"Tunisia faces a major grain supply shock due to difficulties in accessing financial markets and rising global prices which affected the ability to procure imported grain," said the World Bank's Tunisia country manager Alexandre Arrobbio.
The World Bank loan package is aimed "to lessen the impact of the Ukraine war by financing vital soft wheat imports and providing emergency support to cover barley imports for dairy production," the lender said.
The World Bank said its loan program was "expected to reduce import dependency through incentives to sustainably increase domestic grain production," the World Bank said.
It would also help buy "seeds for smallholder farmers for the upcoming planting season," it said in a statement late Tuesday.
In April the government unveiled a program to support farmers with access to better seeds, technical assistance and state-backed loans in a push to boost its self-sufficiency in grains.
The loan approved Wednesday aims to ensure "affordable bread for the poor, barley for livestock, and agricultural inputs for domestic grain production," the World Bank said.
Last year Tunisia imported 60 percent of its soft wheat, used for bread, and 66 percent of its barley from the Russian Federation and Ukraine.
In April the government unveiled a program to support farmers with access to better seeds, technical assistance and state-backed loans in a push to boost its self-sufficiency in grains.
Tunisia is expected to start formal talks with the International Monetary Fund in the coming weeks for a bailout package of around two billion euros, in exchange for "ambitious reforms" to rein in public spending and reform state-owned companies.