Tunisia Power Market Size & Share Analysis - Growth Trends And Forecast (2025 - 2030)

Tunisia Power Market Trends and Insights

Gas-Fired Build-Out Under Plan Solaire Tunisien 2030

Tunisia aims for 30% renewable penetration by 2030, yet dispatchable gas remains essential for balancing intermittent output. STEG is refurbishing combined-cycle plants and adding quick-ramping gas turbines that operate 15-20 percentage points more efficiently than legacy units, lowering heat rates and curbing curtailment.^{[1]African Development Bank, “AfDB Approves Loan for Kairouan Solar Plant,” afdb.org} The AfDB’s 2024 co-financing of the 100 MW Kairouan solar plant signals donor support for hybrid portfolios pairing renewables with flexible thermal assets. The World Bank’s 2025 TEREG program channels USD 430 million into 2.8 GW of solar-and-wind capacity while conditioning disbursements on storage and grid-flexibility investments, underscoring the interdependence between renewables and gas back-up.^{[2]World Bank, “World Bank Supports Tunisia’s Energy Transition with $430 Million Program,” worldbank.org} Algeria’s gas-supply uncertainty amplifies the need for efficient turbines, yet continued reliance on imports heightens fuel-price exposure. Without these gas upgrades, renewable penetration beyond 35% would jeopardize grid stability in the Tunisia power market.

Renewable-Energy Auctions (1 GW 2024-2026 Pipeline)

A 1.7 GW tender series placed Tunisia among North Africa’s most competitive auction venues. In December 2024, Qair, Scatec, and Voltalia secured 498 MW at tariffs near USD 0.031 /kWh, reflecting global PV module deflation and intense bidding. A 500 MW solar round advanced in March 2025, selecting four firms at comparable prices. Scatec’s 120 MW Sidi Bouzid II project reached a 25-year PPA in 2025, with EUR 87 million capex financed on a 50-50 basis with Toyota Tsusho’s Aeolus unit.^{[3]Scatec, “Scatec Signs PPA for 120 MW Solar Project,” scatec.com} Local-content thresholds of 30-40% postpone financial close by up to nine months, pushing developers to source mounting structures and inverters domestically. Despite compressed margins, auction cadence must accelerate because currently contracted volumes cover only 14% of the 2030 renewable target in the Tunisia power market.

Grid Modernization Loans from AfDB & KfW

STEG’s grid-modernization agenda hinges on a EUR 113 million Siemens-led smart-grid pilot across Sfax, Sousse, and Le Kram, scheduled to finish in 2025. AfDB extended EUR 120 million for nationwide meter roll-outs, targeting 5 million electricity and 1 million gas meters by 2029. The European Investment Bank added EUR 65.8 million to bolster substation capacity and reduce technical losses exceeding 15% in some feeders. Real-time data will enable time-of-use tariffs that align solar-heavy midday generation with flexible demand. Yet tender approvals remain slow, and replicating pilot success across the Tunisia power market requires strong project-management discipline.

Regional Interconnector with Italy (ELMED)

The 600 MW ELMED high-voltage DC link, budgeted at EUR 921 million, connects Tunisia to Italy in 2028, co-financed by the European Investment Bank, KfW, and World Bank grants. It will export surplus solar into the EU and import evening-peak power, unlocking carbon-credit eligibility. A EUR 12 million EIB technical-assistance grant in 2025 underlines execution risk and STEG's euro-denominated debt exposure. Critics warn of "green colonialism," but the cable can shave Tunisia's Algerian-gas dependence and create a new revenue stream for Tunisia's power market.

Rising Sovereign-Risk Premium on IPP Finance

Credit ratings of B- (Fitch) and CCC+ (S&P) impose 300-400 bp financing spreads over investment-grade markets, shrinking developer returns. IMF subsidy-reform stalemates stall sovereign backstops, and STEG’s arrears exceed USD 1 billion annually, elevating offtaker risk. EBRD’s EUR 300 million loan delivered emergency liquidity, but the utility’s deficit persists. Consequently, developers demand sovereign guarantees or partial-risk insurance, delaying financial close and slowing renewable build-out in the Tunisia power market.

Aged Thermal Fleet > 25 Years—Efficiency Drag

Many gas turbines date to the 1990s, consuming 10-15% more fuel per MWh than modern combined-cycle units. Deferred maintenance has cut capacity factors to 50-60%, constraining ramping flexibility when solar output plunges at dusk. Fleet renewal needs USD 1-2 billion, but no financing vehicle exists. The efficiency gap worsens carbon intensity, jeopardizing potential EU carbon-credit revenue once ELMED goes live. World Bank disbursements now require parallel thermal upgrades, linking legacy-plant health to the long-term CAGR of the Tunisia power market.

Segment Analysis

By Power Source: Renewables Gain Momentum Within a Thermal-Led Mix

Thermal units commanded 84.9% of the Tunisia power market share in 2024, reaffirming the centrality of gas-fired output in meeting peak demand. Renewables, anchored by solar PV and coastal wind farms, are advancing at a 25.9% CAGR, propelling the Tunisia power market size for clean electricity to an anticipated 4.4 GW by 2030.^{[4]World Bank, “World Bank Supports Tunisia’s Energy Transition with $430 Million Program,” worldbank.org} Steady module price declines and concessionary World Bank funding underpin tariff bids below USD 0.032 /kWh. Smart-grid pilots will enable flexible loads to align with solar peaks, while the 400-600 MW pumped-hydro project offers swing capacity to prevent curtailment. Yet a euro-denominated debt burden from ELMED and gas-import volatility sustains thermal lock-in.

In parallel, ACWA Power’s green-hydrogen roadmap envisions 12 GW of renewable capacity feeding electrolyzers, which could triple domestic renewable build-rates if wheeling reforms emerge. Until then, STEG continues life-extension overhauls of Rades and Sousse turbines to hedge against renewable intermittency. Hydro and biomass remain peripheral, and no nuclear program is planned. Overall, rising renewable output narrows the fossil share but leaves gas-fired flexibility indispensable to the Tunisia power market.

Note: Segment shares of all individual segments available upon report purchase

By End User: Utilities Retain Dominance Amid Nascent Corporate Demand

Utilities held 81.6% of the Tunisia power market size in 2024 and are trending at a 9.6% CAGR through 2030 as STEG signs 20-25-year PPAs with auction winners.^{[5]STEG, “Official Statistics and Press Releases,” steg.com.tn} Commercial and industrial users, led by phosphates, cement, and textiles, seek direct PPAs but remain captive to bundled tariffs. The absence of open-access regulations limits corporate renewable procurement, though data-center investors lobby for change. Residential demand grows slowly but now hosts a 300 MW rooftop fleet that trims daytime grid load.

Looking forward, corporate offtake could accelerate once grid-code amendments permit wheeling, unlocking latent demand near Gafsa’s phosphate belt and coastal data hubs. Until then, the Tunisia power market depends on STEG’s balance-sheet resilience and multilateral backstops to scale renewable investment while sustaining universal service obligations.

Note: Segment shares of all individual segments available upon report purchase

Geography Analysis

Electricity use clusters along the Tunis-Sousse-Sfax coastal corridor, which consumes roughly 70% of the national load. Tunis alone absorbs 40%, driven by public buildings and service-sector activity. Sfax and Sousse host textiles, agrifood, and cement works needing a reliable baseload supply. Interior governorates, Kairouan, Sidi Bouzid, and Tataouine, offer world-class solar irradiance above 2,000 kWh/m², attracting auctioned PV farms supported by AfDB and World Bank capital.

Transmission upgrades are vital because 220 kV circuits funneling inland generation to coastal loads face thermal constraints during summer peaks. The 600 MW ELMED link anchors a future West-Med ring enabling exports, while potential Libya and Algeria tie-ins remain politically contingent. Eni’s 200 kW Tataouine school-solar initiative illustrates donor outreach to underserved south-desert communities. Rural electrification gains, however, add modest volume relative to heavy industrial loads.

By 2030, grid reinforcement around Kairouan and Sidi Bouzid should unlock 1 GW of inland solar. Pumped-hydro at Oued El Melah near Tabarka leverages favorable topography for 600 MW of storage, balancing north-coast demand swings. Spatial mismatch between load and resource underscores the strategic value of multipoint interconnections in stabilizing the Tunisia power market.