The World Bank has approved a $430 million program to support Tunisia in its crucial energy sector reform and transition. This five-year initiative, named the Tunisia Energy Reliability, Efficiency, and Governance Improvement Program (TEREG), aims to enhance the country’s energy security, promote renewable energy, and improve the financial stability of its electricity sector.
Addressing Tunisia’s Energy Deficit with Tunisia energy financing
Tunisia’s electricity sector, primarily reliant on imported fossil fuels, has faced significant challenges. The state utility, the Tunisian Company of Electricity and Gas (STEG), has been burdened by rising energy import costs, leading to a severe strain on public finances. The widening gap between the cost of energy and revenues has adversely affected the reliability of electricity services for consumers and businesses alike.
The World Bank’s financing through the TEREG program aims to address these issues head-on by supporting reforms to improve the financial sustainability of the electricity sector. The project includes a results-based component that will provide financial resources to bridge the gap between energy costs and revenues, thereby ensuring the long-term financial stability of the sector.
Sonia Ben Jaafar, a World Bank Senior Energy Specialist and Task Team Leader of the Project, emphasized the importance of these reforms. “By supporting these reforms, we are helping to improve the financial sustainability of the electricity sector, which is crucial for Tunisia’s economic development,” she said.
Promoting Renewable Energy through Tunisia energy financing
A key objective of the TEREG program is to make Tunisia’s electricity sector more sustainable. The project will finance critical investments in renewable energy, including wind and solar power, as well as energy efficiency measures. These initiatives are designed to reduce Tunisia’s reliance on fossil fuels and promote a cleaner, more resilient energy future. The focus on solar is particularly timely, as demonstrated by the construction of [a new 10-megawatt solar power station in Tunisia](https://www.pvknowhow.com/news/a-new-10-megawatt-solar-power-station-in-tunisia/), which highlights the country’s commitment to clean energy.
This investment aligns with broader international support, such as the [impressive Tunisian solar project backed by €19M EBRD loan](https://www.pvknowhow.com/news/impressive-tunisian-solar-project-backed-by-e19m-ebrd-loan/), showcasing a coordinated push to unlock the nation’s vast renewable potential. As the country builds out its solar capacity, understanding the [Tunisia solar panel manufacturing | Market Insights Report](https://www.pvknowhow.com/solar-report/tunisia/) becomes increasingly important for stakeholders.
The project will also support the development and modernization of Tunisia’s electricity transmission and distribution infrastructure. This will improve the reliability and efficiency of electricity services, benefiting consumers and businesses across the country.
Encouraging Private Sector Participation via Tunisia energy financing
The TEREG program will also focus on improving governance and transparency within the electricity sector. This is expected to create a more conducive environment for private sector participation, unlocking billions in private investment for electricity generation and distribution. By promoting private sector investment, Tunisia aims to attract more resources and expertise to the energy sector, fostering innovation and growth.
This strategy is part of a larger trend across the continent, where private-sector clean energy investment in Africa has nearly tripled since 2019. Events like the recent conference on [Jinko Solar & Tunisia Host Conference on Solar Investment](https://www.pvknowhow.com/news/jinko-solar-tunisia-5-essential-investment-opportunities-for-2024/) are clear indicators of growing investor confidence.
Marie Françoise Marie-Nelly, World Bank Country Director for the Maghreb and Malta, highlighted the importance of these reforms. “Improving governance and transparency in the electricity sector will help attract private sector investment in electricity generation and distribution,” she said.
World Bank’s Commitment to Tunisia energy financing
The World Bank has been a key partner in Tunisia’s economic development, providing financing and technical assistance to support various sectors. This latest project is part of the World Bank’s broader strategy to support Tunisia’s economic growth, create green jobs, and ensure equitable development.
By addressing the challenges in Tunisia’s energy sector, the World Bank aims to promote sustainable economic development and improve the quality of life for Tunisians. The project’s impact will be significant, reducing the country’s reliance on fossil fuels and placing it on a path toward becoming a regional leader in renewable energy, a trend also seen in the [Global Solar Report](https://www.pvknowhow.com/global-solar-report/).
The World Bank’s financing will play a crucial role in helping Tunisia overcome its energy challenges and transition to a more sustainable and resilient energy sector. By supporting reforms and investments in renewable energy, the World Bank is helping Tunisia build a brighter, more sustainable future.
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