Two €50 million financing and guarantee agreements were signed in Tunis on Wednesday afternoon between Tunisia and the European Bank for Reconstruction and Development (EBRD) to support the construction of a photovoltaic power plant in Béni Mhira, in the governorate of Tataouine, southern Tunisia.
The project, led by the Tunisian Electricity and Gas Company (STEG), involves the construction of a 50-megawatt (MW) solar photovoltaic power plant equipped with a 10-MW battery-energy-storage-system (BESS).
It will also include a medium-to-high-voltage (MV/HV) transformer substation and an approximately 1.2-kilometre high-voltage transmission line in Béni Mhira, Tataouine.
The project aims to improve flexibility in managing peaks in solar power generation, reduce carbon emissions from the electricity sector and enhance the stability of the national power grid.
The agreements were signed on the Tunisian side by Minister of Economy and Planning Samir Abdelhafidh and STEG CEO Faisal Trifa, and on the European side by the new Head of the EBRD Office in Tunisia, George Akhalkatsi.
On this occasion, the Economy Minister stressed that this is Tunisia’s first solar power installation combining a photovoltaic plant with an electricity storage system directly connected to the STEG grid.
The project is fully aligned with Tunisia’s national energy transition strategy, which seeks to ensure security of supply, strengthen energy independence, diversify the electricity mix and control production costs, he added.
The minister specified that the project’s total financing amounts to €50 million, granted to STEG with a state guarantee.
The innovative financing package consists of two complementary components: a €30 million loan provided under the EBRD’s standard financing terms at an interest rate of 1%, and a €20 million concessional loan from the Clean Technology Fund (CTF), administered by the World Bank, at a highly favorable fixed interest rate of 0.62%.
“The loan has a repayment period of 18 years, including a five-year grace period, and is accompanied by a €4 million technical assistance grant to support the project’s preparation and viability,” he said.
The minister also noted that, to accelerate the launch of construction works, STEG had anticipated the administrative procedures by issuing the project tender on October 5, 2026.
He added that this latest operation brings the EBRD’s cumulative financing for Tunisia’s public sector to €940 million, covering eight projects currently under implementation.
For his part, STEG CEO Faisal Trifa said construction is scheduled to begin in the first quarter of 2027, with the plant expected to become operational in summer 2028.
The project contributes to Tunisia’s national target of raising the share of renewable energy in the electricity mix to 35% by 2030. It will also make use of local expertise and strengthen Tataouine’s position within the national electricity grid.
“By diversifying the energy mix and reducing reliance on fossil fuels, STEG aims to strengthen the country’s energy security, demonstrating that the energy transition is built progressively, kilowatt-hour by kilowatt-hour,” he said.
For his part, the new Head of the EBRD Office in Tunisia stressed that solar energy combined with battery storage is currently the most cost-effective energy source worldwide and is essential to the country’s energy transition, security and independence.
He added that the project also includes a comprehensive cybersecurity component to ensure the integrity and protection of the national electricity grid in the future.
This pioneering initiative, developed in close cooperation with STEG and the Ministry of Economy and Planning, paves the way for similar projects involving both the public and private sectors, he concluded.
As part of its energy transition strategy, Tunisia has set a target of increasing the share of renewable energy in its electricity mix to 35% by 2030 and 50% by 2035.
Achieving these targets will require total operational renewable electricity generation capacity of 4,850 MW by 2030 and 8,350 MW by 2035, based primarily on solar photovoltaic and wind power.
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