EBRD Provides €45 Million To Support Tunisia’s Energy Transition And Decarbonisation

The European Bank for Reconstruction and Development (EBRD) is providing a €45 million financing package to Société Tunisienne de l’Electricité et du Gaz (STEG) to aid the energy transition and decarbonisation of Tunisia’s energy sector.

This funding will assist STEG in constructing the ELMED project, a 600 MW high-voltage direct-current submarine interconnection cable spanning 200 km, connecting the electricity transmission networks of Tunisia and Italy by 2028. The project, with a total cost of €920 million, is also supported by a €307.6 million investment grant from the European Union’s (EU) Connecting Europe Facility (CEF). The EBRD’s financing is specifically dedicated to the construction of the Tunisian side of the ELMED interconnector and is part of a larger €125 million loan package co-financed by the European Investment Bank (EIB) and Kreditanstalt für Wiederaufbau (KfW). Additionally, the World Bank is financing the converter station and associated transmission infrastructure in Tunisia.

The ELMED project, implemented jointly by STEG and TERNA, the Italian transmission system operator, aims to integrate the European and North African electricity grids and accelerate renewable energy development in Tunisia.

With an accompanying €5 million grant from the EU Neighbourhood Investment Platform, the EBRD’s financing includes a comprehensive technical cooperation package for policy dialogue. This will support the regulatory setup to operationalise and commercialise the ELMED interconnector. It will also promote the development of a decarbonisation roadmap for Tunisia’s energy sector, ensuring alignment with the Paris Agreement and developing a guarantee-of-origin scheme crucial for achieving decarbonisation targets.

STEG, Tunisia’s state-owned national electricity and gas utility company established in 1962, produces and distributes electricity and natural gas. It is also the sole off-taker of private renewable energy in the country.

Since 2012, the EBRD has invested more than €2.3 billion in 73 projects in Tunisia and supported approximately 2,000 small and medium-sized local enterprises through EU-funded technical assistance.