Tunisia expands 130 MW solar plant with Japanese financing

Tunisia is set to host a 130 MW photovoltaic solar power plant financed by Japan under its Joint Crediting Mechanism (JCM). The project was selected in February 2026 to receive funding from the JCM carbon financing programme.

According to a report, the Tunisian Company for Electricity and Gas (STEG) will operate the facility while developers construct the plant in the Gabès region, marking continued Japanese support for renewable energy development in Tunisia.

Japan’s JCM is a government programme that supports low-carbon projects in other countries. The initiative between Japan and Tunisia to help finance international projects is aimed at reducing greenhouse gas emissions.

Also, the project represents the fourth MCC-supported solar project in Tunisia, following earlier installations in Sidi Bouzid and Tozeur.

A grant of up to 2 billion yen, equivalent to 37 million Tunisian dinars ($13.5 million), will help finance the project. The grant will cover part of the construction costs.

Marubeni, a Japanese company in partnership with an undisclosed French firm, will execute the project.

Tunisia is facing a growing energy deficit; according to a report, this initiative is a step toward helping Tunisia face a growing energy deficit to diversify the energy mix and reduce reliance on hydrocarbon imports.

Experts have described the Gabès project as progress in expanding large-scale solar capacity, especially in southern regions, contributing to Tunisia’s broader renewable energy development goals.

Tayssir Tlili, an energy engineer in Tunisia, said solar power in North Africa takes advantage of some of the best energy potential in the world, allowing it to develop its role as an exporter of renewable power.

She said the leader is Morocco, which has 1.7 GW of solar power in operation, including the Noor Ouarzazate complex (580 MW CSP/PV) and 4.5 GW in development through MASEN, aiming for 52% renewables by 2030, while also developing EU export capability with Xlinks cables.

“The second-place holder is Egypt, which has 3 GW, with the world’s largest solar park located in Benban (1.8 GW). Egypt is planning on a COMPER project that would bring a total of 10 GW of solar into the grid through 20GW of investment from the private sector in $20 billion foreign direct investment and would allow it to reach 42% renewables.”

Contribution to energy mix

Achraf Smaoui, a renewable energy and hydrogen expert at TuNur, a renewable energy transmission developer focused on Africa and the Mediterranean region, said the Gabès solar project is part of a broader pipeline of renewable energy developments that will generate electricity and inject it directly into the national grid.

He said it represents a significant addition to Tunisia’s growing renewable energy capacity and reflects the country’s shift toward larger, utility-scale projects.

“Like similar projects, it contributes to reducing reliance on natural gas by increasing the share of clean electricity in the energy mix, which Tunisia aims to raise to 35% by 2030. However, at a system level, Tunisia’s installed capacity remains heavily dominated by gas-fired generation. A 130 MW solar plant alone will not drastically change the overall percentage.”

Smaoui told Gas Outlook that the importance lies in capacity addition at scale exceeding the 100 MW mark, a transition from pilot initiatives to utility-scale deployment, which is essential for meeting national targets.

“Second, pipeline acceleration: while the plant is expected to generate over 200 GWh annually — roughly 1–1.5% of national electricity consumption — it is one of several projects, including those in Sidi Bouzid and Tozeur, that collectively drive progress toward the 2030 objective,” he added.

Balancing foreign reliance

Tlili said investment by foreigners, like that of JCM’s $13.5 million grant, circumvents Tunisia’s economic limitations, allowing EPC without substantial government borrowing.

She said partners such as Marubeni can bring established solar technologies (Japan has 80 GW of solar power capacity in country), teaching the locals through STEG about O&M.

“The JCM program allows carbon credits generation for Japan’s Article 6 compliance Paris Agreement goals, while acting as a marker for investment confidence, leading to potentially €1 billion and above private solar.”

On potential negative impacts, she said that too much dependence will trap the country into foreign technology standards, thus limiting its ability to manufacture products (solar module assembly in Tunisia is in its infant stages).

“Tunisia should balance the negative impact by complementing domestic policies like net metering. While Tunisia diversifies away from dependency on EU/China to Japan/France, they run the risk of geopolitical fluctuations; while local content requirements (40% requirement) can address this challenge, implementation remains an issue,” she added.

Smaoui also argued that in the current context, Tunisia faces an urgent need to reduce energy costs, diversify its energy mix, and lower its carbon footprint. He said accelerating the energy transition toward renewables is therefore a strategic priority.

“In this regard, reliance on foreign financing and technical expertise offers clear advantages. Access to concessional funding, such as Japan’s Joint Crediting Mechanism supported by Japan, helps alleviate pressure on public finances and enables faster deployment of large-scale projects. These partnerships also facilitate the transfer of technical skills, engineering expertise, and project management capabilities, improving overall efficiency and reliability.

“On the other hand, this approach presents some limitations. Ideally, such projects would be developed by Tunisian companies, allowing for greater local value creation and reinvestment of profits within the domestic economy.

“However, the current industrial and technical base remains limited in its ability to independently deliver large-scale renewable projects. As a result, there is a risk of prolonged dependence on foreign partners unless parallel efforts are made to strengthen local capacity and industry participation.”

Reducing fossil dependence

Smaoui noted that energy in Tunisia is heavily subsidised to support social and economic needs, with energy subsidies reaching approximately 5–6 billion Tunisian dinars in 2025, representing a significant burden on public finances.

He said, at the same time, that Tunisia has been a net energy importer since the late 1990s, with electricity demand growing steadily by around 4–5% annually over the past two decades.

“In this context, projects such as the Gabès solar plant can play a direct role in reducing the energy deficit. By generating clean electricity domestically, the project helps displace gas-fired power generation, thereby reducing the need for imported natural gas. This effect is particularly valuable during daytime peak demand periods, when solar generation is at its highest.

“While a single project will not eliminate the deficit, it contributes to a broader structural shift toward energy diversification. Over time, scaling up similar renewable projects can significantly reduce Tunisia’s dependence on hydrocarbons, improve energy security, and alleviate pressure on both the trade balance and the state budget,” he concluded.

(Writing by Samuel Ajala; editing by Sophie Davies)