U.S. will grant Tunisia $500 million in aid- Tunisian minister

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TUNIS (Reuters) - The United States will grant Tunisia $500 million in aid to finance infrastructure and other projects and talks are also advanced on a loan guarantee, Tunisian finance minister Ali Kooli told Reuters on Monday.

"Our visit to Washington was important and fruitful with International Monetary Fund, World Bank and American officials", said Kooli, who was in Washington to start discussions about a new loan program with the IMF.

Tunisia, which has seen its debt burden rise and economy shrink by 8.8% last year in real terms, has started talks with the IMF to seek a financial assistance package.

Kooli said the Millennium Challenge Corporation (MCC), a U.S. government foreign assistance agency, will finance projects in the transport and water sector and to support rural women.

Kooli did not give further details. In January he told Reuters in interview that Tunisia was seeking a U.S. loan guarantee worth $1 billion to issue bonds.

Tunisia, which adopted democracy after its 2011 revolution, had suffered years of economic stagnation, declining public services and worsening living standards even before the pandemic, causing widespread anger and frustration. Protests took place across the country in January.

(Reporting By Tarek Amara; Editing by Toby Chopra)