Tunisia has secured a loan worth approximately 145 million Tunisian dinars from the Arab Fund for Economic and Social Development (AFESD) to rehabilitate its severely degraded southern railway lines, with priority given to phosphate transport — a strategic but struggling sector due to crumbling infrastructure and repeated logistics disruptions.
The loan was approved on April 21, 2026, during a plenary session of the Assembly of People’s Representatives. It targets the rehabilitation of the rail network in Tunisia’s mining basin, where persistent technical failures continue to hamper the delivery of ore to processing and export hubs.
The 30-year financing includes a four-year grace period and carries a fixed interest rate of 3.75%. Funds will be deployed by the Tunisian National Railway Company (SNCFT), with priority given to Line 21, a 129-kilometer stretch between Gabes and Gafsa.
The program also covers Lines 5, 14, and 17, which connect the southern industrial poles of Gabes, Gafsa, and Sfax.
A growing pool of donors
The AFESD joins other development partners already backing the project. The Saudi Fund for Development mobilized $55 million in June 2024, while the Kuwait Fund for Arab Economic Development contributed $32.6 million in July 2025.
Reviving a critical but strained asset
The financing agreement dates back to October 16, 2025, signed between the Tunisian state and AFESD as part of a broader modernization program for the phosphate-dedicated rail network.
The initiative aims to rehabilitate and develop nearly 190 kilometers of track across the Gafsa, Gabes, and Sfax regions, the heart of Tunisia’s mining activity. The total program cost is estimated at roughly $165.5 million (about 500 million Tunisian dinars). The project also includes the construction of a pre-stressed concrete sleeper factory, essential for long-term network renewal.
Technical assistance built in
The package integrates a technical assistance component to support project implementation, strengthen management capacity, and improve overall network performance. The goal is to restore rail reliability, currently operating at only about half of its potential and bring back competitiveness to Tunisia’s entire phosphate value chain.
