Japan to lend Tunisia $480m to support transition

Arab World Materials 12 March 2014 09:17 (UTC +04:00)
Japan to lend Tunisia $480m to support transition
Japan to lend Tunisia $480m to support transition

Japan has agreed to lend Tunisia 750 million dinars ($480 million) to support the transition to democracy in the North African country where the Arab Spring began, Deputy Foreign Minister Akitaka Saiki said on Tuesday Al Arabia reported.

The money, which will be split into two loans, will be allocated to finance infrastructure and energy projects in Tunisia, which is struggling to revive its economy.

A caretaker government has taken over to run Tunisia until elections later this year, ending months of crisis. But despite political progress, high living costs and a lack of economic opportunities remain the major concerns for many Tunisians.

"Japan agreed to lend Tunisia 750 million dinar and we will continue to support Tunisia's transition'', Saiki said after meeting Tunisian president.

Tunisia plans to issue around $2 billion in foreign bonds including $1 billion with guarantees from Japan, Chadli Ayari, the central bank governor, told Reuters in interview last month.

Tunisia has already secured $1.2 billion in loans from the World Bank and another $500 million from the International Monetary Fund earlier this year.

The European Investment Bank (EIB) will lend Tunisia 500 million euros ($690 million) to support its democratic transition in 2014, EIB Vice President Philippe de Fontaine told Reuters last week.

Tunisian Prime Minister Mehdi Jomaa said this month that external borrowing needs this year would be nearly double previous budget estimates at around $8 billion, mainly because of rising public sector pay.

The North African country's economy relies heavily on European tourism and is still recovering from the aftermath of its political upheaval three years ago.