Saudi Arabia to give Tunisia $500 million as soft loan and grant

TUNIS/DUBAI (Reuters) – Saudi Arabia said on Thursday it will give Tunisia a $400 million as a soft loan and a 100 million as a grant to help it fix its ailing public finances, pledging more financial support in coming weeks.

Tunisia is on the edge of a debt crisis and is suffering from shortages of essential goods. Most debt is internal but foreign loan repayments are due later this year and credit ratings agencies have said Tunisia may default.

“We will continue to support Tunisia in the coming weeks to provide additional support from the Saudi Development Fund and development funds in the Gulf.”, Saudi Arabian finance minister Mohammed Al-Jadaan said after a meeting with Tunisia’s President Kais Saied.

The Saudi minister and Tunisian finance minister Sihem Boughdiri signed an agreement over a soft loan of $400 million and a grant of $100 million.

Tunisia is seeking to secure funds from the Gulf states after talks on a $1.9 billion loan have been stalled since October when Tunisia and the IMF reached a preliminary agreement.

(Reporting by Tarek Amara and Nayera Abdallah; Editing by Andrew Cawthorne and Angus MacSwan)