The European Bank for Reconstruction and Development (EBRD) is joining forces with the European Union (EU) to launch the Green Economy Financing Facility programme in Tunisia, aiming to strengthen the competitiveness of the private sector and support the country’s transition toward an environmentally sustainable economy.

The landmark initiative – the first of its kind to be launched in Tunisia – will provide €59 million of senior unsecured loans to up to six local financial institutions for on-lending to micro, small and medium-sized enterprises (MSMEs). The financing will target investments in energy-efficiency, renewable-energy, climate-adaptation and circular-economy investments. The new programme is also supported by the Currency Exchange Fund (TCX) and will provide Tunisian banks with a foreign exchange hedging mechanism at reduced pricing, supported by the EU.

Tunisia updated its nationally determined contributions in 2021, setting an ambitious target of reducing carbon intensity by 45 per cent by 2030. The new GEFF framework will support this target by enabling more MSMEs to invest in climate-adaptation and climate-mitigation technologies, helping to cut energy consumption and GHG emissions significantly. These investments are expected to reduce CO2 emissions by more than 26,296 tonnes per year.

The facility will be complemented by a comprehensive technical cooperation package from the EBRD and the European Union, also encompassing capacity-building programmes for partner financial institutions, with a focus on promoting equal access to green finance for women and men. In addition, the package will provide EU-funded investment incentives to sub-borrowers that have successfully completed and verified their adoption of high-performance technologies.