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Tunisia Wins $430 Million World Bank Loan

Tunisia Wins $430 Million World Bank Loan
Thursday, 13 November 2025 14:31
  • The World Bank approved a $430 million package for Tunisia to modernize its energy sector through the TEREG program.
  • The program aims to attract $2.8 billion in private investment, add 2.8 GW of renewable capacity by 2028, and create 30,000 jobs.
  • Tunisia targets a 23% cut in power supply costs, improved STEG cost recovery from 60% to 80%, and a $698 million reduction in public subsidies.

The World Bank has approved $430 million in financing to support Tunisia’s energy sector reform and transition. The funding will go to the Tunisian Energy Reliability, Efficiency and Governance Enhancement Program (TEREG), designed to boost efficiency, governance, and renewable energy deployment, the bank said in a statement on November 11, 2025.

The five-year program includes $30 million in concessional financing from the Climate Investment Funds. It aims to help Tunisia establish a sustainable, reliable, and affordable electricity supply while cutting carbon emissions and improving sector governance.

TEREG will accelerate the development of renewable energy projects and strengthen the operational and financial performance of the Société Tunisienne de l’Électricité et du Gaz (STEG), the state-owned utility.

“By promoting renewable energy development, the TEREG program will help position Tunisia as a regional leader in clean energy, create economic opportunities, and secure long-term energy stability,” said Alexandre Arrobbio, the World Bank’s Country Operations Manager for Tunisia.

Tunisia, now a net importer of hydrocarbons, faces a widening energy deficit due to falling domestic oil and gas production. The country is intensifying efforts to diversify its energy mix and reduce dependence on imports.

The TEREG program is expected to attract $2.8 billion in additional private investments to install 2.8 gigawatts of new solar and wind capacity by 2028. It will also create more than 30,000 jobs while improving cost efficiency and reducing state subsidies.

According to the World Bank, the reforms will lower electricity supply costs by 23%, raise STEG’s cost recovery rate from 60% to 80%, and cut government subsidies by 2.045 billion dinars ($698 million).

The new funding complements ongoing initiatives such as the Tunisia–Italy power interconnection project (ELMED), the Energy Sector Improvement Project, and advisory services from the International Finance Corporation (IFC) and the Multilateral Investment Guarantee Agency (MIGA).

TEREG aligns fully with Tunisia’s updated national energy transition strategy, which seeks to establish a low-carbon, economically sustainable energy model. The government aims to raise the share of renewables to 35% of total energy generation by 2030.

This article was initially published in French by Ingrid Haffiny (intern)

Adapted in English by Ange Jason Quenum

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