Signature of Loan Agreement of Kuwaiti Dinars 10,000,000 for the [...]

A Loan Agreement was signed today in Tunisia between the Government of the Republic of Tunisia and Kuwait Fund for Arab Economic Development, whereby the Fund willmake a Loan of Kuwaiti Dinars ten million (K.D. 10,000,000) (equivalent to about U.S. Dollar 32 million) to assist in financing of the Renovation and Development of the Railway Lines for Phosphate Transportation Project in Tunisia.

His Excellency Mohammed Ali AlNafti, Minister of Foreign Affairs, Migration and Tunisian Abroad, signed the Loan Agreement on behalf of Government of the Republic of Tunisia, whereas His Excellency Abdullah Ali AlYahya, Minister if Foreign Affairs and Head of Board of Directors of Kuwait Fund, signed the Loan Agreement on behalf of Kuwait Fund.

The Project aims tocontribute insupporting the economic and social development in the Republic of Tunisia through the renovation and development of the railway lines for the transportation of phosphate in the "phosphate triangle" areas in thesouth of the country, which shalltransport larger quantities of phosphate at a lower cost. The Project will reflect positively on transportation sector, and it will also reduce the loadson the roads infrastructure and reduce traffic congestion and accidents, The Project is also a key component of the National Transport Strategy in the Republic of Tunisia.

The Project consists of renovation and development works for the railways of the phosphate triangle area in the south of the country, which extends over a length of about 190 kilometers, with the aim of improving their ability to accommodate new trains that run on both electricity and fuel that can transport larger quantities of phosphate and its derivatives, in addition to achieving double speeds ranging between 80 and 100 km/h, which in turn reduces carbon emissions. The Project also includes the construction and equipping of a concrete beam's factory, in addition to the consultancy services for supervision of the implementation to ensure quality and compliance with the required standards. The Project implementation period is expected to take about 3 years, as the works are expected to be completed in the first half of 2028.

The total costs of the project including reserves, taxes, and interest during implementation are estimated at 536 million Tunisian dinars, or about K.D 53.6 million, of which about KD 37.5 is in foreign currency, equivalent to about 70% of the total costs. The Fund will contribute to the project's financing through the proposed 10 million Kuwaiti Dinars Loan. The Project will also be financed with a loan from Saudi Fund for Development in an amount of about U.S.$ 55 million, equivalent to about 17.2 million Kuwaiti Dinars, whereas the Government of the Republic of Tunisia will provide the rest of the financing necessary for the implementation of the project or any increase that may occur in costs.

The term of the Loan is 27 years, including a grace period of four years. The Loan is to be amortized in 46 semi-annual installments, the first of which will be due on the first date on which interest or other charges on the loan will be due, in accordance with the Loan Agreement, after the expiry of the above-mentioned grace period. The Loan bears interest at the rate of 2% per annum in addition to a service charge of 0.5% per annum for meeting administrative costs and the expenses of implementing the Loan Agreement.

With this loan, the Fund will have provided 39 loans to Tunisia, as the Fund has previously provided it with 38 loans to finance projects in various sectors with total cost of about, 282.4 million Kuwaiti dinars, of which about K.D. 191.8 million, representing about 67.9% of the total value of the loans, have been disbursed, and about K.D. 95.9 million, representing %33.9 about of said loans, have been reimbursed. The Fund has also provided Tunisia with two technical assistance grants, the first of which to finance the preparation of technical and economic feasibility studies for the acquisition and reclamation project of Monastir Bay with a value of K.D. 100,000, of which about K.D. 78,000 were disbursed, and the second to finance the preparation of technical and economic feasibility studies for the project of building and equipping the cancer center with a value of K.D. 300,000, which has yet to be disbursed.