26678 - Topic Tunisia

Who We Are
Who We Are

IFC is the largest global development institution focused on the private sector in developing countries. By encouraging growth, IFC advances economic development, creates jobs and improves the lives of people.
More About Us
About IFC

Our Leadership

Development Partners
Accountability

Learn more about accountability
Annual Report

Download the Report
What We Do
What We Do

IFC advances economic development and improves the lives of people by encouraging the growth of the private sector in developing countries. We achieve this by investing in impactful projects, mobilizing other investors, and sharing expertise.
What We Do Overview
SOLUTIONS

Our products and services
OUR PRIORITIES

Climate Business

Fragile & Conflict Afflicted Situations

Gender

Mobilizing Private Capital

Sustainability
SECTORS & EXPERTISE

Agribusiness & Forestry

Creative Industries

Education

Financial Institutions

Funds

Health

Infrastructure

Manufacturing

Public-Private Partnerships

Tourism, Retail & Property

Trade & Supply Chain Finance

Venture Capital

Working Upstream
Where We Work
Where We Work

As the largest global development institution focused on the private sector, IFC operates in more than 100 countries around the globe. We apply lessons learned in one region to solve problems in another.
Overview
By Region

Africa

East Asia and Pacific

Europe

Latin America and the Caribbean

Middle East and Central Asia

South Asia
Our Impact
Our Impact

Our impact improves lives. IFC brings a clear set of advantages to the world’s most challenging markets. Including a history of innovation, a global mandate, and a determination to achieve measurable development impact.
Our Impact Overview
PRINCIPLES & MEASUREMENT

Impact Investing at IFC

Measuring and Monitoring (AIMM)

Evaluation

Sustainable Development Goals (SDGs)

Owned by 186 member countries and consistently rated AAA/Aaa. IFC aims to achieve our mission of promoting development by providing debt and equity to the private sector, through a range of benchmark and bespoke products.

For Partners

For Investors

Get in Touch

Summary of Proposed Investment

Project Number

26678

Company Name

TOPIC SA

Date SPI Disclosed

Mar 21, 2008

Country

Tunisia

Industry

Metals and Mining

Projected Board Date

Apr 21, 2008

Status

Completed

Sector

Oil and Gas Production (Includes Development)

Department

Regional Industry - INF Africa

Environmental Category

B - Limited

Previous Events

Approved : Dec 2, 2008
Signed : Jan 5, 2009
Invested : Dec 23, 2009

Project Description

TOPIC, S.A. (TOPIC or the company) is a small Tunisian oil and gas exploration and production (E&P) company, with interest in three oil and gas blocks in Tunisia:

- 100% interest in the offshore Halk el Menzel (HelM) concession block;
- 15% interest in the onshore Jelma exploration block; and
- 50% interest in the onshore Douleb West prospecting block.

The company is not currently producing from any of its blocks.

IFC has been requested to provide a financing package to the company to partially fund TOPIC’s 2008-2011 investment program, which includes:

- the development of an oil discovery in HelM;
- acquisition of seismic data and drilling of exploration wells at HelM and TOPIC’s other blocks; and
- further business development activities.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	11.50
Equity	18.50

Development Impact

- Fit with the World Bank Group Strategy:

The World Bank’s most recent Country Assistance Strategy (CAS) for Tunisia, proposes to help the Government of Tunisia (GoT) address three challenges:

- strengthen the business environment to support the development of a more competitive, internationally integrated private sector and improve competitiveness of the Tunisian economy;
- enhance skills and employability of graduates and labor force in a knowledge economy; and
- improve the quality of social services through increased efficiency of public expenditures. IFC’s strategy in Tunisia is to focus on where IFC can add value and foster private sector development especially in sectors currently not properly serviced by Tunisian commercial banks, including the oil and gas sector. The proposed IFC investment is therefore fully consistent with this strategy.

- Development Impact:

- Benefits to Government of Tunisia
The project is expected to provide GoT with considerable revenues from TOPIC’s operations in HelM, through the collection of a 10-15% royalty and a 50-75% profit tax (current estimate of about $133 million in revenues to GoT by end of 2012 under IFC’s base case). TOPIC will also have an obligation, as per Tunisia’s Hydrocarbon Code, to sell 20% of its oil production to the local Tunisian market at a 10% discount to international prices.

- Direct and indirect local employment and training:

The proposed project and continued growth of the company is expected to bring direct and indirect local employment and training. It is estimated that the development of HelM alone will generate 200 direct and indirect jobs during construction and 100 during operations. All TOPIC’s staff are currently Tunisian and it is expected that at least 90% of direct and indirect jobs created will be local.

- Local supplier linkages / community development:

The proposed project is expected to benefit local communities by way of purchases of local goods and services. For example, the construction of the production facility for HelM will be built at the port of Sfax, in Tunisia, and will require substantial inputs from local industrial and marine subcontractors. Over 50% of Project capex is expected to be sourced locally.

- Promoting local independent player:

The project will support one of the very few locally-owned private sector North African upstream companies and help it grow and reach international best practice on environmental and social issues and corporate governance.

- Mobilize financing:

IFC will provide financing to the company and help it mobilize additional equity financing to complete the project’s financial plan. As a small local company, TOPIC has limited ability to raise funds in the international capital markets and local financial institutions are not as familiar with the oil and gas sector. IFC’s participation in the transaction will therefore be key to catalyze co-investment from other potential investors.

- Long-term partnership:

IFC will play an important role as long term partner to TOPIC, capable of providing follow-up debt or equity financing across business cycles. The company will potentially be requiring significant additional financing if its exploration activities are successful. IFC will also be able to provide TOPIC with technical and strategic guidance for its future international expansion.

- Stamp of approval:

As a company in its early stages of development, TOPIC sees IFC’s investment as providing an important validation of its strategy and technical expertise for other investors. IFC is also expected to assist TOPIC in corporate governance matters, in preparation for a potential IPO.

- Environment and Social (“E&S”):

The company’s management is committed to high E&S standards and is eager for IFC’s advice and guidance on E&S international best practice, including on improving their E&S management systems, commissioning of Environment and Social Impact Assessments, etc.

This is a Category B project according to IFC’s Procedure for Environmental and Social Review of Projects because a limited number of specific environmental and social impacts may result which can be avoided or mitigated by adhering to generally recognized performance standards, guidelines or design criteria. The review of this project comprised an appraisal of the Project’s technical, environmental and social information, visiting some of the key oil and gas operations in Tunisia, as well as interviews with company managers and operations’ personnel.

The information about how potential impacts of the project and how they will be addressed by the company is summarized in the Environmental and Social Review Summary (ESRS) and in the Action Plan agreed with the client.

Benefits from this project accrue from a variety of sources, including employment, supply linkages, and contributions to government revenues. The project’s revenue contributions to the GoT are a small share - less than 0.35% - of total government revenues. The GoT’s share of revenues accrues entirely to the central government. The GoT manages these revenues together with all other government revenues. For 2008, GoT was expected to spend 38% of its budget on payment of salaries (mainly in administration, education, and healthcare sectors), 21% on development projects, and 23% on debt repayments. According to Transparency International, Tunisia has a Corruption Perception Index of 4.2 and is ranked in the 61st position out of 180 countries graded in 2007. In its assessment, IFC has considered the value of the Project’s benefits, and governance and other risks to these benefits. IFC believes the risks to Project benefits not being realized, is relatively small. The non-revenue benefits which are significant, such as strengthening domestic energy production, generating jobs, purchases of local goods and services are unlikely to be impacted by weak governance. The Project is also consistent with overall World Bank Group objectives in the oil and gas sector; including helping to strengthen private sector participation in the sector.

Contacts

For Inquiries About the Project, Contact

Mr. Mohamed Toumi
Chief Executive Officer
TOPIC SA
Immeuble SAADI , Tour AB, Appt 26
1082 El Menzah IV Tunis
Tunisie

Tél : (+216) 71 23 05 03
Fax : (+216) 71 23 05 13
www.topic-energy.com

For Inquiries and Comments About IFC, Contact

General IFC Inquiries
IFC Corporate Relations
2121 Pennsylvania Avenue, NW
Washington DC 20433
Telephone: 202-473-3800
Fax: 202-974-4384
E Mail: Webmaster

Local Access of Project Documentation

TROPIC, S.A. (Sfax Office) 17 Rue Garibaldi, 3000 Sfax Tunisia TOPIC, S.A. (Tunis Office) Immeuble Saadi, Tour A/B El Menzah, 1082 Tunis Tunisia

This Summary of Proposed Investment is prepared and distributed to the public in advance of the IFC Board of Directors' consideration of the proposed transaction. It is not an offer of shares to the public and is intended solely to enhance the transparency of IFC’s activities. This document should not be construed as presuming the outcome of the Board decision. Board dates are estimates only. The following SPI is disclosed in accordance with IFC’s Policy on Disclosure of Information that went into effect April 30, 2006.

The map is for illustrative purposes and does not imply the expression of any opinion on the part of the World Bank, concerning the legal status of any country or territory or concerning the delimitation of frontiers or boundaries. Country borders or names do not necessarily reflect the World Bank Group's official position. In some cases, available project location information is limited to the country of the project's activities. Locations are approximate.

Projects

Summary of Proposed Investment

Project Description

Sponsor / Cost / Location

Project Sponsor and Major Shareholders of Project Company

Total Project Cost and Amount and Nature of IFC's Investment

Board Approved IFC Investment

Location of Project and Description of Site

Development Impact

Anticipated Impact Measurement & Monitoring (AIMM) Assessment

IFC's Expected Development Contribution

Environmental and Social Issues - Category

Governance Risk Assessment

Press-Release

Related ESRS/ERS

Similar Projects

Contacts

Disclaimer