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Tunisia/Italy: EBRD finances Tunisia-Italy 600 MW ELMED electricity interconnector

14 Jun 2024

  • €45 million loan from the EBRD to Société Tunisienne de l’Electricité et du Gaz for the construction of the ELMED submarine cable
  • Funds to support Tunisia’s energy transition and economic stability
  • EU is funding policy dialogue roadmap for the operationalisation and commercialisation of the ELMED interconnector
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The European Bank for Reconstruction and Development (EBRD) is providing a €45 million financing package to Société Tunisienne de l’Electricité et du Gaz (STEG) to support the energy transition and the decarbonisation 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 Neighbourhood Investment Platform, the EBRD financing will be accompanied by a comprehensive technical cooperation package for policy dialogue, to support the regulatory setup to operationalise and commercialise the ELMED interconnector. It will also promote the development of a decarbonisation 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 decarbonisation targets, by building a renewable energy framework in line with the EU regulations.

STEG is Tunisia’s state-owned national electricity and gas utility company. Established in 1962, it produces and distributes electricity and natural gas. Its involvement in the gas value chain is limited to gas distribution and gas-fired generation. STEG is also the sole off-taker of private renewable energy in the country.

The EBRD is supporting the decarbonisation of Tunisia’s energy sector through the introduction of robust climate governance measures, policy engagement to support solar and wind programmes and strengthening the financial standing of STEG.

Since 2012, the EBRD has invested more than €2.3 billion in 73 projects in Tunisia and provided support to approximately 2,000 small and medium-sized local enterprises through European Union-funded technical assistance.

Original announcement link

Source: EBRD

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