RIYADH: The World Bank has approved a $430 million financing package to help Tunisia modernize its power sector and accelerate the shift toward cleaner energy, as the North African country seeks to cut emissions.  

The five-year Tunisia Energy Reliability, Efficiency, and Governance Improvement Program — known as TEREG — includes $30 million in concessional financing and aims to improve the performance of the state-owned utility Societe Tunisienne de l’Electricite et du Gaz, or STEG, while expanding renewable capacity and strengthening sector governance, the lender said in a statement. 

The program aligns with Tunisia’s target of attracting $2.8 billion in private investment to develop 2.8 gigawatts of new solar and wind power capacity by 2028, a plan expected to generate more than 30,000 jobs, mainly during the construction phase of renewable energy projects. 

It also supports the North African country’s goal of reducing carbon intensity by 45 percent by 2030 compared with 2010 levels. 

“By fostering renewable energy development, TEREG will strengthen Tunisia’s position in clean energy, creating economic opportunities and ensuring long-term energy security,” said Alexandre Arrobbio, World Bank country manager for Tunisia. 

He said the project reflected their strong partnership with Tunisia and supported its sustainable development goals. 

“It builds on our long-standing engagement in Tunisia’s energy sector and complements ongoing initiatives like the Tunisia-Italy Electricity Integration Project, the Energy Sector Improvement Project, and advisory services from the International Finance Corporation and the Multilateral Investment Guarantee Agency, aligning with Tunisia’s Country Partnership Framework and its commitments under the Paris Agreement.” 

Amira Klibi, senior energy specialist at the World Bank and task team leader for the project, said this is the first program to benefit from the institution’s Framework for Financial Incentives, receiving rewards for its size and long-term benefits due to its impact on reducing greenhouse gas emissions. 

“The program’s reforms — such as reducing technical and commercial losses and increasing the share of renewables — are expected to deliver lasting improvements in the operational and financial performance of the sector, making electricity more affordable and reliable for households and businesses across Tunisia,” Klibi added. 

According to the statement, the program seeks to boost STEG’s operational and financial efficiency, encourage private-sector participation, and reduce the carbon footprint of power generation, while ensuring reliable electricity access for households and enterprises. 

It also aims to cut electricity supply costs by 23 percent, raise STEG’s cost recovery rate from 60 percent to 80 percent, and lower state energy subsidies by 2.045 billion Tunisian dinars ($693 million).