Team Europe Commits €472.6M to ELMED Electricity Interconnection Project at Tunisia Investment Forum

The European Union initially approved a €307.6 million grant from the Connecting Europe Facility (CEF) for the ELMED project in December 2022.

During the Tunisia Investment Forum (TIF) on 12th and 13th June, hosted by the Foreign Investment Promotion Agency (FIPA) under the auspices of the Ministry of Economy and Planning (MEP), Team Europe reaffirmed its commitment to sustainable development in the Mediterranean region. A total of €472.6 million has been dedicated to the ELMED electricity interconnection project and its ecosystem.

The European Union initially approved a €307.6 million grant from the Connecting Europe Facility (CEF) for the ELMED project in December 2022. This grant agreement, signed on 7th August 2023 by the European Climate, Infrastructure and Environment Executive Agency (CINEA), TERNA (Italy’s national electricity transmission grid operator), and the Tunisian Company of Electricity and Gas (STEG), supports the planning and construction phases of ELMED.

In December 2023, further financing was secured through loan agreements totaling €125 million from the European Bank for Reconstruction and Development (EBRD), the European Investment Bank (EIB), and the German Development Bank (KfW). This funding, spearheaded by the EIB, will primarily fund crucial infrastructure such as the underwater cable.

To facilitate the smooth implementation of the ELMED project, an additional €27 million grant was approved in December 2023 under the Neighbourhood Investment Platform. This funding will bolster critical infrastructure components in Tunisia, including:

1. Modernisation of the dispatch centre: A €10 million EU investment implemented by KfW.
2. Technical supervision of design and construction: Supported by a €12 million EU grant under the European Neighbourhood Platform and implemented by the EIB to aid STEG.
3. Social and environmental studies for the Tunisian green corridor: Backed by a €5 million EU grant managed by EBRD.

At the TIF, the signing of the "Mémorandum d’entente sur un partenariat stratégique pour promouvoir et développer le potentiel de l’investissement dans les énergies renouvelables et assurer l’approvisionnement énergétique et stratégique" between Tunisia and the EU underscored European support for Tunisia’s goal of achieving 35% renewable energy by 2030.

According to Fatma Thabet Chiboub, Minister of Industry, Mines, and Energy, "The ELMED project contributes to strengthening energy cooperation between Tunisia and Italy, and more broadly to the integration of the North African and European electricity markets."

Marcus Cornaro, Head of the EU Delegation in Tunisia, emphasized, "Tunisia's solar energy potential is enormous. ELMED will stabilize the power grid across the Mediterranean, enabling electricity export opportunities and fostering economic growth, employment, and emissions reduction."

EIB Vice-President Ioannis Tsakiris highlighted, "EIB’s support, alongside Team Europe partners, demonstrates our commitment to sustainable energy and economic cooperation in the Mediterranean. ELMED represents a significant milestone towards a greener, resilient future."

Dr. Andrea Hauser, Member of the Management Committee at KfW, stated, "The ELMED project marks a strategic collaboration between Tunisia and the EU, enhancing energy security and promoting renewable energy markets on both sides of the Mediterranean."

Dr. Heike Harmgart, EBRD Managing Director for the Southern and Eastern Mediterranean, added, "We are proud to contribute to Tunisia’s energy transition through ELMED, paving the way for further energy connections between North Africa and Europe."

The ELMED project aims not only to enhance energy security but also to promote sustainable energy transitions across the Mediterranean, benefiting both Tunisia and its European partners.