Municipal financing

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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 a first phase, investment measures will be financed in around 29 of a total of 86 municipalities newly established as part of decentralization. In the planned phases II and III (stock check), measures in other new municipalities and in municipalities that were expanded as part of decentralization can also be financed. The investments in the first phase primarily involve the construction of functional administrative buildings and municipal construction yards, including basic equipment. The exact individual measures will be selected in all phases by the municipalities with the support of the CPSCL. The investments will be secured by an accompanying measure designed to strengthen the CPSCL's implementation capacity and support the project municipalities in building up their capacities. The aim of the project is to strengthen the local self-government of newly established and 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 municipal population. The improved provision of municipal services in terms of quality, quantity, efficiency and distributional justice/poverty orientation is ultimately intended to improve the living conditions of the municipal population. The Tunisian side estimates the total cost of priority municipal investment measures in the new and expanded municipalities at around TND 741 million (around EUR 302 million). The total cost of the investment measures of the FC project is determined by the sum of the available funds and amounts to EUR 195.0 million. The FC contribution amounts to EUR 165.0 million and will be made available to the Tunisian Republic in three phases in the form of classic joint financing (EUR 55.0 million budget funds + EUR 110.0 million market funds). The current loan proposal (Phase I) amounts to EUR 45.0 million (EUR 15.0 million budget funds + EUR 30.0 million market funds). The stock check part for the investment measure (Phases II and III) amounts to EUR 120.0 million. The accompanying measure for Phase I is to be financed by a grant of EUR 3.0 million. To supplement Phases II and/or III, a further grant for an accompanying measure of EUR 3.0 million (stock check) is planned.