The German Development Bank (KfW) has agreed to provide Tunisian power state-owned utility Société tunisienne de l’électricité et du gaz (STEG) with €12.5 million financing for a 10 MW solar project that the company is developing in Tozeur, southern Tunisia.
In a statement to pv magazine, the KfW said the funds consist of a €12 million low-interest rate loan for the plant construction and a further €0.5 million for additional services related to the project.
The loan was awarded in partnership with the EU in the frame of the Neighbourhood Investment Facility (NIF), which provides EU partners with access to financing for heavy infrastructure in social sectors, transport, energy and the environment. Furthermore, NIF granted an additional financing of €1.5 million to Steg for the project.
Overall, the construction of the plant will require an investment of €16 million.
The facility will be built by Italian solar developer Ternienergia. The company won the €12.5 million EPC contract for the project in March.
Tunisia’s Ministry of Economy issued the Request for Proposal for the construction of the plant in 2014. The project is part of Tunisia’s solar program Plan Solaire Tunisien (PST).
In early April, the German Federal Enterprise for International Cooperation (GIZ) provided the Tunisian government with €7 million in funding to support the implementation phase of the PST.
The funds are being spent to finance the logistical and technical supervision on the development of the renewable energy program for the period 2017-2020. Tunisia’s Minister of Energy Hela Cheikhrouhou said that the funds will also be utilized to contract German and Tunisia’s experts, as well as engineering consulting firms based in Germany.
Under its renewable energy strategy, Tunisia is aiming for 4.7 GW of renewable energy capacity by 2030. According to Climate Action, the Energy General Direction of the Tunisian Ministry of Energy and Mines has recently announced it will invest $1 billion to install 1 GW of renewable energy generation capacity in 2017.