A Private Sector Program for Energy Transition in Tunisia

In 2022, 98.1% of Tunisia’s electricity was derived from natural gas, two-thirds of which was imported from Algeria, making Tunisia especially vulnerable to the volatility of international oil and gas price shocks. Given an annual 4%-5% growth in power consumption, natural gas price spikes, and mounting pressure on the dinar, the energy subsidy scheme has become progressively costly to maintain, creating budgeting challenges and hindering Tunisia’s clean energy transition.

Starting in 2026, the EU intends to apply the Carbon Border Adjustment Mechanism (CBAM) on Tunisian firms exporting to the EU unless they meet certain environmental requirements. As such, it is critical now more than ever for the private sector to invest in clean energy and demand reduction solutions. Doing so will enable private companies to reduce and save on energy bills, improve competitiveness and profitability, and comply with new international green regulations.

Responding to these challenges, USAID Power Tunisia’s Private Sector Support team will help accelerate the adoption of renewable energy and energy efficiency solutions by Tunisian firms while building the capacity of key sector stakeholders to better prepare for, implement, and manage the clean energy transition. Through its work, the Power Tunisia program seeks to contribute to the following high-level objectives planned for Tunisia’s energy sector:

  • Increase Renewable Energy Deployment
  • Reduce CO2 Emissions
  • Reduce Electricity Consumption
  • Mobilize External Capital in Clean Energy Investments
  • Engage and Support Tunisian Firms
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