In a major step toward supporting Tunisia’s energy transition, the World Bank has approved a USD 430 million financing package aimed at accelerating reforms, improving electricity sector performance, and expanding renewable energy deployment in the country. The funding comes under the newly launched Tunisia Energy Reliability, Efficiency, and Governance Improvement Program, a five-year initiative designed to modernise the nation’s power ecosystem and reduce its long-standing dependence on fossil fuels.
The financing package includes USD 30 million in concessional funding from the Climate Investment Funds (CIF), giving Tunisia access to low-cost capital for climate-friendly initiatives. This blended financing approach is intended to support structural reforms while easing financial pressure on Tunisia’s state institutions.
A central focus of the programme is to strengthen the operational and financial performance of Société Tunisienne de l’Electricité et du Gaz (STEG), the state-owned power and gas utility. Over the years, STEG has faced rising operational challenges, ageing infrastructure, and growing demand pressures. The World Bank initiative aims to enhance utility governance, improve transparency, modernise maintenance practices, and reduce technical and commercial losses across the grid.
Another major component of the reform package is the scaling up of renewable energy and energy efficiency solutions. Tunisia plans to significantly increase the share of solar and wind power in its national energy mix, in line with its Energy Transition Strategy and climate commitments. The funding will support the introduction of modern regulatory frameworks, streamlined permitting processes, competitive procurement mechanisms, and improved grid integration for renewable energy projects.
In addition to reducing carbon intensity, the programme is expected to improve the reliability and quality of electricity supply for households, industries, and commercial establishments. With more efficient energy management and upgraded infrastructure, Tunisia aims to address recurrent challenges such as power outages, grid inefficiencies, and rising electricity production costs.
The World Bank emphasised that the initiative is designed not only to modernise infrastructure but also to catalyse economic growth. A more resilient and reliable electricity sector is expected to attract new investments, support local industries, and enhance Tunisia’s long-term energy security.
The approval of this financing demonstrates strong international support for Tunisia’s broader effort to transition toward a cleaner and more sustainable energy future. Over the next five years, the programme is expected to set the foundation for a more competitive electricity market, reduced greenhouse gas emissions, and improved service delivery for millions of consumers.
