The World Bank is holding off from financing a $50-million fund to develop electricity plants to serve Tunisian small-to-medium size businesses, the World Bank’s regional representative Eileen Murray said.
The stalled World Bank program is seen as extremely important for the markets of Libya and Algeria where power supplies to SMEs and local infrastructure such as hospitals are erratic at best.
In a briefing at her office in Tunis with Capitol Intelligence, Murray said the fund is “not a priority” for the bank and that it could wait for a number of years.
The delay by the World Bank has now put in question a program of supplying some 200 megawatts of new capacity to Tunisian SMEs, of which about 100 megawatts would be supplied by small five-megawatt power plants serving key sectors such as ceramics, textiles and other SME industries with high energy needs.
Neijb Boujnah, a power engineering consultant, said that producing power with natural gas is six times cheaper than other means in Tunisia and that use of co-generation plants could increase efficiency and lower CO2 emissions by 30 percent to 40 percent.
Sources close to the situation said the decision by the World Bank to go slow on the co-generation fund may stem from a controversy regarding the use of new and refurbished turbines in the five-megawatt plants.
ANME, the oversight group, is the middle of an ongoing debate whether it is better for Tunisia SMEs to use refurbished turbines at a lower cost or purchase new turbines. There are currently only two suppliers of this type of small Turbine on the market: The UK-based Centrax which uses Aero derivative technology developed by Rolls Royce and Canton Ticino, Switzerland-based Caterpillar subsidiary Turbomach.
Boujnah said he has proposed to ANME that Tunisian companies acquire refurbished turbines from Centrax as Tunisian companies need a quicker “pay back” than companies in the west.
He said that Tunisian banks will not provide lending for periods exceeding 4 years so the less expensive alternative of refurbished turbines makes more sense for the Tunisian market.
“A five-megawatt plant costs a total of TND 8.5m if done with new turbines and TND 6m if they use refurbished turbines,” he said, adding.