The European Investment Bank (EIB) has announced €450 million in loans and assistance to support small and medium-sized enterprises (SMEs) and infrastructure projects in Tunisia.
The EIB, an institution of the European Union (EU), stated that this “new financial support” for Tunisia is aimed at “projects with a significant impact on the population and on the country’s economic and social development.”
The funding will be formalized during the 21st session of the “Tunisia Investment Forum,” which starts on Wednesday and runs through Thursday. Ioannis Tsakiris, the new EIB Vice President in charge of financing in the Maghreb, will participate in the event.
In a statement, Tsakiris noted that this assistance “will play a crucial role in creating jobs, stimulating innovation, and promoting balanced development for the benefit of all Tunisians.”
The EIB highlighted that all loans will be provided on favourable terms concerning interest rates and repayment periods.
A credit line of €170 million will be allocated to “enhance support for micro, small, and medium-sized enterprises, which make up 90% of the country’s businesses and employ 60% of the workforce.”
Additionally, the EIB has allocated €210 million to modernize the “strategic” road between Sfax (in the southeast), Tunisia’s second-largest city, and Kasserine (in the west-central region), a poor area with weak transportation links to major economic centres.
A third loan of €45 million will help fund the European electrical interconnection project between Tunisia and Italy, designed to transport sustainable energy.
The EIB will also provide a €25 million grant to update (renew and digitize) Tunisian schools, complementing a €40 million loan granted last year.
Tunisia, burdened with significant debt (80%of GDP), is experiencing a major crisis with growth in 2023 limited to 0.4%, a high unemployment rate (over 16%), and worsening poverty levels due to inflation.
Last year, Tunisian President Kais Saied rejected a preliminary agreement with the International Monetary Fund (IMF) for a new $2 billion loan, considering the IMF’s recommended reforms—including restructuring state-owned enterprises and gradually lifting subsidies on some basic products—”dictates.”
