Tunisia has signed two major agreements with Norwegian and Japanese renewable energy firms to develop solar power plants in Sidi Bouzid and Tozeur, the Tunisian government has announced.
The contracts, awarded to Norway’s Scatec and Japan’s Aelous, aim to boost the country’s renewable energy capacity as part of its long-term energy transition strategy.
Tunisian Minister of Industry, Mines, and Energy, Fatma Chiboub, and Minister of State Property and Land Affairs, Wajdi Hedhili, signed the agreements at a ceremony at the Kasbah Palace. Scatec CEO Terje Pilskog and Aelous CEO Hideharu Toba were both in attendance at the event.
The solar power plants, each with a capacity of 50 megawatts, are slated to begin construction following a groundbreaking ceremony. The projects, expected to be operational by 2025, will cost approximately €79 million (260.7 million Tunisian dinars).
Financial close was reached last month for the two solar projects in Tunisia. Scatec, which secured 20-year power purchase agreements (PPAs) with Tunisia’s state utility Société Tunisienne de l’Electricité et du Gaz (STEG) in 2019, holds a 51% stake in the projects.
Aeolus, acquiring 49%, joined Scatec in advancing Tunisia’s renewable energy ambitions. The project has also been selected by Japan’s Ministry of the Environment for funding under its Joint Crediting Mechanism (JCM) for FY2023.
The solar projects will be funded through non-recourse project finance debt, concessional loans, and equity contributions from both partners. Notably, the Japanese carbon credit scheme, activated post-commercial operation date (COD), will reduce the equity funding requirement for Scatec and Aeolus to approximately 15%.
Scatec will oversee Engineering, Procurement & Construction (EPC), Asset Management (AM), and Operations & Maintenance (O&M) services, with the EPC component accounting for 84% of the project’s capital expenditure.
The European Bank of Reconstruction and Development (EBRD) and Proparco, the investment arm of France’s development agency, are the senior lenders for the projects. Additional concessional financing is provided by the Clean Technology Fund and the Global Environment Facility.
Pilskog expressed gratitude to the company’s key lending partners and the governments of Tunisia and Japan for their support in driving the region’s green transition.
Toba reaffirmed Aeolus’s commitment to contributing to Tunisia and other African nations through renewable energy development.
The Sidi Bouzid and Tozeur projects mark are a key milestone in Tunisia’s renewable energy strategy as the country works to diversify its energy mix and reduce carbon emissions.
Tunisia has been working to accelerate its transition to renewable energy, despite challenges posed by the COVID-19 pandemic and geopolitical events such as the war in Ukraine.
Secretary of State for Energy Transition, Wael Chouchane, highlighted the significance of these agreements, noting they are a culmination of years of effort.
Chouchane said that Tunisia’s energy strategy aims to generate 35% of its electricity from renewable sources by 2030, rising to 50% by 2050.
He also highlighted the country’s commitment to reducing its carbon intensity by 46%. As of mid-2024, Tunisia’s renewable energy integration rate stands at 5.6%, but Chouchane expressed optimism about bridging the gap to meet future targets.
Tunisia has launched multiple international tenders for renewable energy projects, with 500 megawatts of solar capacity planned across various sites, including Kairouan, Gafsa, and Tataouine.
The projects are expected to be operational by 2026, further supporting the nation’s energy transition efforts.
Japan’s Ministry of the Environment is backing the “JCM Model Projects,” a program that offers financial support to cover a major portion of equipment and installation costs for decarbonisation projects in developing countries.
The goal is to reduce greenhouse gas (GHG) emissions by deploying advanced clean technologies, while enabling Japan to earn Joint Crediting Mechanism (JCM) credits toward its emission reduction targets.
The program also supports partner countries in meeting their climate goals. This particular project is being implemented in collaboration with the Tunisian and Japanese governments.
