Power Sector Transition in Tunisia

This article is part of the Global Energy Transition Tracker project sponsored by Global Energy Monitor

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Introduction

The Government of Tunisia is taking steps to diversify its energy generation mix by bringing on hydropower and solar energy. As one of the most climate vulnerable Mediterranean countries, Tunisia's electrical system is expecting increased demand resulting from expanding peak-hour demand patterns, intensifying cooling needs stemming from greater warm spells, and increasing desalination needs. Existing generation and transmission infrastructure is ill-equipped to handle this change in demand, and current systems are at risk of failures and worsened power outages. Decreased precipitation and shifting rainfall patterns may also increase strain on existing hydropower generation capabilities.

Three key drivers will dictate Tunisia's energy transition: energy security, given Tunisia's growing energy balance deficit; economics, given the relative decrease in the price of renewables; and environment, given the Country's commitment to reduce domestic greenhouse gas emissions.

To achieve Tunisia's renewable energy goals, the International Renewable Energy Agency recommends eight key actions:

1. Establish a renewable energy planning and scheduling framework
2. Enhance renewables resources assessment through zoning
3. Simplify procurement procedures for power grid development
4. Clarify institutional roles and strengthen human resources
5. Establish an independent electric power regulator
6. Operationalize the Energy Transition Fund
7. Create a dedicated financing mechanism for solar water pumping
8. Involve local banks in the financing of renewable energy

Current System Description

In 2020, natural gas made up 86% of Tunisia's installed capacity and 95% of power generation, while renewable energy made up 13% of installed capacity and 5% of power generation.

Current Power Capacity Mix

Fossil fuels represent the majority of Tunisia's electricity generation mix (approximately 97%), with natural gas being the primary fuel source. In 2021, the Country imported nearly 45% of their natural gas need, primarily from Algeria.

2019: Total energy supply of Tunisia. That year, Tunisia imported 74% of its total supply. Source: IRENA.

2021: Installed renewable energy generation in Tunisia. Source: IRENA.

According to Global Energy Monitor, Tunisia has a generating capacity of 6,079 MW total, comprised of oil and natural gas (5,771 MW), solar (55 MW), and onshore wind (253 MW).

Prospective Capacity Mix

Prospective Energy Projects in Tunisia

Project	Generation	Status	Capacity (MW)
Tabarka Hydroelectric Plant	Hydropower	Pre-Construction	400
Skhira 1 Power Station	Natural Gas	Pre-Construction	450
Skhira 2 Power Station	Natural Gas	Pre-Construction	450
ABO Wind Gabes solar farm	Solar	Pre-Construction	10
Al-Mazzunah solar farm	Solar	Pre-construction	162
Borj Bourguiba Solar PV Plant	Solar	Pre-Construction	200
Gabes Solar Plant	Solar	Construction	10
Gabes Sud Solar Plant	Solar	Construction	10
Gafsa Solar Plant, Units 1 and 2	Solar	Pre-Construction	220
Kairouan Solar Plant	Solar	Construction	100
Oudref Solar Farm	Solar	Pre-Construction	200
STEG Solar Farm, Units 1-8	Solar	Announced	800
Sidi Bouzid Solar Plant 2	Solar	Construction	50
Tatouine Solar Plant, Unit 2	Solar	Construction	200
Tozeur Solar Farm	Solar	Construction	50
TuNur Solar Farm, all phases	Solar	Pre-Construction	4,500
Chenenni Wind Farm	Wind	Pre-Construction	75
Sidi Mansour Wind Farm	Wind	Construction	30
STEG Wind Farm, Units 1-7	Wind	Announced	525
Total			8,442

Renewables in Tunisia

Renewable Targets

In 2022, Tunisia increased its renewable energy target to 35% of total energy generation by 2030. To achieve this goal, the Country plans to invest TND 900 million/year (~USD $294 million/year) to develop more than 4 GW of renewable energy projects by 2030.

The Tunisian Solar Plan (TSP) outlines the following renewable energy installed capacity targets by 2030:

• 1,755 MW of wind
• 1,510 MW of solar PV
• 450 MW of concentrated solar power

In additional, the TSP also calls for 100 MW of bioenergy by 2030, which Tunisian officials classify as a renewable energy source.

Tunisia's 2021 update the its Nationally Determined Contribution created a conditional target of 45% greenhouse gas reduction by 2030, relative to 2010 levels, as well as an unconditional reduction of 27% by the same year and levels.

Major Renewable Projects

In 2023, the Government of Tunisia released a call for bids for 1,700 MW in renewable energy projects, including eight new 100-MW solar projects, as well as eight new 75-MW wind farms. The investments are estimated to be worth TND 5 billion (USD $1.6 billion) and follow 500-MW worth of solar projects awarded in 2022.

Operating Renewable Energy Projects in Tunisia

Project	Generation	Capacity (MW)	Status
Elgordhab Solar Farm	Solar	10	Operating
Tozeur (Tunisian Electricity and Gas Co.) solar farm I	Solar	10	Operating
Tozeur (Tunisian Electricity and Gas Co.) solar farm II	Solar	10	Operating
Bizerte Kchabta Wind Farm I	Wind	60	Operating
Bizerte Kchabta Wind Farm II	Wind	34	Operating
Bizerte Métline Wind Farm I	Wind	60	Operating
Bizerte Métline Wind Farm II	Wind	34	Operating
Sidi Daoud Wind Farm I	Wind	11	Operating
Sidi Daoud Wind Farm II	Wind	34	Operating

Prospective Renewable Energy Projects in Tunisia

Project	Generation	Capacity (MW)	Status
Borj Bourguiba Solar PV Plant	Solar	200	Pre-Construction
Gafsa Solar Plant I	Solar	120	Pre-Construction
Gafsa Solar Plant II	Solar	100	Construction
Kairouan Solar Plant	Solar	100	Construction
Sidi Bouzid Solar Plant 2	Solar	50	Construction
Tataouine Solar Plant II	Solar	200	Construction
Tozeur Solar Farm	Solar	50	Construction
TuNur Solar Farm I	Solar	2250	Pre-Construction
TuNur Solar Farm II	Solar	250	Pre-Construction
TuNur Solar Farm III	Solar	2000	Pre-Construction
ABO Wind Gabes Solar Farm	Solar	10	Pre-Construction
Gabes Solar Plant	Solar	10	Pre-Construction
Gabes Sud Solar Plant	Solar	10	Pre-Construction
Mazarine Feriana Solar Farm	Solar	10	Pre-Construction
Medenine Solar Plant	Solar	10	Pre-Construction
Qudran Feriana Solar Farm	Solar	10	Pre-Construction
Sidi Bouzid Solar Plant	Solar	10	Pre-Construction
Batiha Wind Farm	Wind	30	Pre-Construction
Sidi Mansour Wind Farm	Wind	30	Construction
Tabarka Hydroelectric Plant	Hydroelectricity	400	Pre-Construction

Cancelled and Shelved Renewable Energy Projects in Tunisia

Project	Generation	Capacity (MW)	Status
Sidi Bouzid-Scatec Solar Farm	Solar	60	Shelved
Tataouine Solar Plant I	Solar	240	Shelved
Tozeur Solar PV Plant	Solar	60	Shelved
Jebel Kochbata Wind Farm	Wind	30	Shelved
Jebel Sidi Bchir Wind Farm	Wind	30	Shelved
Mornag Wind Farm	Wind	30	Shelved
Thala Wind Farm	Wind	60	Cancelled

Tunisia's total installed solar PV capacity, in kW. Source: IRENA.

Tunisia's annual hydropower production in GWh from 2005 to 2018. Source: IRENA.

Potential of Renewables

Photovoltaic Power Potential in Tunisia. Original licensing: 2020 The World Bank, Source: Global Solar Atlas 2.0, Solar resource data: Solargis.

Tunisia has significant solar potential given the country's high irradiance, ranging from 1800 kWh/m2 per year in the North to 2600 kWh/m2 per year in the South. This equals approximately 1,980 sunshine hours per year.

With a total area available for potential wind development estimated to be 32,200 square kilometers, Tunisia's gross land-based wind resource potential is approximately 8,000 MW. This is largely relegated to the north coast, center, and southern regions of the country.

Potential impacts from renewable expansion

The transition to renewable energy is crucial for decarbonizing Tunisia's energy system. However, the deployment of renewable projects requires greater local engagement. Initiatives sited on ancestral, agricultural, or culturally significant lands have encountered resistance, primarily stemming from concerns about land "dispossession" and inadequate compensation for local communities. Striking a balance between renewable energy adoption and respecting local interests is vital for a successful transition.

Renewable energy projects located on ancestral, agricultural, or otherwise significant land have received pushback, largely due to the process of land "dispossession" and a lack of compensation to locals. For example, beginning in the early 2000s, villagers in Borj Essalhi have stopped paying their electric bills to protest a wind farm located less than 50 meters from residential areas. Locals are demanding compensation for use of the land, which they claim was taken from them, as well as asking turbines to be moved further from their homes. Similarly, in Segdoud, collective agricultural lands have been taken by the State for a solar project called for in the 2015 Solar Plan, without compensation.

Other renewable energy projects facing pushback include:

Borj Essalhi: An 800-resident village that is now the site of an 75-MW wind farm. Beginning in the late 1990s, land was leased and/or forfeited to STEG for construction of the project, whose turbines are as close as 40 meters from residences. To make their frustrations known, residents staged a sit-in in 2018 and refused to pay their bills in protest, which has been followed by frequent power cuts to the area.

Segdoud: After collective agricultural lands were used for a 120-MW solar project, which was deemed a "public good," a lack of jobs and local development has left villagers questioning the project's overall benefits. The region has been experiencing high unemployment rates and marginalization in favor of the country's urban centers.

Tozeur: Two solar projects near Tozeur have received significant local pushback due to the water intensity of the plants' maintenance. Farmers in the area generally do not receive power from either plant despite their capacities being large enough to power over 40,000 homes. Given increasingly frequent droughts in the region, water scarcity is requiring farmers to pump groundwater to irrigate crops, which is an energy intensive process.

Bizerte: In 2010, wind projects in the governate were met with strong local opposition, largely due to disturbances related to construction and the lack of economic development benefits to communities. Operation was disrupted for six months following a series of attacks conducted in protest.

Fossil Fuels in Tunisia

Fossil Resources and Retirement

Tunisia has five gas and oil&gas fields in operation: Hasdrubal, Miskar, Nawara, Sabria, and Chouech Es Saida. While Tunisia produces natural gas (approximately 87,404.63 million cubic feet of natural gas per year, as of 2015), the majority of demand is met through energy imports from neighboring countries. Domestic energy production has decreased in the last two decades, due in large part to social and political unrest. Tunisia has 5,771 MW of natural gas in operation and 900 MW in the pre-construction phases of project development.

Overview of current fossil fuel impacts

Tunisia is a net importer of energy with nearly 45% of demand met through importing natural gas, largely from Algeria. Between 2020 and 2021, Tunisia's overall energy imports increased by 29.7%. This reliance on imported fuels renders Tunisia particularly vulnerable to shocks on the global energy market, which is felt directly by ratepayers already experiencing a rising cost of food, but also threatens energy security.

Employment

Widespread unemployment has been a persistent issue in Tunisia for decades. As a result, youth across are leaving Tunisia in great numbers to seek economic opportunities, largely in Europe.

In 2019, the national unemployment rate average was 15.3%, with Tataouine having the highest rate in the country at 28.7%. In response to high unemployment, in 2017, protestors staged a sit-in at the Kamour pumping station, resulting in an agreement stipulating that oil companies operating in Tataouine would be required to create at least 1,500 local jobs, as well as 3,000 additional jobs over three years. In 2020, protestors argued that only 2,500 jobs out of the full 4,500 were actually created.

While unemployment is high across the entire population, total unemployment for women in 2019 averaged 22.18%, compared to 12.27% for men.

Current employment by sector

2017: Employment across sex and economic activity in Tunisia. Data accessed through the International Labour Organization's ILOSTAT tool.

Prospective employment from the renewable energy sector

The African Development Bank estimates that in Tunisia, every 1,000 MW of annual generation yields approximately 3,000 jobs.

In March 2022, the Tunisian Government approved 500-MW worth of solar projects which, in total, are expected to reduce natural gas imports by 6% and generate 200 direct and 2,000 indirect jobs.

An estimated 8.1 million jobs in renewable energy could be created across the African continent by 2050 under the 1.5 degree C scenario. These jobs range across manufacturing, installation and maintenance, sales, decommissioning, and throughout the entire value chain.

Workforce Development

Several national bodies and academic institutions are actively anticipating upcoming workforce needs as part of Tunisia's energy transition. The National Centre for Continuous Vocational Training and Professional Promotion (Centre National de Formation Continue et de Promotion Professionnelle) manages federal funding allocated for professional development, amounting to 1.5% of tax revenues. The National Centre for Instructor Training and Training Development (Centre National de Formation de Formateurs et d’Ingénierie de Formation) and the Mechanical and Electrical Industries Technical Centre (Centre Technique des Industries Mécaniques et Electriques) are in charge of developing workforce development programming to build core skills required for a changing power system. Finally, the National Institute of Standardisation and Industrial Property (Institut National de la Normalisation et de la Propriété Industrielle) ensures that Tunisian national training and certifications systems adhere to industry-specific standards.

Tunisian wheat production averages from 2018-2020. Downloaded from the USDA Foreign Agricultural Service.

Tunisian barley production averages from 2018-2020. Downloaded from the USDA Foreign Agricultural Service.

Tunisian energy import dependency from 2010 through 2018. Source: IRENA.

Land availability

With a total land area of 63,170 square miles (approximately 164,000 square kilometers), Tunisia has the longest Mediterranean coastline in North Africa. Approximately 65% of Tunisia's land is considered arid or semi-arid as the Sahara Dessert encompasses over 30% of Tunisia's territory. Approximately 95% of Tunisia's arable land is affected by desertification to some degree. While there's potential for solar projects in the Sahara, it's crucial to carefully assess the scale of these endeavors to prevent adverse impacts on the desert ecosystem. Striking a balance between renewable energy development and environmental conservation is imperative for Tunisia's sustainable energy future.

Civil Society Engagement

El Kamour Protests: In April 2017, activists organized a sit-in at the Kamour pumping station, a key Saharan oil and gas transit point located near Tataouine, Tunisia. Frustrated with the region’s nearly 30% unemployment rate, protestors demanded: 1) a fair share of oil and gas revenues from the region, with 20% of that revenue invest in Tataouine, 2) 4,500 private sector jobs created for locals, and 3) $40 million in infrastructure and development funds from the Tunisian Government. In the two months following the sit-in, affiliated protests ranged from a few hundred to over 1,000 participants. The protests are considered notable due to their decentralized structure, concrete demands, and apparent openness to dialogue.

A growing number of organizations are involved in proliferating renewable energy throughout Tunisia, such as the New Generation for Development and Environment, Earth Hour Tunisia Association, and Tunisia Energy Society. Additionally, Renewable Energy Solutions for Africa (RES4Africa) is a philanthropic institution supporting UNDP Sustainable Development Goal 7 and ensure clean energy is affordable, accessible, sustainable, and reliable for all. RES4Africa convenes a network of members working in clean energy across Africa and Europe to advocate for clean energy investment opportunities, expand energy access, build knowledge, and support adoption of sustainable solutions.

The Tunisian General Labour Union (Union Générale Tunisienne du Travail, UGTT), the country's largest trade union, and the Tunisian Platform for Alternatives have been leading an effort to organize assemblies focused on the right to energy in local communities. The organizations are also working to establish energy cooperatives in southern Tunisia, which they believe better centers communities on the ground as opposed to public-private partnerships. Organizers also propose a credit line for communities to own their own solar generation, a financing mechanism that already exists for companies in Tunisia.

Symbolic Importance

Tunisia is, ironically, a significant exporter of crude oil and natural gas and importer of refined petroleum. While Tunisia produces significant amounts of crude oil and natural gas, approximately 82% is exported. However, Tunisia has been dependent on energy imports since the early 2000s, with the majority of their natural gas and oil imported from Algeria and Libya, respectively. These needs have been compounded by political and social unrest in the last two decades, which have directly impacted domestic energy production. To address these energy security challenges, Tunisia embarked on an energy transition, focusing on diversifying its energy mix and incorporating renewables.

This irony is amplified by Tunisia's domestic renewable energy potential. Tunisia possesses significant domestic renewable energy potential. It adopted a solar policy in 2015, targeting 1,860 megawatts (MW) of installed renewable capacity by 2023 and a more ambitious 3,815 MW by 2030, representing a five-fold and ten-fold increase from the 2017 capacity. The nation is committed to raising the share of renewables in its electricity production mix to 30% by 2030, marking a substantial step toward a more sustainable energy future (see Governmental Information). International renewable energy developers understand this potential and are constructing power generation for the export to the Global North. For example, the TuNur Italy Transmission Line will connect TuNur's 2,000 MW in southern Tunisia to Italy, where power will be delivered to approximately 2 million European homes.

North Africa as a whole is one of the most climate vulnerable regions of the world, with energy, water, and food all being tightly connected. To meet existing and projected demand for water, the region is turning to energy-intensive processes, like desalination in Algeria and treatment of wastewater in Tunisia. Renewable-based desalination plants can help reduce energy and carbon intensity, and solar-powered irrigation can reduce emissions, displace diesel generators, increase water access, and increase local agriculture resilience. A third of the water sector's energy demand comes from groundwater pumping. Tunisia is highly vulnerable to climate change and its effects. By 2080, temperatures in the country are expected to increase by 1.9°C to 5.3°C, causing increased aridity and decreased rainfall. Tunisia is also susceptible to sea level rise and has already experienced increased incidences of climate-induced natural disasters, degrading ecosystems, and pressures on food systems.

Governmental information

A new constitutional framework adopted in 2022 instituted a republic with bicameral legislature comprised of a:

• President, who is elected for a maximum of two five-year terms, which may be extended in “times of imminent danger.” The President appoints Tunisia’s Prime Minister, all cabinet ministers, and certain judiciary positions; can introduce legislation and amendments; and has the power to dissolve parliament.
• Assembly of the People’s Representatives, which is the lower house where legislation originates.
• National Assembly of Regions and Districts, of which exact legislative authority is unspecified in the constitution and will instead be determined via statute.

The new constitution also significantly limits the power of judicial and legislative bodies relative to the previous framework. Below these bodies, Tunisia is divided into 24 provinces or governates called wilāyāt, each led by a governor and split into multiple delegations.

Several bodies have some level of authority over Tunisia’s energy planning, particularly the National Agency for Energy Management (Agence Nationale pour la Maîtrise de l’Energie), which works to craft and execute Tunisia's national energy management policy strategy, manages energy subsidies, sets retail process for energy products, and serves as Tunisia's primary energy regulator, as well as the Ministry of Industry, Energy, and Mines (Ministère de l’Industrie, de l’Energie et des Mines), which aims to improve Tunisia’s business conditions with a particular focus on regulation, intellectual property, competition, and consumer protections.

Tunisia's 2021 update the its Nationally Determined Contribution created a conditional target of 45% greenhouse gas reduction by 2030, relative to 2010 levels, as well as an unconditional reduction of 27% by the same year and levels.

Related government papers

Overview of renewable energy support policies and regulation in Tunisia

Legislation	Date	Significance
Law No. 96-27	1 April 1996	Establishes concessions on electricity production, which allows private entities to manage key activities like infrastructural investments, maintenance of existing assets, etc., for a set period of time in exchange for financial benefits.
Decree No. 96-1125	June 20 1996	Establishes conditions and procedures for granting electrical generation concessions to private consumers
Law and Decree on Energy Conservation and Renewable Energy	2005	Aims to strengthen use of renewable energy technology in buildings and encourages increased wind and solar generation across the grid.
National Energy Efficiency and Renewable Energy Programme, 2008-2011	2007	Establishes conditions and procedures for granting electrical generation concessions to private consumers
Decree on Connection and Access of Renewable Electricity to the National Grid	2011	Establishes the conditions for project developers to connect renewable energy to the national power grid.
Tunisian Solar Plan	2012; updated in 2015	Tunisia's guiding plan for developing and deploying renewable energy and reaching1,860 MW of installed renewable capacity by 2023 and a 30% renewable energy share by 2030, including 3,815 MW of solar energy. The Plan notes that 80% of financing must come from the private sector to meet the outlined targets.
Renewable Energy Law for Electricity Production (Law No. 2015-12)	May 11 2015; amended May 29 2019	Opens the power grid and allows private companies to generate, export, and utilize clean energy. Also, establishes a 30% (3,800 MW) renewable energy by 2030 target, authorizes use of agricultural lands for clean energy projects, and aims to create 10,000 jobs. A 2019 amendment improves Tunisia's business climate and allows businesses to create corporate power purchase agreements.
Governmental decree No. 2016-1123	August 24 2016	Sets conditions and procedures for the completion of renewable energy generation projects
Governmental decree No. 2017-983	July 26 2017	Regulates the Energy Transition Fund, the primary mechanism for financing renewable energy generation projects and energy efficiency upgrades.

In addition to these domestic activities, several initiatives, declarations, and resolutions have been passed in recent years in support of climate action and low-carbon development that span across African countries. These initiatives include:

• Agenda 2063: 50-year plan focused on developing sustainably between 2013 and 2063. Developing renewable energy and associated infrastructure is a tenant of the plan.
• African Single Electricity Market: Aims to connect various power pools across Africa into a singular, comprehensive marketplace for selling and purchasing electricity, resulting in increased security, lower prices, and greater access.
• Continental Power Systems Masterplan (CMP): Long-term roadmap for connecting Africa’s energy systems. The Masterplan is unique in that it was entirely driven by African nations, with collaboration and responsibility shared across participating countries. The CMP also highlights the importance of investing in renewables, as they are the most cost-effective means of addressing Africa’s rapidly growing energy demand.
• African Union Climate Change and Resilient Development Strategy and Action Plan: Foundation for Africa’s collaborative efforts on climate action between 2022 and 2032, in line with Agenda 2063. The Plan highlights low-carbon energy and increasing access to clean energy as major goals.
• Nairobi Declaration on Climate Change and Call to Action: Cross-country commitment to collaborate on decarbonizing African (and global) economies, which includes a drastic increase in renewable energy capacity. This Declaration was adopted at the first ever Africa Climate Summit in 2023.

Relevant political coalitions

On behalf of the German Government and the European Union as a whole, the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) has been active in Tunisia since 1970 with a focus on fostering sustainable economic development and employment opportunities, supporting local governance and democracy, and protecting local water and natural resources.

Permitting

Depending on the size of the project, Tunisia employs two different project regimes: the Concessions regime, which is applicable for large-scale projects typically designed for energy export, and the Authorizations regime, which is for projects with a maximum capacity of 10 MW, 30 MW, and 15 MW for solar, wind, and biomass projects, respectively. Projects generally go through the following process:

1. After the publication of project calls, applications are reviewed by the Technical Commission for Private Power Generation (CTER, housed within the Ministry of Energy). Applications should contain a preliminary study that covers proposed connection, associated cost, and potential grid reinforcement expenses.
2. Before being granted authorization, potential project developers need to secure a preliminary agreement called the Accord de Principe from the Ministry of Energy. Only applicants who have been recommended by CTER will receive an Accord de Principe. For solar PV projects, it is valid for two years, though applicants may file an extension if implementation challenges delay development.
3. After an agreement is made, developers will enter into a Power Purchase Agreement with STEG. PPAs are standardized and are not negotiated between the project company and STEG. This may present problems in the case that STEG defaults on payments, given that the PPA lacks stipulations for letters of credit or state support, both of which would reduce risk for the project developer.
4. An operating permit is granted once the plant is constructed and STEG has verified its compliance with technical specifications. An operating license typically lasts 20 years.
5. Acquiring land may comprise of two different processes. If land is privately owned, a land audit is undertaken to ensure accuracy and legitimacy of the title. When a property is privately-owned but unregistered, a land survey can help establish ownership rights and assess land consistency, usage, and potential easements. For public property, a land audit is conducted to support granting of occupancy permits and lease contracts.

SolarQuarter has identified permitting and licensing timelines as a barrier to renewables development and recommends simplifying and streamlining these processes to expedite project development and instill confidence in investors. Additionally, a 2018 study by the United Nations Development Programme highlighted one-stop-shop mechanisms as a means of streamlining the permitting process, though as of 2022, that platform does not yet exist.

Transmission

Existing and upcoming cross-border interconnections in the Continental Power Systems Masterplan’s Full Continental Integration Scenario. Originally published by IRENA.

The Continental Power Systems Masterplan (CMP) aims to connect Africa’s five existing power pools through strategic and coordinated investments across participating countries. Under the Full Continental Integration scenario, electricity demand is expected to increase threefold by 2040, with total capacity increasing to 1200 GW and renewable capacity increasing to 750 GW. Cross-border transmission will expand dramatically from 23 GW in 2023 to 167 GW in 2040, and the Plan’s rollout will cost approximately USD$1.3 trillion by 2040 or USD$72 billion per year.

The TuNur Italy Transmission Line will the ample solar resources of southern Tunisia to consumers in Europe. The project will consist of 660 km of 525-kV ACDC overhead lines in Tunisia, 661 km of 525-kV DC submarine cables, and 7 km of 525-kV DC and 400-kV underground cables, terminating at an existing high-voltage substation.

Tunisia's power sector is well-developed, with 99.8% of its population having access to the national electric grid. The power system is interconnected to those of Algeria and Libya, though connection with the latter country is operated with precaution due to electrical instability.

Current transmission resources

As of 2018, STEG operated approximately 6,900 km of transmission lines (208 km of 400-kV lines; 2,910 km of 225-kV lines; 2,382 km of 150-kV lines; and 1,406 km of 90-kV lines). The grid has six connection lines of various voltages, primarily for reliability and emergency purposes. The rate of electricity loss across Tunisia's grid was approximately 2.3% in 2018.

Plans are in place to construct the ELMED, an underwater 400-kV interconnection line bridging Tunisia and Italy.

New transmission needed for renewables

The Project to Develop and Equip the Power Transmission Grid (PAERTE) aims to strengthen Tunisia's power grid and allow for greater additions of renewable capacity, specifically wind and solar. The project is national in scope with special focus paid to the governates of Bizerte, Ben Arous, Sousse, Sfax, and Gabes. The project is expected to be complete by December 31, 2024 with an investment estimate of EUR 290 million.

In an effort to increase renewable energy penetration and interconnection with Europe, the Tunisian Government and the African Development Bank have outlined three priority transmission investment opportunities:

1. Physical and operational update of the dispatch system
2. Upgrade transmission network equipment
3. Reinforce the national backbone

Expected investments are USD ~$250 million. With these priorities in mind, STEG has commissioned several studies to determine methods for integrating renewables:

1. Pre-feasibility study of the integration of storage batteries into the electrical system
2. FICHTNER Study
3. Feasibility study of the introduction of storage batteries into the Tunisian electricity system under the assistance of JICA.
4. Strategic study on electrical energy storage capacity in Tunisia
5. “Networks” study relating to the future Tunisia - Italy interconnection (ELMED project)
6. Network studies for the integration of VRES

Social and environmental impacts of new transmission

Concerns exist surrounding the renewable energy industry's replication of unjust tactics employed by past fossil fuel energy developers. For example, the TuNur Italy Transmission Line will connect an existing Tunur CSP and PV solar plant to consumers in Europe. Activists argue that the project as a whole is an example of "green grabbing," or "the appropriation of land and resources under the guise of environmental goals." The land and water intensity, coupled with the exportation of power away from marginalized region of the country, has generated local frustration.

Additionally, rural communities, particularly those living in southern Tunisia, may not receive the electricity generated nearby. For example, TuNur is constructing a transmission line connecting a solar plant in Kebili, Tunisia to a substation in Lazio, Italy. The line will have an HVDC transmission capacity of 2,000 MW and is expected to supply power to 2 million homes in Europe. The 661-km long project is expected to be complete in 2032, though the website does not specify the quantity of energy, if any, that will be allocated for Tunisian residents.

The 600-MW Tunisia-Italy interconnector line (ELMED), a 200-km undersea cable, will connect both countries' power grids with the intention of increasing energy security, allowing for greater integration of renewable energy, and reducing emissions. The project has received financial support from the World Bank ($268.4 million), the Government of Italy, the European Union, the European Bank for Reconstruction and Development, the European Investment Bank, and KfW, a German development bank. This is essential to Tunisia’s sustainable development and climate change strategy, positioning the country as a regional renewable energy hub by connecting to the much larger European network.

Supply Chain

By 2017, Tunisia's solar water heating industry (SWH) saw the presence of:

• 53 suppliers including ten local manufacturers
• 1200 installers, of which 500 received additional training certifications
• 250 approved SWH system models
• 16 engineering consulting firms
• 12 installation companies with qualifications specific to collective solar heating systems
• three technical control offices.

Additionally, SOCOMENIN, a private company based in Tunisia, produces wind turbine tower, and local industry has the tooling and skills required to manufacture mechanical, electrical, and electronic components. A domestic supply chain is limited by a lack of raw materials like silica, as well as the absence of manufacturers for intermediary technologies like turbine controllers. Existing businesses can also carry out necessary supportive services, such as logistics and transportation.

Ownership

Major owners of current fossil capacity

The Société Tunisienne de l'Électricité et du Gaz (STEG), Tunisia's state-owned utility, controls over 91% of the country's installed generating capacity and produces 84% of the electricity. The first independent power producers (IPPs) were announced in late 2017, and since their inception, 33 projects have been conceptualized: 24 10-MW solar projects; two 50-MW solar projects; two 100-MW solar projects; one 200-MW solar projects; and four 30-MW wind projects.

Since its establishment in 1962, STEG has increased national electrification rates from 21% to 99.8%; rural electrification rates from 6% to 99.5%; and installed more than 5,800 MW of generating capacity. However, since 2011, STEG has experienced significant commercial and financial deterioration, mostly in the form of unpaid bills and electricity theft.

Major owners of prospective renewables

While STEG controls the vast majority (91.7%) of installed generating capacity and generates 84% of the country's electricity, there is one independent power producer, Carthage Power Company, operating in Tunisia. Carthage Power Company owns and operates a 471-MW combined cycle power plant.

Finance

Of the USD$2.8 trillion invested in renewable energy between 2000 and 2020, only 2% went to Africa, a share that dropped to less than 1% in 2021. Investments nearly tripled in 2022 and quadrupled in 2023 but still fell short of total financing needs. Approximately 40% of financing Africa received between 2010 and 2020 went to southern Africa, while 32% went to North Africa. Top recipients of financing were Egypt, Kenya, Morocco, and South Africa. 45% of direct investments came from public financing sources. Due to anticipated risk associated with projects in Africa, the continent experiences higher weighted average costs of capital (WACC) which makes it difficult to secure private investment.

Tunisia's 2021 Nationally Determined Contribution (NDC) estimates that a total of USD $11.8 billion invested in the country's energy sector will be required to support low-carbon scenarios. This figure estimates that energy efficiency upgrades will require USD $5.8 billion, renewable energy deployment will require USD $4.4 billion, and improving electrical infrastructure will require USD $1.7 billion.

Raw materials and products necessary for the construction of energy efficiency and renewable energy equipment are exempt from VAT and have certain reduced import duties.

Potential providers of wind/solar finance

The World Bank's presence in Tunisia is large, with two active energy projects in the country: The Tunisia Energy Sector Improvement Project (USD $151 million), which aims to strengthen the electrical grid, and the Tunisia-Italy Power Interconnector (USD $268.4 million), which aims to increase resilience by connecting the power systems of both countries. Additionally, the World Bank has provided funding for six other, completed energy and resilience-related projects since 2013.

The Central Bank of Tunisia (Banque centrale de Tunisie) is a member of the Network for Greening the Financial System, a coalition intended to "share best practices, contribute to the development of climate-related and environmental risk management in the financial sector and mobilise mainstream finance to support the transition toward a sustainable economy."

In 2023, AMEA Power achieved financial close for its first solar investment project, amounting to $86 million (TND 315.84 million). This project is located in Tunisia and has a nameplate capacity of 120MW. Commissioning of the project is anticipated to commence in mid-2025.

Tunisia's first privately financed project, the Kairouan Solar Farm, reached financial close in 2023. In support, African Development Bank provided $26 million in debt financing, including $13 million from the Sustainable Energy Fund for Africa.

Public Private Partnerships:

Between 1999 and 2020, only five major PPP projects (for all types of infrastructure) were approved in Tunisia, totaling just $1.2 billion USD. At the same time, from 2010 to 2021 the country's public debt increased from 40.7% to 84.5%.

However, the infrastructure funding landscape has started to shift.

The first Independent Power Producers (IPPs) for renewable energy were announced in the second half of 2017, with the Government of Tunisia awarding private companies 24 solar projects of 10 MW each two 50 MW solar projects, and four 30 MW wind projects. (Though most of these are not yet operational.) Tunisia also allows for private companies and households that use co-generation and renewable energies to sell up to 30% of their excess energy at a fixed price to STEG, the state power utility.

Since 2020, the World Bank has been providing assistance for the Tunisian PPP Project Development Fund (PDF) in order to accelerate PPPs. Tunisia is developing a $4 billion project pipeline that includes 1700 MW of wind and solar energy as well as green hydrogen infrastructure, in addition to other infrastructure projects.

In 2023, Tunisia's first privately-financed, large-scale solar project, the Kairouan solar project was launched. The African Development Bank stated, "The [120 MWp], $86 million solar plant located in Tunisia's Kairouan governorate will benefit from up to $26 million in debt financing from the African Development Bank, including $13 million sourced from SEFA, a multi-donor fund that provides finance to unlock private sector investments in renewable energy and energy efficiency." Following this trend, the company Voltalia was awarded a contract in May 2024 for another 130 MWp solar project near Gafsa, which involves another PPP.

In June of 2022, the government also announced a program to promote green hydrogen production for domestic use and export, as well as legal framework to encourage foreign investment.

Other

The Energy Transition Fund (FTE) was created to support implementation of Tunisia's energy policy by providing subsidies, loans, credits, and direct funding to:

• Encourage investment in energy efficiency and conservation
• Support the creation of private energy companies operating in the country
• Facilitate implementation of energy programs, and
• Achieve targets outlines in Tunisia's UN Nationally Determined Contribution.

FTE funding comes from taxes on air-conditioning appliances, energy products, registrations of first cars, and used engine and spare part imports, as well as individual donations/grants and resources from FTE interventions. Similarly, the Tunisian Investment Fund provides companies, including those who develop renewable energy, with specific tax benefits and direct fiscal support, up to a certain percentage of total project cost.

Specific projects have also received significant financial support from international bodies. For example, the Tunisia-Italy interconnector line (ELMED) has received financial support from the World Bank ($268.4 million USD) and the European Commission (€307.6 million).

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