The World Bank and the Government of Tunisia have signed a $430m financing agreement to support the country’s efforts to modernise its energy sector through the Tunisia Energy Reliability, Efficiency, and Governance Improvement Program (TEREG).
The five-year initiative includes $30m in concessional financing and aims to ensure a sustainable, reliable, and affordable electricity supply.
The programme will help accelerate renewable energy deployment, improve the performance of Tunisia’s national electricity utility, STEG, and strengthen sector governance.
It aligns with Tunisia’s updated Energy Transition Strategy, which seeks to enhance STEG’s operational and financial performance, attract private investment, and reduce the carbon intensity of 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.
“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.”
The TEREG programme is expected to mobilise $2.8bn in private investment, adding 2.8GW of new solar and wind capacity by 2028 and creating more than 30,000 jobs, mainly during the construction phase.
It also aims to reduce electricity supply costs by 23%, improve STEG’s cost recovery from 60 to 80 percent, and cut state 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.
“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.”
