- The World Bank and Tunisia signed a US$430 million deal to modernise the energy sector through the TEREG program.
- The initiative will expand renewable energy sources, enhance utility performance, attract private investment, and reduce energy costs and emissions.
The World Bank and the Tunisian government have signed a $430 million financing agreement to modernise Tunisia’s energy sector and accelerate its clean energy transition, the Bank said on Monday.
The five-year Tunisia Energy Reliability, Efficiency, and Governance Improvement Program (TEREG) includes $30 million in concessional financing and aims to deliver a sustainable, reliable, and affordable electricity supply. The programme will support the expansion of renewable energy, strengthen the performance of the national electricity utility, STEG, and improve overall sector governance.
Aligned with Tunisia’s updated Energy Transition Strategy, TEREG will enhance STEG’s operational and financial performance, attract private investment, and reduce the carbon intensity of power generation while ensuring reliable electricity access for households and businesses.
“By fostering renewable energy development, TEREG will strengthen Tunisia’s position in clean energy, create economic opportunities, and ensure long-term energy security,” said Alexandre Arrobbio, World Bank Country Manager for Tunisia.
Arrobbio said the initiative reflects the Bank’s strong partnership with Tunisia and complements existing projects such as the Tunisia-Italy Electricity Integration Project (ELMED) and the Energy Sector Improvement Project, in line with Tunisia’s Country Partnership Framework and Paris Agreement commitments.
The programme aims to mobilise $2.8 billion in private investment to add 2.8 gigawatts of new solar and wind capacity by 2028, creating more than 30,000 jobs, mainly during the construction phase of renewable energy projects. It is also expected to cut electricity supply costs by 23 per cent, raise STEG’s cost recovery rate from 60 to 80 per cent, and reduce state subsidies by TND 2.045 billion.
“This is the first project to benefit from the World Bank’s Framework for Financial Incentives, earning rewards for its long-term impact in reducing greenhouse gas emissions,” said Amira Klibi, World Bank Senior Energy Specialist and Task Team Leader for TEREG.
Klibi said the programme’s reforms, targeting lower technical and commercial losses and a greater share of renewables, will deliver lasting improvements in Tunisia’s power sector, making electricity more reliable and affordable for homes and businesses.