• Tunisia approves $51.9 million loan for rail upgrade
• Output drops to 3.9 mln tonnes, 40% of capacity
• Project targets export growth and SNCFT finances

Tunisia’s parliament finance and budget committee approved on Thursday a 16 million Kuwaiti dinar loan agreement, worth about $51.9 million, with the Arab Fund for Economic and Social Development (AFESD). Signed on Oct. 16, 2025, the financing will support the modernization of railway infrastructure used for phosphate ore transport.

The investment aims to improve the sector’s logistics, which have seen a sharp decline in operational capacity. According to Tunisian authorities, these constraints have reduced the country’s production and export potential by nearly half. The Gafsa Phosphate Company (CPG) highlights the scale of the problem. In 2025, it operated at just 40% of capacity, producing an estimated 3.9 million metric tons, compared with nearly 8 million in 2011.

A key factor behind the decline is delays in renewing the wagon fleet, which have slowed ore transport to processing facilities. The AFESD loan will help complete railway line 21, a 129-kilometer route, as part of a broader two-phase network modernization program.

Financial and timeline challenges

The first phase, valued at $138 million, covers the renewal of 190 kilometers of track across lines 5, 14, 17 and 21. Technical studies have been completed, and a tender process that closed on Tuesday, March 24, 2026, paves the way for construction to begin.

The second phase, valued at $546 million, includes the rehabilitation of an additional 415 kilometers of track, the modernization of tunnels and stations, and the installation of a signaling system. The program also предусматриes the construction of a maintenance center and the procurement of specialized equipment.

Beyond improving the phosphate supply chain, the project is expected to strengthen the financial position of Tunisia’s national rail company (SNCFT), where phosphate transport accounts for about 40% of revenue.

Several issues remain unresolved, including construction timelines and securing additional financing.

Henoc Dossa