Tunis: A financing and guarantee agreement worth £43 million (approximately 145 million Tunisian dinars) was signed on Thursday in Tunis between Tunisia and the European Bank for Reconstruction and Development (EBRD) to fund the second phase of the ELMED electricity interconnection project between Tunisia and Italy.
According to Agence Tunis Afrique Presse, ELMED 2 aims to enhance the electricity grid of the Tunisian Electricity and Gas Company (STEG) by installing overhead transmission lines, including incoming and outgoing lines in the governorate of Nabeul. The project involves constructing a 400-kilovolt (kV) overhead electricity transmission line spanning about 85 kilometers, connecting Grombalia, Nabeul to Kondar, Sousse, and crossing the governorates of Nabeul, Ben Arous, Zaghouan, and Sousse.
The project also includes the installation of incoming and outgoing overhead lines between Ezzahra and Grombalia 1, linked to the Grombalia 2 400/225 kV substation, with a total length of around 10 km. Additional lines are planned between Seltene and Grombalia 1, also connected to the Grombalia 2 substation.
Minister of Economy and Planning, Samir Abdelhafidh, announced that the loan would be repaid over 18 years, with a five-year grace period. He highlighted the agreement's significance in addressing energy challenges and seizing historic opportunities to accelerate the energy transition, strengthen supply security, and foster regional integration.
Abdelhafidh emphasized that the project is crucial for the ELMED ecosystem's deployment, facilitating large-scale renewable energy integration and improving the national electricity grid's stability. The project complements the submarine interconnection program between Tunisia and Italy and aligns with Tunisia's national priorities for energy transition, electricity mix diversification, and regional energy hub positioning.
The EBRD's decision to finance this component underscores the mutual trust and vision convergence between Tunisia and the Bank, Abdelhafidh noted. He expressed confidence that the project's success will serve as a benchmark for regional cooperation and sustainable development financing.
EBRD President Odile Renaud-Basso praised Tunisia's energy transition progress, stating that the financing marks a significant step in strengthening energy infrastructure. She described ELMED 2 as a catalytic decarbonization project that will reduce Tunisia's dependence on imported gas and help achieve the country's goal of 35% renewable energy in its energy mix.
Renaud-Basso highlighted the project's role in promoting inclusion through skills development for youth and improved access for women to energy-related professions. She noted that since the EBRD's operations began in Tunisia, total investments have reached £3 billion, focusing on job creation in various sectors, especially the private sector.
For 2026, priorities include substantial investments in energy, water, public enterprise transformation, SMEs, and innovative companies. EBRD President Renaud-Basso is visiting Tunisia on January 15-16, 2026, to meet with senior government officials and partners.
STEG CEO Faisal Trifa explained that ELMED 2 will strengthen STEG's transmission network, enabling energy transfer from the south to northern consumption centers and exporting green energy to Europe. Since 2012, the EBRD has invested over £3 billion in 89 projects in Tunisia, with 65% in the private sector.