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On November 20th 2024, in Tunis, a loan agreement was signed between the Kuwait Fund for Arab Economic Development and the Government of the Republic of Tunisia. Under this agreement, the fund will provide a loan of 10 million Kuwaiti Dinars (KWD) (equivalent to approximately 32 million US dollars) to contribute to financing the renewal and development of railway lines for phosphate transport in Tunisia.
The agreement was signed on behalf of the Tunisian government by His Excellency Mohamed Ali Al-Nafti, Minister of Foreign Affairs, Migration, and Tunisians Abroad. On behalf of the Kuwait Fund, it was signed by His Excellency Abdullah Ali Al-Yahya, Minister of Foreign Affairs and Chairman of the Board of Directors of the Kuwait Fund.
Objective of the Project
The project aims to support Tunisia's economic and social development by renewing and developing railway lines in the phosphate triangle region in the south of the country. It seeks to transport larger quantities of phosphate at lower costs, positively impacting this vital sector. The project also aims to reduce the burden on road infrastructure, alleviate traffic congestion, and decrease accidents. It is a cornerstone of Tunisia's national transport strategy.
Project Components
The project includes the renewal and development of railway lines spanning approximately 190 kilometres in the phosphate triangle region. The upgrades will enhance the lines' capacity to accommodate new electric and fuel-powered locomotives capable of transporting larger quantities of phosphate and derivatives. The improvements will also double train speeds to 80–100 km/h, contributing to reduced carbon emissions.
The project also involves constructing and equipping a concrete sleeper plant, along with providing consultancy services for implementation oversight to ensure quality and adherence to required standards. The implementation period is expected to be three years, with project completion anticipated in the first half of 2028.
Financial Details
The total project cost is estimated at 536 million Tunisian Dinars, equivalent to 53.6 million Kuwaiti Dinars, of which approximately 37.5 million KWD will be in foreign currency, accounting for about 70% of the total cost.
- The Kuwait Fund will contribute 10 million KWD through the proposed loan.
- The Saudi Fund for Development will provide 55 million USD as an additional loan.
- The Tunisian government will cover the remaining required funding and any cost overruns.
The loan has a repayment period of 27 years, including a four-year grace period.
It will be repaid in 46 semi-annual instalments, with the first due after the grace period.
The loan carries an interest rate of 2% per annum, in addition to a 0.5% annual fee for administrative and execution costs.
Background on Kuwait Fund’s Support to Tunisia
This is the 39th loan provided by the Kuwait Fund to Tunisia. The fund has previously extended 38 loans totalling 282.4 million KWD, of which approximately 191.8 million KWD (67.9%) has been disbursed. Tunisia has repaid around 95.9 million KWD (33.9% of the total loan value).
The fund has also provided two technical grants to Tunisia:
1. 100,000 KWD to finance feasibility studies for the Monastir Bay reclamation and development project, of which 78,000 KD has been disbursed.
2. 300,000 KWD to finance feasibility studies for establishing and equipping a cancer treatment center, which has not yet been disbursed.
About the Kuwait Fund for Arab Economic Development
The Kuwait Fund For Arab Economic Development is the first institution in the Middle East that took an active role in the international development efforts.
The Kuwait Fund extends Loans on concessionary term to finance development projects in the developing countries. The Fund also provides technical assistance to finance the costs of the feasibility studies of projects, as well as the training of nationals of the borrowing countries. In addition, the Fund subscribes in the capital of international and regional development institutions. Today, the Kuwait Fund forms a solid bridge of friendship and solidarity between the state of Kuwait and the developing nations.
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