EIB and EBRD provide €46.5 million loan each for power transmission in Tunisia
Investment will improve and strengthen electricity network in the North East of the country
AA – The European Bank for Reconstruction and Development (EBRD) and the European Investment Bank (EIB) – the EU Bank – are supporting vital developments required for a reliable and efficient operation of the electricity transmission grid in Tunisia.
Both EBRD and EIB will be providing a sovereign-guaranteed loan of up to €46.5 million each to Société Tunisienne de L’électricité et du Gaz (STEG), a state-owned utility company.
The company is the backbone of the Tunisian energy sector, which is in urgent need of investment to improve the security of supply.
The sovereign-guaranteed financing will be used to reinforce and strengthen the electricity transmission network, in order to enhance its efficiency and reliability and prepare the grid for additional generation capacity including renewables.
The investment in the new electricity transmission network will alleviate Tunisia’s acute energy shortages. Higher efficiency will lead to an increase in energy savings, estimated to be around 170,000MWh, and expected carbon savings of around 85,000 tonnes of CO2 per year.
This operation is the first EBRD loan in the Power & Energy sector in Tunisia and is in line with the EBRD’s Green Economy Transition approach (GET). Under GET the Bank aims to increase its green financing to around 40 per cent of total EBRD financing by 2020.
Mohamed Fadhel Abdelkefi, Minister of Investment, development and International Cooperation, said: “The energy sector is vital for all aspects of people’s daily life and for the development of all other sectors of the economy. The EIB and EBRD are providing substantial support for this sector by reinforcing our national transmission grid. Thanks to the loan we will be able to improve our corporate governance, strengthen our capacity planning and improve risk management.”
Alain Pilloux, EBRD’s Vice President, said: “We are pleased to support this important project which will significantly improve the reliability of Tunisia’s power system and reduce power losses and carbon emissions. It is our first project in the power sector in the country, and we are here to make sure that it will be completed with the best environmental standards and best international practices.”
The EIB has first invested alongside STEG in 1995 and has invested to date €1.5 billion in the electricity and gas sectors in Tunisia. “The sector of energy is a key priority for the EU Bank EIB”, said Vice-President Roman Escolano. “Tunisia’s electricity transmission provisions need to be reinforced and extended for today and in anticipation of increased demand. While virtually all of Tunisia’s residents are connected to the national grid, this project will improve transmission efficiency, cater for the connection of new generating capacity from renewable sources and increase the possibilities for regional interconnections. Further environmental benefits will be brought to the table through reduced losses and improved reliability and quality of supply.”
Tunisia became a member of the EBRD in 2012 and to date the Bank has invested more than €350 million across 25 projects in various sectors of the economy. The EBRD’s strategic plan for the period 2016-18 has three priorities: strengthening economic resilience, addressing global challenges and supporting regional integration.
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