Tunisia’s economy fell dramatically in 2023 due to several factors, including the aftermath of COVID-19, a severe drought and financial issues. These challenges have made Tunisia one of the slowest countries in the Middle East and North Africa to recover and stabilize its economy. The economic crisis, exacerbated by COVID-19, has led to a projected increase in multidimensional poverty, with the national poverty line expected to decline in 2024.

However, there is hope on the horizon. The World Bank has helped create a plan for recovery, showing significant improvement. The initiative, titled “The Renewed Energy to the Economy,” aims to boost the economy by 2.4% in 2024. One key strategy is to enhance Tunisia’s renewable energy resources, which is expected to contribute to economic growth.

The Impact of Expanding Renewable Energy in Tunisia

About 90% of Tunisia’s electricity is generated from natural gas, with more than half of it imported due to rising demand. By harnessing wind and solar resources, Tunisia could meet its electricity needs more sustainably. The country has the potential to generate up to 280 gigawatts (GW) of solar power, while its current peak electricity generation stands at only 5 GW. This significant capacity could greatly benefit the nation. This shift would also allow for the development of energy exports and decrease the amount of finances spent on importing fossil fuels, which can be directed elsewhere.

Presently, the cost of natural gas accounts for more than 70% of the cost of electricity produced. The plan sets a goal of generating 35% of Tunisia’s electricity from renewable sources, such as wind and solar, by 2030. This would mark a significant achievement, considering the country currently utilizes only 3% of its renewable resources. The total projected investment for this project is $4.5 billion. One of the key support systems for this initiative involves enhancing the electricity connection between Tunisia and Italy.

Alexandre Arrobbio, the World Bank’s Country Manager for Tunisia, says, “Despite ongoing challenges, there are significant opportunities for Tunisia to transform and strengthen its economy. With strategic investments, particularly in renewable energy, Tunisia could significantly enhance its economic resilience and sustainability.” The new transformative plan is ambitious and faces several environmental challenges, but it could be the economic solution Tunisia needs. Arrobbio suggests that transitioning to renewable resources and reducing dependence on international fossil fuels would not only improve the country’s financial position but also advance its move toward a sustainable lifestyle, adding a layer of security for Tunisia’s future.

Key to Sustainability

Tunisia needs to reduce the cost of electricity, especially given the rise in oil prices since 2022 and the reliance on natural gas for electricity production. The increasing cost of electricity from fossil fuels is becoming unsustainable. Renewable energy can significantly lower overall electricity costs, particularly amid volatile international energy prices. Revitalizing renewable energy has the potential to improve Tunisia’s economy, reduce poverty and move toward greater financial independence and sustainability.

– Charlotte Johnston

Charlotte is based in London, UK and focuses on Good News, Technology and Solutions for The Borgen Project.

Photo: Flickr