The World Bank and Tunisia have concluded a financing agreement to support Tunisia’s energy sector modernisation agenda through the Tunisia Energy Reliability, Efficiency, and Governance Improvement Program.
This five-year programme, valued at $430 million— including $30 million in concessional financing — aims to support the Tunisian government in delivering a sustainable, reliable, and affordable electricity supply by accelerating renewable energy deployment, strengthening the performance of the national electricity utility, and enhancing overall sector governance.
Aligned with the Tunisian government’s updated Energy Transition Strategy, TEREG aims to strengthen STEG’s operational and financial performance, attract private investment, and lower the carbon intensity of power generation, all while ensuring reliable electricity access for households and businesses.
It supports ambitious reforms to accelerate renewable energy deployment, enhance energy efficiency, and modernise the electricity sector.
“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.
Arrobbio said, “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 like the Tunisia-Italy Electricity Integration Project (ELMED), the Energy Sector Improvement Project, and advisory services from the International Finance Corporation and the Multilateral Investment Guarantee Agency, aligning with Tunisia’s Country Partnership Framework and its commitments under the Paris Agreement.”
The TEREG program is expected to support Tunisia in achieving its goal of mobilising $2.8 billion in private investment to add 2.8 gigawatts of new solar and wind capacity by 2028, and creating over 30,000 jobs, primarily during the construction phase of renewable projects. It will also help reduce electricity supply costs by 23 per cent, improve STEG’s cost recovery from 60 to 80 per cent, and reduce subsidies by TND 2.045 billion.
“This is the first project to benefit from the World Bank’s Framework for Financial Incentives, receiving rewards for its size and long-term benefits in recognition of its impact on reducing greenhouse gas emissions,” said Amira Klibi, Senior Energy Specialist at the World Bank and Task Team Leader for the project.
Klibi added, “The programme’s reforms—such as reducing technical and commercial losses and increasing the share of renewables—are expected to deliver lasting improvements in the operational and financial performance of the sector, making electricity more affordable and reliable for households and businesses across Tunisia.”
