The World Bank has approved a major $430 million financing package to support the Tunisian government’s ambitious plan to overhaul its energy sector, aiming to boost renewable power, fix its struggling state utility, and reduce crippling electricity costs.
The five-year program, named the Tunisia Energy Reliability, Efficiency, and Governance Improvement Program (TEREG), is designed to accelerate the country’s transition to cleaner energy sources while addressing long-standing issues of reliability and affordability for households and businesses.
A central goal of the initiative is to strengthen the operational and financial health of the national electricity company, STEG, and to attract billions in private investment. The program aligns with Tunisia’s updated national strategy to lower the carbon footprint of its power generation.
“By fostering renewable energy development, TEREG will strengthen Tunisia’s position in clean energy, creating economic opportunities and ensuring long-term energy security,” said Alexandre Arrobbio, World Bank Country Manager for Tunisia.
The TEREG program sets bold targets for the nation’s energy future. Officials project it will help mobilize $2.8 billion in private investment to add 2.8 gigawatts of new solar and wind capacity by 2028. This construction boom is expected to create over 30,000 jobs.
For Tunisian citizens and the economy, the program promises significant financial benefits. It aims to reduce electricity supply costs by 23 percent and improve STEG’s cost recovery, which would in turn cut government energy subsidies by over 2 billion Tunisian dinars (TND).
A notable aspect of the loan is that $30 million is concessional financing, and it is the first World Bank project in Tunisia to benefit from a new framework that rewards programs for their impact on reducing greenhouse gas emissions.
“The program’s reforms are expected to deliver lasting improvements… making electricity more affordable and reliable for households and businesses across Tunisia,” said Amira Klibi, Senior Energy Specialist at the World Bank and the project’s Task Team Leader.
This new program builds upon the World Bank’s continued engagement in Tunisia’s energy sector, complementing other major initiatives like the Tunisia-Italy Electricity Integration Project (ELMED).
TunisianMonitorOnline (BRC)
