Tunisia - Kairouan Solar PV Project

Kairouan Solar Project consists of design, construction and operation of a greenfield solar photovoltaic (PV) plant with a contractual capacity of 100 MWac to be implemented under a Build, Own and Operate scheme (BOO). The plant is located in El Metbassta, Kairouan North region, around 150 km South of Tunis, Tunisia. The Project scope includes an on-site substation and the construction of an 8-km 225kV interconnection to be built by the national utility - Société Tunisienne de l'Electricité et de Gaz (‘STEG’). The Kairouan Solar PV project, which is part of the 500 MW tender program launched by the State, carries the following rationale: i) reduce the dependance towards imported and expensive natural gas from Algeria; ii) diversify the current energy mix mainly composed of thermal generation (96% of the mix); iii) allow the country to meet future electricity demand expectations driven by industrialization, demographic growth and economic activities; iv) accompany transition to clean energy generation sources and enabling the country to lower the Green House Gas (GHG) emissions of its energy sector and decrease its carbon intensity by 41% in 2030, as stated in its Nationally Determined Contribution (‘NDC’) in line with the Paris Agreement; v) reduce the State subsidies in the energy sector to better support other sectors such as health and education (in 2020 State subsidies to the energy sector amounted to USD 285 million, the State has ambitions to reduce these to nil in 2026); vi) improve the financial situation of STEG thanks to a project tariff level at USD 3.5 cent / kWh vs. current generation cost at USD 9.6 c/kWh. This project primarily contributes to climate mitigation results. As such, 100% of the total approved amount is attributed as climate finance, of which 100% is dedicated to mitigation.