Tunis: The Assembly of People’s Representatives (ARP) adopted in plenary session Wednesday a law approving a $55-million loan agreement signed on February 22, 2024 between Tunisia and the Saudi Fund for Development (SFD) to co-finance a project to renovate the phosphate rail transport network.
Answering questions from members of parliament, Minister of Industry, Mines and Energy, Fatma Thabet Chiboub, said that the state’s own resources did not allow it to abandon external financing, hence the use of debt to carry out certain mega-projects.
She added that debt is beneficial for the state if the right conditions are met (interest rate, grace period and duration of the project).
For Thabet, the loan to be granted by the SFD to finance the project to renovate the phosphate railway network is “profitable” for Tunisia because it will be repaid over 20 years, including a five-year grace period with an interest rate of around 2%, in addition to the two-year project completion period.
The 518-million-dinar projec
t to renovate the phosphate rail network is being carried out by the Tunisian National Railway Company (SNCFT).
The aim is to renovate and reinforce part (190 km) of the railway lines used to transport phosphate, in order to facilitate the transport of larger quantities of phosphate and optimise costs.
The project also aims to increase SNCFT’s capacity to transport produced and processed phosphate, improve the financial situation of companies operating in the sector and contribute to the recovery of the national economy.
It also aims to reduce the maintenance costs of the rail network, much of which has been in use for more than 40 years, to promote the use of new 3,200-tonne wagons for the transport of phosphates, and to contribute to regional development and the creation of direct and indirect jobs.
The expected objectives include environmental protection, energy saving, reduction of traffic on the road network and improvement of the balance of trade by guaranteeing the transport of larger quantities of
phosphate and phosphate derivatives.
Source: Agence Tunis Afrique Presse