Saudis will lend Tunisia $500m, finance projects

TUNIS: Saudi Arabia will lend Tunisia $500 million at a favourable interest rate and will inance two projects worth $140 million, two sources told Reuters on Wednesday.

The Saudi crown prince was received by President Beji Caid Essebsi, who awarded him the republic’s medal, the highest oficial award. Tunisia has struggled economically and is hungry for foreign funding.

“Tunisia will announce in a few days important deals with Saudi, including a loan with low interest rate, agreements on investment and other important details,” Nourredine Ben Ticha, an advisor to the president, told state television.

Two Tunisian sources - an oficial and a source close to the discussions between Prince Mohammed and Essebsi - told Reuters that the loan would be worth $500 million. They said that the Saudi Development Fund will also inance two projects worth about $140 million, but did not give more details.

Tunisia is struggling to cut its budget deicit, stabilise falling foreign currency reserves and manage expectations of international lenders demanding reforms such as trimming the public wage bill.

Tunisia’s economy has been in turmoil since autocrat Zine Al-abidine Ben Ali was toppled in a 2011 uprising sparked by anger at unemployment, poverty and record levels of inlation.

Under pressure from the international Monetary Fund, Prime Minister Youssef Chahed has aimed to cut the budget deicit to about 4.9 per cent of GDP this year from 6.2 per cent last year.

The crown prince told Tunisian state television that Saudi Arabia has long had good relations with Tunisia: “I cannot come to North Africa without visiting Tunisia ... tunisia’ s president is like my father.”