Tunisia has approved a US$52 million loan to upgrade rail infrastructure critical to the transport of phosphate, a move aimed at boosting output in a sector hampered by aging equipment and logistical bottlenecks.
The country’s Parliament endorsed the financing on March 26, following an agreement with the Arab Fund for Economic and Social Development (AFESD) signed on October 16, 2025. The loan, equivalent to 16 million Kuwaiti dinars, will fund the completion of railway line 21, a 129-kilometer section essential for moving phosphate from mines to processing facilities.
Authorities said the investment is part of a broader plan to modernize Tunisia’s phosphate transport network, addressing a persistent decline in production. State-owned Compagnie des phosphates de Gafsa (CPG), the main producer, operated at only 40% of capacity in 2025, producing roughly 3.9 million tons compared with nearly 8 million tons in 2011.
One of the main obstacles has been an aging fleet of rail wagons and outdated track infrastructure, which have slowed shipments and limited export potential. “Upgrading our rail lines is a critical step to restore the sector’s competitiveness,” said a senior official at the Ministry of Transport.
The wider modernization program is divided into two phases. The first phase, valued at $138 million, involves renewing 190 kilometers of track across lines 5, 14, 17, and 21. Technical studies are complete, and a tender process closed on March 24, 2026, clearing the way for construction to commence.
The second phase, estimated at $546 million, will rehabilitate an additional 415 kilometers of track, upgrade tunnels and stations, and install a modern signaling system. Plans also include building a dedicated maintenance center and acquiring specialized equipment to support efficient phosphate transport.
Beyond phosphate logistics, the project is expected to strengthen Tunisia’s national railway company, Société Nationale des Chemins de Fer Tunisiens (SNCFT), which derives around 40% of its revenue from transporting phosphate. Analysts said improved rail efficiency could also lower operational costs and enhance the country’s export competitiveness.
The phosphate sector remains a cornerstone of Tunisia’s economy, generating substantial foreign exchange revenue and supporting thousands of jobs. However, years of underinvestment have constrained output and caused export delays, prompting calls for urgent infrastructure upgrades.
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While the AFESD loan marks a significant step, officials acknowledge challenges ahead. Completing construction on time and securing additional funding for the full modernization program will be essential to achieving the desired productivity gains.
Experts noted that modernizing rail networks for bulk commodities is critical in Tunisia and across North Africa, where inefficient logistics often undermine natural resource sectors. “Transport bottlenecks directly impact production volumes and export revenues,” said a Tunis-based economist specializing in mining logistics. “Upgrading rail infrastructure is a strategic investment with long-term benefits for the phosphate industry and national economy.”
The phosphate rail program also aligns with Tunisia’s broader efforts to enhance industrial infrastructure and attract foreign investment. By improving supply chains and reducing transit delays, the country aims to restore its position as a leading phosphate exporter in the Mediterranean and African markets.
As phosphate demand remains strong globally, particularly in agricultural and industrial applications, Tunisian authorities hope the rail modernization project will help recapture lost market share and boost the sector’s long-term sustainability.
The government emphasized that timely implementation and effective oversight will be crucial. With construction now set to begin on the initial phase, authorities remain focused on mobilizing resources, coordinating contractors, and ensuring the railway upgrade delivers measurable improvements in production and transport efficiency.
