The European Bank for Reconstruction and Development (BERD) has approved an additional 3.03 million euros in financing for the Menzel Habib solar power project in the governorate of Gabès, Tunisia. This brings the BERD's total commitment to 37.74 million euros, up from 34.71 million euros previously. The project, now valued at 107.2 million euros, aims to develop a solar power plant with a capacity of 100 megawatts.
The increase in financing is due to rising engineering, procurement, and construction costs, as well as higher equipment costs. The BERD has also set aside additional funds to cover potential contingencies. This latest financing represents an 8.7% increase in the BERD's initial commitment. The project is being developed by Menzel Parc Solaire, a project company wholly owned by French renewable energy group Voltalia.
The project involves not only the construction of the solar power plant but also the necessary infrastructure to connect it to the national grid. A 3 million euro subsidy from the European Union's Neighbourhood Investment Platform will contribute to the financing of these grid connection facilities, including a substation and high-voltage transmission lines. These infrastructure assets will subsequently be transferred to the Tunisian Electricity and Gas Company (STEG) under a concession agreement.
The electricity generated by the plant will be sold to STEG under a 25-year purchase agreement. The BERD views the project as a contribution to Tunisia's renewable energy development objectives. The plant is expected to add significant solar power capacity to the grid and help reduce carbon dioxide emissions. Voltalia announced in December 2024 that it had won a 139 megawatt solar project in Menzel Habib.
However, the BERD's financing documents describe a 100 megawatt photovoltaic plant. The project cost has risen to 107.2 million euros, up from the initial estimate. The BERD had initially approved a 34.71 million euro loan on December 17, 2025. The additional financing brings the total project cost closer to completion, enabling the development of much-needed renewable energy infrastructure in Tunisia.
Tunisia aims to increase its renewable energy capacity as part of its energy transition strategy. The Menzel Habib project is a significant step towards achieving this goal. The project will also create economic opportunities and jobs during the construction and operation phases. The BERD's involvement in the project demonstrates its commitment to supporting sustainable development in Tunisia.
The project is expected to be completed and connected to the grid in the near future, providing clean energy to thousands of households and businesses. The BERD's financing and Voltalia's expertise will help drive the growth of Tunisia's renewable energy sector. The project's success will serve as a model for future renewable energy projects in the region.
Key points
- The BERD has approved an additional 3.03 million euros in financing for the Menzel Habib solar power project in Tunisia.
- The project aims to develop a 100 megawatt solar power plant and contribute to Tunisia's renewable energy development objectives.
- The project will add significant solar power capacity to the grid and help reduce carbon dioxide emissions.
