TUNISIA – The World Bank has approved two loans worth US$520 million to fund projects in Tunisia in a bid to scale up cereal production and enhance regional connectivity.
“The two loans are in line with the World Bank’s strategic partnership with Tunisia for the period 2023-2027, which aims to strengthen human capital and increase economic opportunities throughout the country,” said Alexandre Arrobio, World Bank Resident Representative in Tunisia.
Arrobio explained that the first loan, worth US$300M, is earmarked for the Emergency Food Security Response Project.
Since its inception in June 2022, the Emergency Food Security Response Project has been instrumental in enhancing Tunisia’s grain sector. With the injected funding, this initiative seeks to mitigate the impact of consecutive years of drought in Tunisia, particularly to boost cereal production.
The project aims to rationalize wheat imports, support small farmers, and provide climate-resilient seeds for wheat producers.
The second loan, totalling US$220 million, focuses on the Tunisia Economic Development Corridor project.
This initiative aims to address regional economic disparities along the Kasserine – Sidi Bouzid – Sfax corridor by investing in infrastructure development.
With a focus on roadworks and feeder road upgrades, the project seeks to enhance physical access, particularly for households reliant on road connectivity, and improve access to finance for small and medium-sized enterprises (SMEs) through the Capitalization of the Deposit and Consignment Fund’s (CDC) Impact Fund.
Alexandre emphasized the alignment of these projects with Tunisia’s national strategies and the World Bank’s commitment to strengthening human capital and fostering economic opportunities across the country.
The loan approval comes after Tunisia, recently, signed funding contracts worth 8.71 million euros (US$9.4 million) from the Italian Agency for Development Cooperation (AICS) to boost cultivation of cereals.
The financial boost was provided by the European Union (EU) as part of the “Support for Sustainable Development in the Agriculture and Artisanal Fishing Sector in Tunisia (ADAPT)” program implemented over the period 2020-2028.
According to the agreements, this funding is intended to subsidize the cultivation of cereals during the agricultural seasons of 2023/2024 and 2024/2025.
The subsidies would be distributed by the signatory collectors to more than 3,000 Tunisian cereal farmers, in the form of discounts on inputs, services and agricultural equipment. The stated ambition is to help small farmers reduce their production costs.
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