In 2022, 98.1% of Tunisia’s electricity was derived from natural gas, two-thirds of which was imported from Algeria, making Tunisia especially vulnerable to the volatility of international oil and gas price shocks. Given an annual 4%-5% growth in power consumption, natural gas price spikes, and mounting pressure on the dinar, the energy subsidy scheme has become progressively costly to maintain, creating budgeting challenges and hindering Tunisia’s clean energy transition.

Starting in 2026, the EU intends to apply the Carbon Border Adjustment Mechanism (CBAM) on Tunisian firms exporting to the EU unless they meet certain environmental requirements. As such, it is critical now more than ever for the private sector to invest in clean energy and demand reduction solutions. Doing so will enable private companies to reduce and save on energy bills, improve competitiveness and profitability, and comply with new international green regulations.

In response to these challenges, the USAID Power Tunisia program is a five-year program funded by the United States Agency for International Development (USAID) with the mission of promoting the adoption of renewable energy and enhancing energy efficiency solutions by Tunisian firms, while strengthening the capabilities of key stakeholders in the sector to effectively prepare for, implement, and manage the transition to clean energy.