Saudi signs $55m loan to upgrade Tunisian railway

Riyadh: The Saudi Fund for Development (SFD) signs a soft loan agreement worth $55 million with Tunisian Minister of Economy and Planning, Feryel Ouerghi. The loan is designated to fund the modernization and expansion of the railway network primarily for phosphate transportation across Tunisia.

The signing ceremony witnessed the presence of Tunisian Minister of Transport Rabie El-Majidi, Saudi Ambassador to Tunisia Abdulaziz bin Ali Al-Saqr and officials from both nations.

The financing is poised to revamp approximately 190 km of the railway network, augmenting its capacity for phosphate transportation and bolstering Tunisia’s economic advancement. The agreement is anticipated to generate both direct and indirect employment opportunities while alleviating traffic congestion issues.

Expressing gratitude for the SFD's diligent oversight of the funded development projects, Minister Ouerghi highlighted the organization's pivotal role in ensuring project completion and overcoming obstacles. She further commended the SFD for its contribution to achieving desired outcomes and fostering avenues for future collaborations.

SFD CEO Sultan bin Abdulrahman Al-Marshad emphasized the indispensable role of the transportation sector in steering countries towards a prosperous future for their citizens. He reiterated SFD's belief in the pivotal role of Tunisia's transportation sector in supporting socio-economic progress, expressing optimism that the agreement would catalyze this endeavour.

“This sector contributes to the growth of vital opportunities toward sustainable development, leading to societal wellbeing and progress”, said Al-Marshad.

The SFD has served as a stalwart supporter of Tunisia's development journey since 1975 and extended financial assistance totalling over $1.3 billion across 35 projects. These programs encompass social infrastructure, transportation, energy and rural development.

The project under the auspices of the Tunisian National Railway Company carries a total cost of $166 million. The initial phase will focus on enhancing the southern network, particularly in the governorates of Sfax, Gafsa and Gabès, with an anticipated completion timeframe of two years.

In addition to the SFD's recent funding, Tunisia received substantial financial backing of $500 million from Saudi Arabia last July and an additional $268 million from Italy in August. But the negotiations for a bailout package with the International Monetary Fund (IMF) have hit a standstill since October. Although initial talks proposed a 48-month loan nearing $2 billion, disagreements over the terms have left the deal in a state of uncertainty.

Julie Kozack, director of communications at the IMF, reiterated the organization's commitment to supporting Tunisia's reform endeavours, expressing readiness to engage with the authorities should they express renewed interest in the program.