• Parliament approves $52 million loan from Arab development fund
• Funding targets rail upgrades critical to phosphate transport
• Output has fallen sharply due to aging infrastructure and delays

Tunisia has approved a $52 million loan to upgrade rail infrastructure used to transport phosphate, a key step in efforts to restore output in a struggling sector.

The Parliament’s finance and budget committee signed off on the financing on Thursday, March 26. The loan, equivalent to 16 million Kuwaiti dinars, was agreed with the Arab Fund for Economic and Social Development (AFESD) and signed on October 16, 2025.

The funding will support the modernization of rail lines used to move phosphate, as authorities try to address long-standing logistical bottlenecks. These constraints have cut the country’s production and export capacity by nearly half.

The state-owned Compagnie des phosphates de Gafsa (CPG) reflects the scale of the problem. In 2025, the company operated at just 40% of its capacity, producing about 3.9 million tons, down from nearly 8 million tons in 2011.

One of the main issues is the aging fleet of rail wagons, which has slowed the transport of phosphate to processing facilities. The AFESD loan will help complete railway line 21, which stretches 129 kilometers and is part of a broader network upgrade.

That wider program is split into two phases. The first, estimated at $138 million, involves renewing 190 kilometers of track across lines 5, 14, 17, and 21. Technical studies are complete, and a tender process that closed on March 24, 2026, clears the way for construction to begin.

The second phase, valued at $546 million, includes rehabilitating another 415 kilometers of track, upgrading tunnels and stations, and installing a modern signaling system. Plans also include building a maintenance center and acquiring specialized equipment.

Beyond improving phosphate logistics, the project is expected to support the national railway company, SNCFT, which generates about 40% of its revenue from transporting the resource.

However, key challenges remain, including meeting construction deadlines and securing additional financing needed to complete the full program.

Henoc Dossa