TUNISIA: Enhancing the Financial Sustainability of SONEDE

SONEDE is the national water utility of Tunisia, providing potable water services to about 9 million people throughout the country. As of 2015, SONEDE delivers water to 100% of Tunisian urban population and to approximately 50% of the country’s rural population. 85% of Tunisian total population benefits from SONEDE’s water distribution, meeting international standards in terms of water quality and without service disruption. However, since 2007, SONEDE does not reach financial equilibrium and if this situation was to last longer, SONEDE will not be able to meet its service requirements both at short and medium term. Numerous crucial investments are to be done, especially related to reinforcement and extension of production and distribution capacities such as desalinization and connection of rural populations to SONEDE’s network. Nevertheless, more efforts should be dedicated to improving operating returns and asset management, as well as developing operation tools.

In 2015 and 2016, PPIAF provided a technical assistance grant to support the strengthening of SONEDE’s financial viability by identifying an Action Plan for SONEDE and the Government of Tunisia to allow SONEDE to: (a) gain sufficient debt capacity to support the various loans necessary from development banks to finance the NWSIP program; and (b) reach sufficient financial strength to be able in the medium term to access private banks and financial markets for incremental debt for new infrastructure without requiring a sovereign guarantee.