The World Bank and the Government of Tunisia have signed a financing agreement to implement the Tunisia Energy Reliability, Efficiency, and Governance Improvement Program (TEREG), a five-year initiative valued at US$430 million, including US$30 million in concessional financing. The program aims to modernize Tunisia’s energy sector by ensuring a sustainable, reliable, and affordable electricity supply. Its key objectives include accelerating renewable energy deployment, improving the operational and financial performance of the national electricity utility (STEG), and enhancing governance across the power sector.
Aligned with Tunisia’s updated Energy Transition Strategy, TEREG seeks to boost STEG’s efficiency and financial sustainability, attract private sector investment, and lower the carbon footprint of electricity generation. It focuses on expanding renewable energy, promoting energy efficiency, and modernizing the overall electricity infrastructure to ensure consistent power supply for households and businesses.
According to Alexandre Arrobbio, World Bank Country Manager for Tunisia, the program will strengthen Tunisia’s leadership in clean energy, create new economic opportunities, and reinforce energy security. The initiative complements existing World Bank-supported projects such as the Tunisia-Italy Electricity Integration Project (ELMED) and the Energy Sector Improvement Project, aligning with the country’s broader development goals and climate commitments under the Paris Agreement.
TEREG is expected to mobilize around US$2.8 billion in private investment to develop 2.8 gigawatts of new solar and wind capacity by 2028, creating more than 30,000 jobs—mainly during the construction phase. The program also aims to lower electricity supply costs by 23 percent, increase STEG’s cost recovery rate from 60 to 80 percent, and reduce public subsidies by TND 2.045 billion.
As noted by Amira Klibi, Senior Energy Specialist at the World Bank, TEREG is the first project to benefit from the World Bank’s Framework for Financial Incentives, recognized for its long-term climate impact and emissions reduction potential. Its reforms—focused on cutting technical losses, improving governance, and scaling renewable energy—are expected to deliver lasting benefits for Tunisia’s economy and citizens by making electricity more reliable and affordable.
