Summary:

On 11 November 2025, Tunisia and the World Bank concluded a $430 million financing agreement to support the Tunisia Energy Reliability, Efficiency, and Governance Improvement (TEREG) program, a five-year initiative designed to modernize the country’s energy sector, enhance electricity security, and improve overall sector governance.  

The program includes $30 million in concessional financing from the Climate Investment Funds and aims to help Tunisia deliver a sustainable, reliable, and affordable electricity supply. This vision includes plans for accelerating renewable energy deployment, strengthening the performance of the national electricity utility (STEG), and implementing sector-wide reforms. 

Aligned with Tunisia’s updated Energy Transition Strategy, TEREG seeks to boost STEG’s operational and financial efficiency, attract private investment, and reduce the carbon intensity of power generation, while ensuring reliable access to electricity for households and businesses. It supports reforms to modernize the electricity grid, enhance energy efficiency, and expand renewable energy capacity. 

According to Alexandre Arrobbio, World Bank Country Manager for Tunisia, TEREG will enhance Tunisia’s clean energy sector, create economic opportunities, and support long-term energy security. The program is expected to mobilize $2.8 billion in private investment, add 2.8 GW of solar and wind capacity by 2028, create over 30,000 jobs, reduce electricity supply costs, improve STEG’s cost recovery, and cut state subsidies.  

Amira Klibi, World Bank Senior Energy Specialist, highlighted that TEREG is the first project benefiting from the Bank’s Framework for Financial Incentives, supporting long-term gains such as lower emissions, improved operational efficiency, and more reliable electricity for households and businesses. 

Outlook: 

The TEREG project is expected to attract substantial private investment and strengthen Tunisia’s position in the regional renewable energy market. Additionally, this investment will align with European plans to pivot energy consumption away from Russian energy and toward alternative sources, with a particular focus on North Africa. The financing under TEREG will complement the ELMED electricity connector project that is already under development to connect Tunisia and Italy with an undersea power transmission cable. 

The program is likely to enhance economic opportunities, particularly through job creation in the renewable sector, while improving electricity affordability and reducing fiscal pressure from subsidies. Long-term sector reforms are likely to increase operational efficiency and reliability of electricity services, supporting Tunisia’s transition toward a cleaner, more sustainable energy system and reinforcing its resilience against future energy challenges. 

The World Bank’s involvement is likely to boost reform credibility and investor confidence, while also supporting governance improvements, operational oversight, and the sustained implementation of sector reforms critical to achieving lasting impacts. This program builds on the country’s recent efforts to expand its renewable energy sector, supporting the country’s goal of becoming one of the most effective clean energy leaders in the region. 

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