The European Bank for Reconstruction and Development (EBRD) is providing a €45 million financing package to STEG, Tunisia’s state-owned national electricity and gas utility company, to support the energy transition and the decarbonization of Tunisia’s energy sector.
The package will assist STEG in financing the construction by 2028 of ELMED, a 600 MW high-voltage direct-Current submarine interconnection cable of 200 km connecting the electricity transmission networks of Tunisia and Italy. The financing will also help to integrate the European and North African electricity grids and accelerate the development of renewable energy in Tunisia. The project will be implemented jointly by STEG and TERNA, the Italian transmission system operator. With a total cost of €920 million, the project benefits from an investment grant of €307.6 million from the European Union’s (EU) Connecting Europe Facility (CEF).
The EBRD’s financing is dedicated to the construction of ELMED on the Tunisian side and is part of a €125 million loan package co-financed by the European Investment Bank (EIB) and Kreditanstalt für Wiederaufbau (KfW). In addition, the World Bank is financing the converter station and associated transmission infrastructure in Tunisia.
With a €5 million grant from the EU Neighborhood Investment Platform, the EBRD financing will be accompanied by a comprehensive technical cooperation package for policy dialogue, to support the regulatory setup to operationalize and commercialize the ELMED interconnector. It will also promote the development of a decarbonization roadmap for Tunisia’s energy sector, ensuring its alignment with the Paris Agreement. In addition, the roadmap will aim to develop a guarantee-of-origin scheme in Tunisia that will be key to achieving the decarbonization targets, by building a renewable energy framework in line with the EU regulations.
The EBRD is supporting the decarbonization of Tunisia’s energy sector through the introduction of robust climate governance measures, policy engagement to support solar and wind programs and strengthening the financial standing of STEG.