Decentralization / Municipal Financing II

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The project aims to finance priority municipal investment measures (both new investments and rehabilitation) through the Tunisian public Caisse des Prêts et de Soutien des Collectivités Locales (CPSCL). In the second phase, investment measures will be financed in the municipalities expanded as a result of decentralization. The beneficiaries of the first phase were 29 of the newly established municipalities. The investments primarily involve the expansion of needs-based basic infrastructure and the provision of municipal services. Possible measures include the construction and renovation of municipal roads, economic infrastructure projects such as public markets or the procurement of relevant equipment. The exact individual measures will be selected by the municipalities with the support of the CPSCL. The investments will be secured by an accompanying measure designed to strengthen the CPSCL in its implementation capacity and support the project municipalities in building their capacities. The aim of the overall project is to strengthen the local self-government of the expanded municipalities and their ability to provide needs-based, sustainable municipal facilities and services. This is intended to contribute to supporting the democratic reform process in Tunisia and to improving the social and economic situation of the local population. The FC contribution to the investment measures of the FC project amounts to EUR 81.67 million and will be made available to the Tunisian Republic in two phases in the form of classic joint financing (Phase I, EUR 45 million) and a budget loan (FICOL II, EUR 36.67 million). As in Phase I, the accompanying measure for Phase II is to be financed by a grant of EUR 3.0 million.