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.