Construction of Wind Farms
Construction of Wind Farms
Business Model Description
Build wind farms and increase the share of renewable energies in the energy mix
Expected Impact
Wind energy investments will increase the share of renewable resources in the domestic energy portfolio while reducing energy-related CO2 emissions.
How is this information gathered?
Investment opportunities with potential to contribute to sustainable development are based on country-level SDG Investor Maps.
Disclaimer
UNDP, the Private Finance for the SDGs, and their affiliates (collectively “UNDP”) do not seek or solicit investment for programmes, projects, or opportunities described on this site (collectively “Programmes”) or any other Programmes, and nothing on this page should constitute a solicitation for investment. The actors listed on this site are not partners of UNDP, and their inclusion should not be construed as an endorsement or recommendation by UNDP for any relationship or investment.
The descriptions on this page are provided for informational purposes only. Only companies and enterprises that appear under the case study tab have been validated and vetted through UNDP programmes such as the Growth Stage Impact Ventures (GSIV), Business Call to Action (BCtA), or through other UN agencies. Even then, under no circumstances should their appearance on this website be construed as an endorsement for any relationship or investment. UNDP assumes no liability for investment losses directly or indirectly resulting from recommendations made, implied, or inferred by its research. Likewise, UNDP assumes no claim to investment gains directly or indirectly resulting from trading profits, investment management, or advisory fees obtained by following investment recommendations made, implied, or inferred by its research.
Investment involves risk, and all investments should be made with the supervision of a professional investment manager or advisor. The materials on the website are not an offer to sell or a solicitation of an offer to buy any investment, security, or commodity, nor shall any security be offered or sold to any person, in any jurisdiction in which such offer would be unlawful under the securities laws of such jurisdiction.
Country & Regions
- Tunisia: North-East
- Tunisia: Centre-East
- Tunisia: South East
Sector Classification
Renewable Resources and Alternative Energy
Development need
Tunisia's domestic energy requirements are nearly completely met by fossil fuels. Tunisia imports the majority of its energy, despite its modest natural gas and oil reserves (1). Renewable energy accounts for 3% of the overall electricity production (2).
Policy priority
Tunisia is dedicated to a massive green energy production program with the goal of increasing the proportion of renewable energy to 30% by 2030 (3) and increasing energy efficiency and renewable energy development, with a 30/30 goal of reducing primary energy consumption by 30% by 2030 (2).
Gender inequalities and marginalization issues
According to an ANME-GIZ study published in 2019, the low percentage of women in the energy and climate change sectors is due to five factors: insufficient family support, stereotypes about women's ability to lead, a sector still in its infancy, and limited access to financing due to a lack of property, which stifles female entrepreneurship (4).
Investment opportunities introduction
Renewable energy has significant potential in the country, and the government's goal for 2030 is achievable if present efforts continue. (8) The goals are primarily focused on (i) Tunisia's solar plan; (ii) a project to promote solar water heaters; and (iii) wind energy development (3).
Key bottlenecks introduction
Renewable energy's proportion in power generation was less than 4% in 2020, far below the goal set (12%) (5). Private sector involvement in renewable energy has been restricted, owing in part to the weight of Tunisian Company of Electricity and Gas (STEG), limited political will to open the industry, and a lack of financing (6).
Alternative Energy
Development need
Energy balance is increasingly in deficit in Tunisia. Tunisia is also exposed to high levels of air pollution due to the extensive use of fossil fuels in industrial, transport, and urban activities. Of the USD 4.4 billion financing need for renewable energies, 42% is estimated specifically for wind energy (14). Wind energy potential in Tunisia is projected to be 8,000 MW (7).
This demonstrates the critical need for wind farm development to fully utilize the country's potential.
Policy priority
Tunisia has been pursuing wind energy development for about two decades, as demonstrated by the STEG's construction of 54 MW wind farms in Sidi Daoud and 190 MW wind farms in Bizerte (8).
Gender inequalities and marginalization issues
Local communities sometimes object to wind farms due to concerns about environmental effects or land rights (9).
Investment opportunities introduction
By 2030, the government intends to issue tenders for about 3.5 gigawatts of renewable energy, valued at approximately USD 3.5 billion, or approximately 350 MW per year for the following decade. Wind farms will account for one-third of the projects, while solar photovoltaics will account for two-thirds (10).
Key bottlenecks introduction
While the government's five-year economic strategy (2016 – 2020) includes a commitment to "green economic growth," it took until January 2019 for the Tunisian Ministry of Industry to grant the country's first wind energy concessions to international firms (11).
Wind Technology and Project Developers
Pipeline Opportunity
Construction of Wind Farms
Build wind farms and increase the share of renewable energies in the energy mix
Business Case
Market Size and Environment
USD 100 million - USD 1 billion
5% - 10%
244 MW installed wind capacity as of 2020 (12)
The Government of Tunisia plans to launch tenders for about 3.5 GW of renewable energy, worth roughly USD 3.5 billion, by 2030, one third of which will be for wind energy (12).
The global wind energy market was worth USD 62.1 billion in 2019 and is expected to reach USD 127.2 billion by 2027, growing at a 9.3% compound annual growth rate between 2020 and 2027.
Indicative Return
5% - 10%
Return profile information was acquired from a wind energy producer in the Maghreb region.
Investment Timeframe
Medium Term (5–10 years)
Investment timeframe information was acquired from experts operating in the Maghreb region in wind energy.
Ticket Size
> USD 10 million
Market Risks & Scale Obstacles
Capital - CapEx Intensive
Market - High Level of Competition
Impact Case
Sustainable Development Need
Energy industry in Tunisia stay highly dependent to Fossil fuel market (99%), meanwhile oil production has declined while electricity consumption has increased. This situation led to transform the country into an energy importer, leading among others factors to a trade deficit (13).
As Tunisia is exposed to climatic extremities such as drought, which stands to be exacerbated by climate change, the transition to clean energy resources is crucial for the country with the current share of renewable energy remaining insufficient.
Gender & Marginalisation
While women are mainly present in administration position, they are in minority in the energy sector, and even more at managerial positions where men occupy 94% (4).
Expected Development Outcome
The investment in wind turbines allows Tunisia to get a little closer to its environmental ambitions, including its commitments made at COP 21 and COP 22.
Investment in this IOA will allow the reinforcement of the network and the production capacity to reach a capacity of 3815 MW by 2030 as the Tunisian Solar plan planned to (13).
Investment in this IOA would enable to reduce carbon intensity in the energy sector, and work towards the government's objectifs to reduce it by 46% compared to 2010.
Gender & Marginalisation
By facilitate work access to women toward renouvable energy industry, gender equality become respected and would allow women to be more emancipated.
Rural and poor areas could benefit from lower electricity cost
Primary SDGs addressed
7.2.1 Renewable energy share in the total final energy consumption
7.b.1 Installed renewable energy-generating capacity in developing countries (in watts per capita)
7.1.1 Proportion of population with access to electricity
7.1.2 Proportion of population with primary reliance on clean fuels and technology
3.85 (11)
0.118868 (11)
99.80% (11)
99.10% (11)
N/A
30% by 2030 (11)
1 (11)
1 (11)
13.2.2 Total greenhouse gas emissions per year
2.65 tCO2/capita (11)
0 (11)
Secondary SDGs addressed
Directly impacted stakeholders
People
Gender inequality and/or marginalization
Planet
Corporates
Public sector
Indirectly impacted stakeholders
People
Outcome Risks
Wind farms may negatively impact the wildlife, especially birds, and cause noise pollution affecting nearby communities.
Impact Risks
Wind power generation depends on various external factors, including weather conditions and level of wind, which may limit impact.
Inefficiencies and execution issues throughout the wind farms' construction and operation may limit the resulting impact.
Impact Classification
What
Larger share of renewable energies in the national energy mix, cleaner domestic energy production, lower national energy dependency and lower CO2 emissions caused by the energy sector.
Risk
While wind farm model is proven, external factors such as weather conditions and the level of wind, and potential issues during plant construction and operation require consideration.
Impact Thesis
Wind energy investments will increase the share of renewable resources in the domestic energy portfolio while reducing energy-related CO2 emissions.
Enabling Environment
Policy Environment
Renewable energy project in Tunisia: Ministry of Industry and Small and Medium Companies / ANME / Deutsche Zusammenarbeit Tunisian Solar Plan is to establish a capacity of 1755 MW for wind power
ENME: The positive indicators of wind energy make Tunisia want to develop considerably this renewable energy in order to diversify the energy mix but also to reduce greenhouse gas emissions
National Sustainable Development Strategy 2015-2020: Willingness to establish sustainable consumption and production integrating the concept of green economy, including wind power though the private sector.
Financial Environment
Financial incentives: Law n2005-82: This law set up a system of financing the energy management device with the aim of "supporting actions aimed at rationalizing energy consumption and promoting renewable energy". This framework provides for subsidies to be granted for the production of electricity from renewable energy sources.
Project of National Interest: In order to attract investments including renewable energy sector, this project stipulates grants and tax reduction. To be eligible, the investment size should start to 16 million EUR or create 500 jobs.
Fiscal incentives: Fiscal incentives: Law No. 2007-8 of February 14, 2017 on the revision of the tax benefits system: Investments made in the renewable energy sector benefit from deductions from the base of personal income tax, corporate tax, income or profits from investments: 1st group of regional development zones: for 5 years 2nd group of regional development zones: for 10 years
Regulatory Environment
Law 2004-72: This law establishes energy management as a national priority and opens the way to the use of renewable energies and primarily to solar and wind energy.
Law n2009-7: This law came to complete the law of 2004 by authorizing the self-production of electricity from renewable energies with the right to sell the excess has STEG in the limit of 30% of the electricity produced.
Law n2015-12 on the production of electricity from renewable energies: Promote the initiatives of independent producers and liberalize the production and export of electricity.
Marketplace Participants
Private Sector
Abo Wind AG (Ben Arous), VSB Énergies renouvelables (Mateur) Carthage Power Company, Qair
Government
The National Agency for Energy Transformation (ANME), Tunisian Electricity and Gas Company (STEG), the General Direction of Electricity and Renewable Energies (DGEER), The Technical Commission of private production of electricity from renewable energies (CTER)
Multilaterals
The National Agency for Energy Transformation (ANME), Tunisian Electricity and Gas Company (STEG), the General Direction of Electricity and Renewable Energies (DGEER), The Technical Commission of private production of electricity from renewable energies (CTER)
Public-Private Partnership
STEG-ER, Akuo Energy Afrique/ STEG, UPC Tunisia Renewables BV (Jebel Kochbata), Qair (Bizerte Sud)
Target Locations
Tunisia: North-East
Tunisia: Centre-East
Tunisia: South East
References
- (1) Regional Center for Renewable Energy and Energy Efficiency. Tunisia. https://www.rcreee.org/member-states/tunisia/4054
- (2) IRENA, 2021. The Republic of Tunisia Renewables Readiness Assessment. https://www.irena.org/-/media/Files/IRENA/Agency/Publication/2021/Jun/IRENA_RRA_Tunisia-2021.pdf
- (3) The Republic of Tunisia, 2019. Voluntary National Review 2019. https://sustainabledevelopment.un.org/index.php?page=view&type=111&nr=23372&menu=35
- (4) MED ENER, 2019. ANME HIGHLIGHTS SMALL PERCENTAGE OF WOMEN IN TUNISIA’S ENERGY MANAGEMENT SECTOR. https://www.medener.org/en/anme-highlights-small-percentage-of-women-in-tunisias-energy-management-sector/
- (5) The Republic of Tunisia, 2021. Voluntary National Review 2021. https://sustainabledevelopment.un.org/content/documents/279442021_VNR_Report_Tunisia.pdf
- (6) EBRD, 2018. Tunisia Country Strategy 2018-2023. http://www.ebrd.com/documents/strategy-and-policy-coordination/tunisia-country-strategy.pdf
- (7) Tunisian Institute of Competitiveness and Quantitative Studies, 2017. Energy Policy in Tunisia. http://www.itceq.tn/files/developpement-durable/politique-energetique.pdf
- (8) Ministry of Industry and SMEs and ANME, 2019. PROJETS D’ÉNERGIE RENOUVELABLE EN TUNISIE. https://www.energiemines.gov.tn/fileadmin/docs-u1/Guide_Detaillé_Energie_Renouvelable_Tunisie.pdf
- (9) Business and Human Rights Resource Centre, 2016. Towards Responsible Renewable Energy. https://media.business-humanrights.org/media/documents/files/Towards_Responsible_Renewable_Energy_Briefing_-_Final_1.pdf
- (10) International Trade Administration, 2021. Tunisia - Country Commercial Guide: Electrical Power Systems and Renewable Energy. https://www.trade.gov/country-commercial-guides/tunisia
- (11) Sustainable Development Solutions Network (SDSN) and the Bertelsmann Stiftung, 2021. Sustainable Development Report 2021. Tunisia Profile. https://dashboards.sdgindex.org/profiles/tunisia
- (14) Republic of Tunisia, October 2021. Contribution Determinee au niveau National (CDN) actualisee. https://www4.unfccc.int/sites/ndcstaging/PublishedDocuments/Tunisia%20First/Tunisia%20Update%20NDC-french.pdf
- (12) International Trade Administration, 2021. Tunisia Country Commercial Guide: Electrical Power Systems and Renewable Energy. https://www.trade.gov/country-commercial-guides/tunisia
- (13) Solar Power Europe/Tunisia, 2020. Solar Investment Opportunities- Emerging Markets taks force report. https://www.solarpowereurope.org/wp-content/uploads/2020/02/SolarPower-Europe_Tunisia-Solar-Investment-Opportunities.pdf