Summary sheet
The project involves the construction and operation of a solar photovoltaic plant with an installed capacity of approximately 120 MWp, along with the related transmission infrastructure. It is located in the Sidi Bouzid region of Tunisia and benefits from a power purchase agreement awarded through a government-led tender process.
The aim is to support both EU and national targets for renewable energy generation. It contributes to the EIB's objectives in the areas of renewable energy, climate action (mitigation) and environmental sustainability (pollution prevention and control). It also plays a key role in helping Tunisia achieve its goal of increasing the share of renewable energy in electricity generation to 35% by 2030.
The operation consists of the construction and operation of a solar PV plant with a capacity of ca. 120 MWp, located in Tunisia, in the Sidi Bouzid region.
The project produces electricity from low carbon sources (solar PV) and addresses negative climate and environmental externalities, a market failure, through the reduction of carbon and air pollution.
The financing of this project is in line with the Bank's lending priority objectives on renewable energy and climate action and will contribute to reduce the import dependency on natural gas for electricity generation in Tunisia.
The project supports the EU - Tunisia Memorandum of Understanding on strategic partnership (2023) and contributes to Tunisia's Nationally Determined Contribution under the Paris Agreement. It aligns with the EU Global Gateway Strategy, the Africa-Europe Investment Package. It has been awarded under the first tender of the Tunisian flagship 1.7 GW renewable energy programme, and includes the financing of the transmission infrastructure needed for the project. The operation is consistent with the NDICI framework, EFSD+ priorities for green energy and industrial decarbonisation, and the Team Europe Initiative for resilient, carbon-neutral growth. It also advances the African Union's Agenda 2063 and contributes to multiple Sustainable Development Goals.
The project contributes to several Sustainable Development Goals, such as Affordable Clean Energy (SDG7), Climate Action (SDG13) and Partnerships for the Goals (SDG17).
The project's revenues will be supported through a 25-year fixed price power purchase agreement (PPA) with Société Tunisienne de l'Électricité et du Gaz (STEG), the state-owned utility company. The PPA was secured through a competitive tender. The project is expected to be supported by adequate capabilities of the promoter, which has track record in the renewable energy sector in Tunisia. In terms of results, the project is expected to have an excellent rated economic rate of return, considering the economic value of the electricity generated. Therefore, the project is expected to generate a positive broader social benefit.
The Bank will provide a significant part of the total financing needs for this Project, enhancing the overall financial viability of the project finance debt. Competitive terms, including a long maturity, a long grace period which is needed for the construction period and a sculpted repayment period to accommodate the needs of the projects add financial benefits to the project which are not locally available.
The project does not require an Environmental Impact Assessment under the national legislation. The promoter has prepared a draft comprehensive environmental and social assessment, which concludes that the potential environmental and social impacts are typically site specific and/or readily identified and addressed through mitigation measures (i.e. the project is likely to have moderate/limited adverse environmental impacts and risks that might be addressed through the application of mitigation hierarchy), and determines that an Environmental and Social Impact Assessment is not required under the EIB's standard 1. The draft assessment indicates limited air emissions, minimal wastewater generation, and minor use of hazardous materials.
The promoter shall ensure that the project implementation will be done in accordance with the EIB's Guide to Procurement.
Under EFSD+ Guarantee