Tunisian Economy Receives Boost with Two Key Loan Projects
Yesterday, the Finance and Budget Commission of the Tunisian People's Assembly (ARP) examined two crucial loan projects for the Tunisian economy. At the heart of the debates was the approval of a financing contract with the European Investment Bank (EIB) to create a credit line in favor of small and medium-sized enterprises (SMEs). Another project involved a loan agreement with the Italian government to support the state budget.
Support for SMEs: A New Impetus for the Economy
The Minister of Finance presented the details of these loans, highlighting their role in the reform support program. This program aims to improve the transportation, energy, and water sectors, with a particular focus on energy development. The Italian loan is particularly advantageous, with a 0% interest rate and a 40-year repayment period, including 31 years of grace.
This financing is part of a series of reforms to reduce energy subsidies and encourage investments in alternative energies such as green hydrogen, solar, and wind power.
SME Support: A New Boost for the Economy
The second loan project aims to support SMEs, a vital pillar of the Tunisian economy. The Minister explained that the EIB loan ranges from 150,000 to 15 million dinars. This financing is intended for businesses employing fewer than 250 workers (70% of the amount) and medium-sized enterprises employing between 250 and 3,000 workers (30% of the remaining amount). Particular attention is given to projects promoting social inclusion, such as gender equality, youth employment, and green economy.
To be eligible, businesses must have a clear strategy and not have received state support during the COVID-19 pandemic. They must also have a good post-pandemic rating and an acceptable debt percentage.
Deputies Express Concerns
Deputies expressed concerns, particularly regarding the use of the loan for budget support. They emphasized the importance of SMEs, which provide around 40% of employment. One deputy raised doubts about the eligibility criteria, noting that 80% of SMEs are in financial difficulty and may not benefit from this support.
The Minister responded that the number of employees should not be a decisive criterion, as some small businesses are more profitable than larger ones. She clarified that the definition of SMEs in this loan project is that used by the funding agency.
The Future
Representatives from the Central Bank specified that the EIB only finances 50% of the project cost, with the remainder to be found through other means. They highlighted the importance of restructuring many banks to mobilize the necessary financing.
The Minister affirmed that the EIB loan is not intended for budget support. It will be disbursed in 10 tranches, each subject to prior conditions, such as submitting a framework letter and establishing a project management unit within the Central Bank of Tunisia.