumption amounted in 2011 to 7.950 Mtoe
against 8.261 Mtoe in 2010, a fall of 3.8%. This fall in demand is explained by the general decline in economic activity
consequent to the disturbances of 2011. Specifically, it was the result of a decrease in the consumption of petroleum
products, from 3.892 Mtoe in 2010 to 3.649 in 2011, equivalent to 6.2%. Gas consumption has also declined from
4.369 Mtoe in 2010 to 4.300 Mtoe in 2011, 1.6%. The country’ refining capacity has not increased with the demand for
refined products. The ageing Bizerte refinery has undergone a number of revamping operations but has remained
basically in its profile of the 1960s catering for less than half the country’s demand of refined products. The country
has therefore been importing oil products for many years and has incurred undue costs. A new refinery is to be built
at La Skhira, south of the country. The new facility will introduce a new factor in the dynamics of the refining and
distribution landscape, which needs to be fully integrated into the present and the future sector policies.
Hydrocarbons deeply rooted in the energy mix.
In terms of energy mix, electricity is generated largely from oil and natural gas. The production of alternative energy is
currently low, but the planned development of wind and solar potential is a promising change in the energy mix. The
first wind farm was inaugurated in 2000. Enlarged, the park of Sidi Daoud now adds 55 megawatts (MW) to the
national park, and holds a potential of nearly 2% of the country's total consumption. STEG has under construction
three new wind farms. These units represent about 200 megawatts, a potential of 4% of the electricity produced in
the country.
A successful program of energy saving
The growth in the country’s energy deficit has led to several programs of energy savings and of reduction in the
country’s energy intensity. An institutional framework was set up, in the form of: i) a policy promotion agency, the
National Agency for Energy Efficiency (ANME);ii) a financing tool, the National Fund for Energy Management, and
iii)an evolving legal framework. ANME and STEG, the electricity utility, have launched programs to substitute
traditional sources of energy (oil), by more economical and less polluting products (gas and renewables).
Energy efficiency contracts have been signed with entities in industry, which alone consumes nearly a third of total
electricity. Large consumers are identified and subjected to mandatory energy audits and investments in energy
savings schemes are encouraged through subsidies. Similar approaches are followed in the commercial buildings and
in private residences as well as in the transport sector. Substantial savings have been made with the maturation of
different programs. Overall, savings amounting to nearly 5.8 million MToe have been made since the launch of the
program in 2004. Savings in 2011 reached 1,313 Ktep.
Tunisia has managed to reduce its energy intensity ratio by 30% over the last twenty years. Primary energy
consumption per thousand dinars of GDP fell from 0.32 in 1990 to 0.22 in 2011, a performance that puts Tunisia in the
league of best performers among energy importing countries. In addition, the development of renewable energy is an
important factor in the fight against CO2 emissions.
An ambitious program for the future
For more than two decades, Tunisia has been implementing programs of rationalisation of energy use and
of development of renewable sources. Ambitious programs of demand management helped reduce the
rate of growth of energy consumption and lower substantially energy intensity. To achieve the same level
of national production, Tunisia today consumes 20% less energy than in 2000.The Tunisian energy mix
remains nonetheless heavily depend on fossil fuels. The evolution of this Mix is subject to a double
constraint: an evolution in the economics of renewable energy and enticing legal and financial incentives.
 Analyses made in the revised Tunisia Solar Plan, projects the evolution of the Tunisian energy
system and the challenges it will be facing during the next two decades and concludes to an
imperious need for reforms. The reforms which are partially in course will be based on three
pillars: i) enhancing local production of clean hydrocarbon; ii) strengthening policies and
programs of energy efficiency and iii) development of renewable sources.
 Energy efficiency policy must build on present practices. It must accelerate the implementation of
on-going energy savings programs and aim at more ambitious targets. Failing this, the demand of
energy could double by 2030.
 Great attention must be given to the diversification of the energy Mix so as to reduce dependence
on fossil fuels. Renewable energy offers good prospects in that respect. Being produced nationally
renewable energy
will enhance security of supply, reduce the vulnerability of the economy to
rising prices in the international market and will contribute to the fight against climate change.
Breakthroughs in technology and advances in cost of manufacturing and maintenance make wind
and photovoltaic power realistic propositions.
 The revised solar plan sets new targets and suggests priorities under development scenarios as
per the graphs below which depict the share of the different sources of renewable energy and the
evolution in the energy mix of in the production of electricity depending on two scenarios:
The challenges at the operational entities level
The public entities operating in the sector have invested in the value chain of the industry, and are present in the
exploration and production of conventional and renewable resources, transport, refining and distribution activities.
These activities are undertaken by ETAP, STIR, STEG, and STDP. Policy orientation and operational guidelines are
researched and issued by the ANME and the Directorate General for Energy of the ministry of industry.
The operating entities of the Sector face two major challenges: i) Ensuring at the least cost and without interruptions,
the supply of energy products including in remote areas. ii) Adapting their business models to a reforming landscape
where entrepreneurship and competitiveness combine with a transparent public service role. The country’s energy
plans call for private sector investments which would lead to a network of public and private entities operating in a
regulated market. These plans are clearly spelled out in the electricity sector and need to be implemented with at
times, changes in missions and in all cases adaptation to a new landscape. In the refining and distribution sector, the
policy framework needs more clarification and expanded formulation. With the introduction of a new refining
facilities, the sector will soon develop into a market where de jure or de-facto monopolies will be challenged and
private and public entities will cohabitate.
11. Alignment with Transition Fund Objective
TUNEREP aligns well with the objective of the Transition Fund, particularly with its focus on deepening the reforms in
the energy sector and contributing to debottlenecking some of its activities. TUNEREP will help drive the sector to
less dependence on government funding, which has become difficult due to the current economic downturn. It will
take stock of prevailing plans, laws and regulations and identify physical as well institutional bottlenecks, with the aim
of instituting quick wins. Over the long term, TUNEREP will help support the implementation of existing rules and
promote new ones to improve the investment climate for a fuller involvement of private capital especially in the wind
and solar sectors, which offer the country considerable scope for exiting a costly dependence on imported energy.
More specifically, it addresses the pillar of the Transition Fund as follows:

Investing in sustainable growth through drawing from and building on the achievements of Tunisian
strategies in promoting energy efficiency and carbon emissions reductions. The project will support the
implementation of a renewed Tunisian Solar Plan which sets renewable energy and energy efficiency targets,
generalizing energy efficiency audits and promoting efficiency devices in industry & households sectors
(solar heaters - prosol; building insulation- promo -isol). TUNEREP aims at operationalizing several schemes
developed by ANME aiming at reinforcing legal and institutional framework with the view to encouraging
private sector investments and public –private partnerships in renewable energy in particular. It also aims at
strengthening capacities of the different operating and regulating entities. TUNEREP will re-evaluate and
strengthen “Le Fonds national de maîtrise de l’énergie’’ (FNME) a facility dedicated to funding energy
rationalization and conservation projects. FNME receives funds from levies on imported cars and loans from
bilateral and multilateral sources guaranteed by the government.

Enhancing Economic governance through helping the operating energy companies gradually move from a
status of subsidized public service monopolies to an operating model which combines competitiveness,
commerciality and performance- controlled public services.

Inclusive development and job creation through preparing the energy operators to support the
government’s program in creating the sociétés de services énergétiques (SSE) to support a market in energy
services. Today, the government controls prices of oil products and electricity tariffs and contributes
subsidies to the sector’s operating companies for investments and running cost. TUNEREP will work with a
WB supported social safety net reform plan which will gradually substitute targeted energy subsidies
ending gradually the universal energy subsidies prevailing today.

Competitiveness and integration through alleviating Tunisia’s dependence on energy supply from its
neighbouring countries. Part of its gas is provided via the Transmed gas pipeline linking Algeria to Italy
through Tunisia. Tunisia could draw advantage of its geographical position to be transit channel for energy
supply to Europe. Intra-region energy market is a major aim of Arab trade enhancement policies.
12. Alignment with Country’s National Strategy
In the matter of energy, Tunisia has a broad national strategy with five goals:
 The uninterrupted supply of energy to households and industry at all times and in all places, at a low cost;
 The mitigation of energy dependence;
 The contribution to the reduction of greenhouse gas emissions;
 The contribution to the country’s drive towards technology and high added value production; and
 The contribution to employment of an educated population.
With the revised solar energy plan, the country has defined a road map for the electricity sub sector. The plan sets
different scenarios for the development of alternative energy sources including contributions by the private sector. In
so doing the plan sets objectives for energy efficiency and energy mix as well as reduction of gas emissions.
The development of policies for refining and distribution of oil product has lagged behind due to delays in
developing new refining facilities The announced plan for the construction of La skhira refinery by Qatari investors
needs to be integrated into a new refining and distribution model.
C. PROJECT DESCRIPTION
13. Project Objective
The objective of the project is to align the institutional and investment plans of the operational and central entities of
the sector with the emerging policy framework of the government through:: (i) limiting costly energy dependence by
way of demand management and increase of domestic production of all sources of primary energy; and (ii) ensuring
that the country realizes its renewable energy potential and contributes to the development of the regional market
and benefit from its strategic geographic position.
14. Project Components
Project Description
TUNEREP has many features of a transformational project in a vital sector where investments and policies need to be
calibrated to serve better the development of the country’s global economy. The energy sector has been for a long
time government controlled and largely run by state owned agencies. TUNEREP aims at facilitating the
implementation of government policies to cause the sector to be more competitive and more open to private sector
investments.
Exploration and production of hydrocarbons are managed by state owned ETAP acting on behalf of the government. A
law enacted in 2000 provides foreign companies tax incentives and allows ETAP to take up to 40% share in
concessions. TUNEREP will examine the company’s plans to enhance exploration and production of hydrocarbons to
make up as much as possible for a deficit of domestic production in the light of a growing demand.
STIR, a state owned company runs the only refinery of the country. The plant is fifty year old, has limited capacities
and is costly to run. A new refinery is envisaged by the government. The operation of the new facility will result in a
competitive market. TUNEREP encourages the formulation of a refining and distribution model.
STEG, the electricity company is also fully owned by the government and for a long time, the largest producer, and the
sole transporter and distributer of electricity in the country. As of 2009, a series of changes in laws and regulations
have opened up the electricity sector to private investment in renewable energy. As a result, large consumers of
electricity have started producing electricity from renewable sources for their own consumption, and sell up to 30%
of their production to STEG. STEG buys IPPs and large consumers’ production at domestic market prices; No specific
incentives are available to promote mass-scale production by the private sector. TUNEREP will help identify
administrative legal and technical and economic bottlenecks that have limited growth of private production of
electricity.
Tunisia has made an early start in generalizing access to electricity, implementing energy efficiency policies and lately
in scaling up production of renewables. ANME, a promotion and regulatory agency in the renewable sector has
formulated and successfully implemented national energy conservation programs and contributes to the management
of the National Energy Conservation Fund (FNME). The country’s solar plan currently under revision is one of ANME’s
core references. TUNEREP will co- finance the implementation of the plan, more particularly the functioning of the
plan’s PIU.
Project Components
Component one: Development plans and SWOT analyses
The operating entities (ETAP, STEG, STIR, and SNDP) need to prepare for a changing operating environment and
formulate their operations and funding plans for the medium term in the light of a gradual emergence of a reformed
sector. In so doing, they will assess their strength and their weaknesses which could imply revised missions,
entrepreneurial paradigms and obligations of competitiveness. In a participatory and iterative process, each
institution would conduct its own SWOT Analysis based on its vision of what serves or inspires best the policy of the
government which would include least government funding and less direct management. In seeking technical
effectiveness and economic efficiency the entities will not be oblivious of public services missions and will be
factoring in a new policy of social safety nets being developed by the government. While the plans and analyses are
institutions developed and owned, external technical assistance will be provided to ensure quality control and input
of best practices. Specifically, this component will include:

Subcomponent 1.1: Support to ETAP through (i) prospects of oil and gas production and plans by all operators to
enhance exploration and exploitation of commercial discoveries: and (ii) recruitment of consultants for high level
technical assistance.

Subcomponent 1.2: Support to STEG through: (i) the development plan and swot analysis; and (ii) recruitment
of consultants for high level technical assistance.

Subcomponent 1.3: Support to ANME through: (i) the development plan and swot analysis; and (ii) recruitment
of consultants for high level technical assistance.

Subcomponent 1.4: Support to STIR through: (i) the development plan and swot analysis; and (ii) recruitment of
consultants for high level technical assistance.

Subcomponent 1.5: Support to SNDP through: (i) the development plan and swot analysis; and (ii) recruitment
of consultants for high level technical assistance.
Component two: Debottlenecking and supporting on-going programs
A series of reviews point to bottlenecks of institutional and physical nature, which could be addressed quickly to help
”pick low lying fruits’’ and add to the efficiency and the development of the sector. Equally, a number of programs
such as the revised solar plan are in need of support to start reforms, lift bottlenecks or accelerate implementation.
Evidently the Post- January 2011 developments have created situations that need to be addressed. Social demands
have led to stoppages in several programs and activities and have led to, for example, to recruitments and change of
status of personnel which need to be integrated in new financial plans.
The oil refinery at Bizerte run by STIR is the only such facility in the country. It is a basic plant with a topping and
reforming facilities and a distillation nameplate capacity of 1,700 ktons per annum (34,000 bpd). Its output is well
below domestic demand of 3.3 million tons The refinery was built in 1962 and has been operating at full capacity for a
number of years with at times, costly stoppages due to the age of the plant. Although a series of upgrades and
expansions have been considered, the plant remains in its old design. Tunisia has been considering a new refinery in
La skhira for some time. Qatar has revived its plans to build an oil refinery after years of delay, potentially adding to
the country's refining capacity an initial 120,000 barrels per day, growing eventually to 250,000 barrels a day. The
expansion will reduce Tunisia's imports, the prices of which have risen in recent years, straining the country's budget.
Even if an early start is given to the project, a number of issues remain to be addressed in the context of a refining
and distribution model. In the meantime STIR needs to study the opportunity of improving refining processes and
enhancing security of the plant and mitigating the risks it poses to a highly urbanized neighborhood.
ANME has, with the assistance of German GIZ, revised the Tunisian Solar Plan, first launched in 2009. The revised plan
is built on two pillars: a policy of suppressing demand which is driven by a set of energy efficiency programs and an
accelerated development of renewable sources (solar and wind). Energy consumption is today 20% lower than in
2000 and if the energy efficiency programs were to stop, energy demand would double by 2030 .Development of
renewable energies will enhance the country’s security of supply ,reduce the country’s energy dependence and
contribute to mitigating climate change. The plan projects growth of demand under three scenarios and proposes
ways and means of improving the regulatory and administrative framework to facilitate its implementation. The Plan
stresses the importance of strengthening and adapting the electricity network to transporting and distributing
alternative energy and sets out the prerequisites of an energy market. Under the middle scenario, the plan projects a
growth of demand of electricity at 4.7% and again in energy intensity of- 1.1% per year. As a result, the share of
renewables in the country’s energy mix is projected at 30% by 2030. TUNEREP will co finance (pari –passu with
German GIZ or alone for the first 18 months) the implementation unit of the Solar Plan.
This component will include:

Subcomponent 2.1: Support to refining through (i) undertaking a study to implement a new method of
treatment of LPG; (ii) enhancing the JET fuel processing mode to obtain more jet fuel; (iii) undertaking an
audit of existing facilities to ensure the safe operation of ageing facilities; and (iv) developing a refining and
distribution model.

Subcomponent 2.2: Support to the electricity sector through: (i) review of staffing requirements and human
resources development at STEG (review of business procedures and management skills; faced with several
challenges, STEG has opted for a total quality approach and a 9000 ISO certification system of certain units); (ii)
review of household consumption patterns (including air conditioning), survey of socio-economic conditions of
household consumers,, review of load curves; (iii) ANME project implementation unit for the revised solar plan
(costs of staff, operation, and studies and communication).
Component Three: Development of a regional energy market
Tunisia has limited energy resources of its own. Its Electricity generation is 99% dependent on natural gas. The
substantial on-going and planned expansion in generating capacity over the next few years relies on natural gas for
90 per cent. Furthermore the stagnating production of crude oil points to the country continuing to import oil
products for the foreseeable future. Tunisia will gain from the development of an energy market in the region. The
region is oil-rich and is also well endowed with solar and wind energy potential. While cooperation programs exist
within the region and with Europe, rapid developments are taking place. Tunisia needs to incorporate these
developments in strategies which promote the country as a transition corridor and a platform of technical services
for the region and south Europe. A study will be prepared to that effect. This component will finance a study on the
status and policy framework by Direction nationale de l’energie.
Component four: The energy sector in the industrial value chain.
Tunisia’s reform programs seek to move up the value chain and shift national production towards sectors of greater
added value. Substantial progress is being realized as 25% of country’s exports are high-technology goods. A
reformed energy sector involving high solar and wind sources would call for diverse services in manufacturing, EPC
and O&M which can be provided by small and medium scale enterprises. STEG reports that input of local
manufacturing and local services have reached 40% wind farms investments , which is encouraging but leaves room
for greater contribution as is the case for example in Egypt. The country’s capacity to leverage its technical know-how
is exemplified by the successful launch of STEG International Services which has won markets. This component will
finance a study of the country’s capacities and incentives needed to enhance local input in the manufacturing and
servicing of renewable energy facilities . The study will be conducted by the Direction nationale de l’energie.
Component five: Overall coordination and quality control
The country is living in unfavorable economic times and is driving a transition towards a reformed economic model.
The availability of energy products and services is crucial to the development of the country. The country has started
reform programs which need facilitation, harmonization and alignment with the governments overall objectives. To
be successful reforms need clear objectives, the contribution of all stakeholders and an effective communication to
gain general public support, TUNEREP will be run by an Implementation Unit and directed by a steering committee
made of representatives of all relevant ministries and the CEOs of the operational entities. Both will be supported by a
coordinating external technical assistance that will ensure input of best practices and quality control.
This
component will finance PIU and Steering Committee operating costs, communications, and consultants as needed.
15. Key Indicators Linked to Objectives





Development plans and swot analyses for each activity
Debottlenecking programs and urgent investment in refinery and Refining & distribution model
Energy efficiency including a Survey of households consuming patterns and the launch of revised solar plan
Energy market and integration in Government plans
Contribution of the sector to the national objectives of employment, regional inclusion and moving national
production and services up in the value chain
D. IMPLEMENTATION
16. Partnership Arrangements (if applicable)
There will be strong emphasis on dialogue between policy makers and implementing entities. Dialogue will be
conducted through an iterative process. The operating entities will prepare plans resulting from SWOT analyses.
These plans will be reviewed by a consultant and further examined by an inter-ministerial steering committee.
Tunisia has started a number of policies and initiatives such as the Tunisian Solar Plan and various energy saving
programs (solar heaters - prosol; building insulation- promo -isol) and the “Fonds national de maîtrise de l’énergie’’.
The project will support existing initiatives rather than launching new ones and will partner with Donors of technical
assistance active in the sector. GIZ of Germany has been supporting the development and the revision of the Tunisian
Solar Plan. The implementation of the plan requires funding. TUNEREP will contribute to the launching and the
management of this important Program . and will co-finance the PIU of the project.
17. Coordination with Country-led Mechanism/Donor Implemented Activities
The project will be coordinated with the World Bank particularly in terms of harmonizing energy pricing policy and
social safety nets and access to GEF and technology and climate change funds. It will also work with the African
Development Bank particularly with regard to Public Private Partnership policies and regulation. Efforts will also be
made to coordinate with the EBRD and the AMF with regard to development of the local capital market and the Arab
Funds and Islamic Development Bank for developing a model for financing of investment projects in renewable
energies.
18. Institutional and Implementation Arrangements
A PIU with a strong knowledge of the sector and a capacity to move a series of accepted ideas into practical programs
will be put in place. It will be tasked with encouraging new ideas and dialogue with stakeholders beyond current
boundaries.
An inter-ministerial Steering committee will support the coordination of all government actions and will facilitate
policy harmonization and reduce bureaucratic impediments.
The Government of Tunisia and OFID will sign an MOU that will define the relationship between OFID and the
Government which would include a detailed operation manual specific to TUNEREP. The manual would include the
provisions of the TF operations manual, the provisions of the financial procedure agreement, and detailed project
management processes at executing agencies and central levels. The manual will include the procurement,
disbursement and reporting procedures as well as provisions for auditing. OFID has ascertained the capacity of
executing agencies which, for most of them, have been working with international organizations such as the World
Bank for many years. OFID has recently funded STEG for energy and gas projects and found its capacity very
satisfactory. The PIU is supported by the Ministry of Industry apparatus and a coordinating and quality control
consultant as per budget below (component 5).
19. Monitoring and Evaluation of Results
OFID and the Government of Tunisia will set up a supervision committee which will jointly evaluate progress in the
project and steer development as required. Both OFID and Government will be recipient of:
 Quarterly progress reports on each component,
 Quarterly Financial status.
E. PROJECT BUDGETING AND FINANCING
20. Project Financing (including ISA Direct Costs3)
Cost by Component
Transition
Fund (USD)
Country CoFinancing
(USD)
Other CoFinancing
(USD)
Total (USD)
Component one: Development plans and SWOT
analyses - Elaboration / confirmation of, investment
and financing plans for the years 2014 -2018 and
analysis of the strengths and weaknesses of the
operating entities in the context of a changing business
environment and validation through technical
assistance.
1.1 ETAP:
664,000
664,000
176,000
176,000
1.1.1 prospects of oil and gas production and plans
by all operators to enhance exploration and
exploitation of commercial discoveries
1.1.2 High level Technical assistance (fees: 8 man
months * us$ 20 000 per m/m+ Travel us $ 8000
+ accommodation 8000= 176 000
1.2 STEG
132,000
132,000
132,000
132,000
112,000
112,000
112,000
112,000
1.2.1 development plan & swot analysis
1.2.2 High level technical assistance (fees: 6 m/m
*20 000+travel 6000+ accommodation 6000 )
1.3 ANME
1.3.1 development plan & swot analysis
1.3.1 High level technical assistance (fees: 6 m/m
*20 000+travel 6000+ accommodation 6000 )
1.4 STIR:
1.4.1 development plan & swot analysis and
refining model
1.4.2 High level technical assistance (fees: 5 m/m
*20 000+travel 6000+ accommodation 6000 )
1.5 SNDP
1.5.1 development plan & swot analysis
1.5.2 High level technical assistance (fees: 5 m/m
*20 000+travel 6000+ accommodation 6000)
Component two: debottlenecking and supporting
on-going programs
2.1 refining:
2.1.1 Treatment of LPG: a study to implement a
new method of treatment of LPG(STIR estimate
50000euros)
2.1.2 new processing unit JET fuel: enhancing
processing mode to obtain more jet fuel (STIR
estimate 100 000Euros)
3
2,024,000
799,000
2,024,000
799,000
65,000
65,000
130,000
130,000
ISA direct costs are those costs related to the ISA’s direct provision of technical assistance within the project.
2.1.3 Audit of existing facilities to ensure a safe
operation of an ageing
2.1.4 developing a refining and distribution model
2.2 electricity
2.2.1 STEG: review of staffing requirements and
human resources development. Review of business
procedures and management skills ; Faced with
several challenges, STEG has opted for a total
quality approach and a 9000 ISO certification
system of certain units (STEG estimates)
2.2.2 review of household consumption patterns
(including air conditioning); survey of
socio
economic conditions of households consumers;
review of load curves (STEG estimates)
2.2.3 ANME Project implementation unit of
revised Solar plan Estimate by ANME for three
years (000DNT)
·
staffing
1260
·
running cost
·
studies& communication
·
total
104,000
104,000
500,000
500,000
1,225,000
1,225,000
150,000
150,000
200,000
200,000
875,000
875,000
360
1380
3000 = US$ M 1.875
Component Three: development of a regional
energy market
Status and policy framework study by Direction
nationale de l energie
Component four: the energy sector in the
industrial value chain
Status and policy framework study by Direction
nationale de l energie
Component five: overall coordination and quality
control
PIU &steering committee running cost
50 000* 3 years
150 000
Communication
100 000
150,000
150,000
150,000
150,000
500,000
500,000
3,488,000
3,488,000
Overall consultant 250 000
Total direct cost US$
21. Budget Breakdown of Indirect Costs Requested (USD)
Description
For grant preparation, administration and implementation support:
Staff time
Staff travel
Total Indirect Costs
Amount (USD)
348,000
F. Results Framework and Monitoring
Project Development Objective (PDO):
YR 1
YR 2
YR3
none
Draft
swots
&
plans
Valida
ted
develo
pment
plans
Quarterly
All operating
entities /PIU
study
none
Refini
ng and
distrib
ution
model
Quarterly
STIR/PIU
STIR/PIU
study
none
Urgen
t
invest
ment
and
debott
leneck
ing
House
hold
energy
survey
(pilot)
Valida
ted
Swot
&
Draft
plans
discus
sed
Draft
refinin
g
model
Responsibility
for Data
Collection
All operating
entities /PIU
House
hold
energy
survey
(gener
alized)
Solar
Plan
(debot
tlenec
king
recom
mend
Conclu
sions
and
Work
Progra
ms
STEG
STEG
ANME
ANME
PDO Level Results Indicators*
Unit of
Measure
Indicator One:
Swot analyses and institutional
and operational development
plans
swot
report &
Developm
ent plan
Indicator Two:
Refining & distribution model
Indicator Three:
Energy efficiency
Cumulative Target Values**
Baseline
Solar
Plan
(launc
h)
YR 4
YR5
Frequency
Data Source/
Methodology
Description
(indicator
definition etc.)
ations
Indicator Four:
Energy market
report
none
Indicator Five:
Contribution to national value
chain
report
none
survey
Legal
frame
work
Draft
recom
mend
ations
Imple
menta
tion
plan
DNE
DNE
DNE
DNE
:
INTERMEDIATE RESULTS4
Intermediate Result (Component One):
Intermediate Result indicator
One:
Intermediate Result indicator
Two:
Intermediate Result (Component Two):
Intermediate Result indicator
One:
Intermediate Result indicator
Two:
Intermediate Result (Component Three):
Intermediate Result indicator
One:
Intermediate Result indicator
Two:
4
In view of the nature of the work (essentially studies and plans ) Intermediate results are outlined as stages under’’ cumulative target values’’