2025-11-13
Tunisia, World Bank Sign $430 Million Energy Transition Deal
Tunisia and the World Bank have signed a $430 million financing agreement to support the Tunisia Energy Reliability, Efficiency, and Governance Improvement (TEREG) project, aimed at modernizing the country's energy sector, enhancing energy security, and ensuring the sustainability of electricity services.
The five-year program includes $30 million in concessional financing and aims to help the Tunisian government deliver a sustainable, reliable, and affordable electricity supply by accelerating renewable energy deployment, strengthening the performance of the national electricity utility (STEG), and improving overall sector governance.
Aligned with the government's updated Energy Transition Strategy, the TEREG project seeks to boost STEG's operational and financial efficiency, attract private investment, and reduce the carbon intensity of power generation, while ensuring reliable access to electricity for households and businesses. It also supports ambitious reforms to promote renewable energy use, enhance energy efficiency, and modernize the national electricity grid.
"By fostering renewable energy development, TEREG will strengthen Tunisia's position in clean energy, create new economic opportunities, and ensure long-term energy security," said Alexandre Arrobbio, World Bank Country Manager for Tunisia. "This project reflects our strong partnership with Tunisia and supports its sustainable development goals. It builds on our long-standing engagement in Tunisia's energy sector and complements ongoing initiatives such as the Tunisia-Italy Electricity Integration Project (ELMED), the Energy Sector Improvement Project, and advisory services from the International Finance Corporation (IFC) and the Multilateral Investment Guarantee Agency (MIGA). It is also aligned with Tunisia's Country Partnership Framework and its commitments under the Paris Agreement."
The TEREG program is expected to mobilize around $2.8 billion in private investment to add 2.8 gigawatts of new solar and wind capacity by 2028 and create more than 30,000 jobs, primarily during the construction phase of renewable projects. It is also projected to reduce electricity supply costs by 23%, raise STEG's cost recovery rate from 60 to 80%, and cut energy subsidies by approximately 2.045 billion Tunisian dinars from the state budget.
The five-year program includes $30 million in concessional financing and aims to help the Tunisian government deliver a sustainable, reliable, and affordable electricity supply by accelerating renewable energy deployment, strengthening the performance of the national electricity utility (STEG), and improving overall sector governance.
Aligned with the government's updated Energy Transition Strategy, the TEREG project seeks to boost STEG's operational and financial efficiency, attract private investment, and reduce the carbon intensity of power generation, while ensuring reliable access to electricity for households and businesses. It also supports ambitious reforms to promote renewable energy use, enhance energy efficiency, and modernize the national electricity grid.
"By fostering renewable energy development, TEREG will strengthen Tunisia's position in clean energy, create new economic opportunities, and ensure long-term energy security," said Alexandre Arrobbio, World Bank Country Manager for Tunisia. "This project reflects our strong partnership with Tunisia and supports its sustainable development goals. It builds on our long-standing engagement in Tunisia's energy sector and complements ongoing initiatives such as the Tunisia-Italy Electricity Integration Project (ELMED), the Energy Sector Improvement Project, and advisory services from the International Finance Corporation (IFC) and the Multilateral Investment Guarantee Agency (MIGA). It is also aligned with Tunisia's Country Partnership Framework and its commitments under the Paris Agreement."
The TEREG program is expected to mobilize around $2.8 billion in private investment to add 2.8 gigawatts of new solar and wind capacity by 2028 and create more than 30,000 jobs, primarily during the construction phase of renewable projects. It is also projected to reduce electricity supply costs by 23%, raise STEG's cost recovery rate from 60 to 80%, and cut energy subsidies by approximately 2.045 billion Tunisian dinars from the state budget.
Source: GULF TIMES