Tunisia plans to obtain $185 million loan from the Islamic Development Bank for its projects

Tunisia looks to obtain a loan from the Islamic Development Bank (IDB), following the international financial institution’s agreement to aid the country’s development.

According to an unstated official who informed Reuters about the deal, the IDB agreed on Sunday to lend Tunisia $185 million to finance developments that includes an electricity project, as electricity in the country is generated almost exclusively from combustible fossil fuels including 91% natural gas, 6% heavy fuel with only a tiny share left to renewables.

The multilateral development financing institution has not only agreed to help the country finance an electricity link worth $150 million, but also intends to lend Tunisia the fund needed for the construction of hospitals in Kasserine and Kef worth $34 million.

Developing the health sector has been a key priority for Tunisian governments since the country gained independence from France in 1956. Today, the North African country’s 11.4 million people have 166 hospitals and 2100 health centres to attend to them, according to official figures. However, public health services have deteriorated since the 1990s and are failing to meet modern demand, according to a report last year by the health section of the Tunisian General Labor Union  (Union Générale Tunisienne du Travail; UGTT).

Documents which would legalize the loan agreement is scheduled to be signed by representatives from both parties involved as Tunisia’s Minister of Development, Mohamed Fadhel Abdelkefi, and the President of the bank, Ahmed Mohamed Ali Al-Madani will cement the deal on Thursday, Reuters reported.

For an economy whose growth historically has depended on oil, phosphates, agri-food products, car parts manufacturing, and tourism, Tunisia is in the process of economic reform and liberalization after decades of heavy state direction and participation in the economy, as prudent economic and fiscal planning have resulted in moderate but sustained growth for over a decade.