Why Tunisia’s renewable energy strategy is facing resistance
The Russia-Ukraine conflict and the United States-Israel war on Iran have exposed how fragile energy systems built on dependency and external markets truly are. This
The Russia-Ukraine conflict and the United States-Israel war on Iran have exposed how fragile energy systems built on dependency and external markets truly are. This cycle of fuel crises and price shocks should be encouraging countries dependent on energy imports to address energy deficits and mitigate the impoverishment they cause among citizens. And yet few are undertaking the bold actions needed to improve energy independence. Tunisia is certainly not one of them. The country’s energy deficit currently stands at roughly $3.8bn – nearly 51 percent of its total trade deficit – and has grown every year since 2000, driven by rising domestic consumption and a structural failure to build genuine energy sovereignty. The Tunisian authorities, however, are pursuing the wrong policies to address the problem. They have hedged their bets on the privatisation of the energy sector, as reflected in the recent approval of five renewable energy concessions. The projects allow foreign multinationals to extract profits from renewable energy production and dump costs on the Tunisian people. This approach will not solve Tunisia’s energy crisis; instead, it will deepen its energy dependency while transferring public wealth into private hands. Five bad energy concessions On January 29, five new concession contracts for electricity production from renewables were submitted to the Tunisian parliament for approval. The five solar plants – Khobna and Mezzouna in Sidi Bouzid in central Tunisia, El Ksour and Sagdoud in Gafsa in the west, and Menzel Habib in Gabes on the coast – would have a combined capacity of roughly 598 megawatts, with a total investment estimated at $560m. They would be granted to foreign multinationals. In the following months, concern about the proposed projects grew. On April 21, the Electricity and Gas Federation, a trade union organisation, held an urgent news conference laying out the concrete mechanics of what the parliament was being asked to approve. The concessions, they argued, would reduce STEG, Tunisia’s national public utility, to a mere grid operator, while electricity production would be handed to foreign companies.
Infrastructure costs would be paid by the public, while profits would leave with the corporations. This is a standard model, exported wholesale from the structural adjustment playbook of the 1990s, now repackaged in the language of green transition. Furthermore, according to the Tunisian Economic Observatory, the five concessions would benefit from extensive tax exemptions and stabilisation clauses that could undermine Tunisia’s fiscal sovereignty. There would be no meaningful technology transfer, weak local integration, and limited employment opportunities, which raised serious concerns about the developmental value of these projects. The observatory also reported that under these contracts, carbon credits generated through emissions reductions on Tunisian territory could be transferred to the multinationals rather than remaining a public asset. Concerns over this practice had already sparked opposition before these five concessions reached parliament. Last year, the Electricity and Gas Federation organised a strike denouncing the transfer of carbon credits to private developers. Notwithstanding the opposition, the five concessions came to entrench and expand this mechanism, allowing project developers to claim credits and use them to access international subsidy programmes. Incentives that were intended to support a national energy transition would thus be captured by private actors to boost their profits. The public awareness raised by the federation and independent media mobilised public opinion against the concessions. Workers and activists staged a protest outside the parliament. Nevertheless, the five concessions were voted through, and the contracts were approved. The energy minister and a senior Ministry of Industry official were dismissed to placate public anger and distance the ruling elite from the controversial projects. The right solution for the right deficit The concessions were pushed through with the justification that the country needs them to reduce its energy deficit, to cut its dependence on Algerian gas, which currently supplies about 60 percent of the country’s natural gas needs, and to meet its commitment to reach 35 percent renewables in the energy mix by 2030.
The BriefWire