Overview
Tunisia’s power sector is well-developed, and nearly the entire population has access to the national electricity grid. Tunisia has a current power production capacity of 5,944 MW installed in 25 power plants, which produced 19,395 gigawatt hours in 2024. State power utility STEG controls 92.1% of the country’s installed power production capacity and produces 95% of electricity. The remainder is imported from Algeria and Libya. As a result of delays in new power plant construction, the power sector does not possess excess generation capacity and is susceptible to brownouts. STEG is hard-pressed to meet peak summer electricity demand, let alone keep up with Tunisia’s annual 5% growth in power consumption.
Approximately 93.7% of Tunisia’s electricity is generated from fossil fuels, mainly natural gas. Through May 2025, nearly 58% of Tunisia’s natural gas needs were met through imports from Algeria. Local gas production comes from concessions of the country’s national exploration company, ETAP, as well as foreign company concessions. The Nawara gas field, which began production in 2020, accounted for approximately 23% of domestic natural gas production in 2024. In addition to local gas production, Tunisia receives natural gas as a royalty on the Algerian Transmed gas pipeline crossing Tunisia to Italy.
Parliament’s 2015 energy law opened possibilities for Independent Power Producers (IPPs) in renewable energy technologies. While the law’s implementing guidance and a Power Purchase Agreement (PPA) template were published in 2017, in practice STEG has been slow in facilitating private sector investments in energy generation.
Since 2017, Tunisia has awarded a mix of small- (1–10 MW) and large-scale renewable energy projects under tender and authorization regimes. Under the authorization regime developers propose medium-scale projects (typically 10 MW for solar and 30 MW for wind) directly to the Ministry of Industry, Mines, and Energy; once approved and developed, the electricity is sold to national utility STEG under a PPA. The concession regime covers large-scale projects (above 50 MW) awarded through tenders or direct negotiations, based on a concession contract that grants the developer rights to build and operate the project under state-approved terms. These projects also involve land rights, grid access, and electricity sales to STEG. Major concession projects include a 100 MW solar plant under construction in Kairouan (completion expected at the end of 2025), two 50 MW projects nearing financial close, and additional 100 MW and 200 MW projects awaiting construction. Tenders launched between 2023 and 2025 aim to add more than 1,700 MW of solar and wind capacity, though most projects are still in development. Several small-scale projects are already operational across the country.
To meet increasing demand for electricity and promote energy conservation, the Government of Tunisia allows private companies and households utilizing co-generation and renewable energy technologies to produce electricity for their own consumption and sell up to 30% of excess electricity exclusively to STEG at a fixed price. The government may provide grants and incentives for energy conservation and energy efficiency projects. In 2021, Tunisia announced the elimination of the pre-authorization requirement for private, self-production of less than 1 MW of renewable energy. By June 2025 the total capacity of installed renewable energies reached 787 MW, or 6% of electricity generation.
In 2022, Tunisia launched a green hydrogen strategy to attract foreign investment and target both domestic use and exports. The government aims to become a key supplier to Europe, with long-term plans to produce 8.3 million tons annually by 2050. Exports would travel via the proposed SoutH2 pipeline connecting North Africa to Europe.
Leading Sub-sectors
Renewable energies
The potential for growth in solar and wind power generation is significant. Official government strategies foresee renewable energy technologies growing to meet growing domestic electricity demand. The renewable energy law adopted in 2015 encourages private businesses to generate and use clean energy. In 2019, Parliament passed a bill intended to improve the business climate, allowing businesses to create independent, special-purpose vehicles entirely dedicated to power generation. This policy change allows companies to produce power for their own consumption at more competitive prices.
As of June 2025, Tunisia had about 787 MW of installed renewable energy capacity: 240 MW wind, 485 MW solar, and 62 MW hydroelectric. The Tunisian government aims to raise the usage of renewable energy resources to 35% of total power capacity by 2030; significant private sector investment or international financing will be needed to reach this goal.
Green hydrogen
Tunisia’s abundant solar and wind resources, as well as its proximity to Europe (with an increasing demand for clean energy sources), make it an attractive location for green hydrogen production. The already-available Transmed gas pipeline that connects Algeria to Italy through Tunisia is an important asset for investors considering exports to Europe. The planned SoutH2 pipeline connecting North Africa to Europe through Tunisia would further facilitate green hydrogen exports. The government is also working on establishing a new legal framework to promote the production and use of green hydrogen and its derivatives in the local market.
Power generation
During the last 10 years, STEG was active in launching power projects, some of which utilize General Electric (GE) combined-cycle technology. Two tenders for gas-fired power plants issued in 2014 were awarded in 2017 and 2018 and came online in 2019 and 2022. Tunisia is expected to continue launching tenders for new gas-fired power plants and/or upgrades to existing plants over the next five years.
Opportunities
While projects are often subject to delays, excellent commercial opportunities exist for the sale of power generation equipment to STEG-operated and IPP electricity projects. The sector also offers opportunities for possible Build-Own-Operate (BOO) or Build-Operate-Transfer (BOT) projects. Much of Tunisia’s electricity production comes from gas turbines. Major players in this sector include GE Vernova (USA), Mitsubishi (Japan), Ansaldo (Italy), and Siemens (Germany).
In 2023, the Ministry of Industry, Energy, and Mines began releasing tenders for the development of solar and wind projects through 2026 with a total capacity of up to 1,700 MW. These tenders include 10 photovoltaic power plants, eight of 100 MW each and two of 150 MW each as well as eight wind farms of 75 MW each. The government plans to continue launching tenders after 2026 with the objective of reaching a total generation capacity from renewable energy sources of 3.5 gigawatts by 2030. One third of the projects will be reserved for wind farms and two thirds for solar photovoltaics.
Tunisia’s national grid is connected to Algeria and Libya which together supplied about 11% of Tunisia’s electricity consumption in the first half of 2025. Moreover, in 2023, Tunisia’s sub-sea connection project with Italy, ELMED, was approved for $337 million funding from the European Commission. The project, estimated to cost $932 million, consists of the construction of a 600 MW high-voltage direct current (DC) cable that will link the grids of Tunisia and Italy and enable power to flow between Africa and Europe via a 124-mile undersea cable. The ELMED project also received $268.4 million in financing from the World Bank, specifically to build Alternating Current (AC)/DC converter stations at both termini to ensure bidirectional power flow capability in addition to the construction of other connecting transmission lines. A contract award is expected by year-end 2025 for projected completion in 2028. Once finished, the project will help expand European access to renewable energy supplies.