(Headline corrected to Euro from US Dollar)

The European Bank for Reconstruction and Development (EBRD) announced on Friday that it is providing a €45 million financing package to Société Tunisienne de l’Electricité et du Gaz (STEG) for the construction of a 200-km electricity interconnector between Tunisia and Italy.

The package will assist STEG in financing the construction of the ELMED project, a 600 megawatts (MW) High Voltage Direct Current (HVDC) submarine power cable connecting the Tunisian and Italian electricity transmission grids by 2028.

The €920 million ELMED will be implemented jointly by STEG, Tunisia’s state-owned national electricity and gas utility company and TERNA, the Italian transmission system operator.

European Union’s (EU) Connecting Europe Facility (CEF) will provide an investment grant of €307.6 million for the project, EBRD said in a press statement.

The EBRD’s financing is dedicated to the construction of ELMED on the Tunisian side and is part of a €125 million loan package co-financed by the European Investment Bank (EIB) and Kreditanstalt für Wiederaufbau (KfW).

In addition, the World Bank is financing the converter station and associated transmission infrastructure in Tunisia.

With a €5 million grant from the EU Neighbourhood Investment Platform, the EBRD financing will be accompanied by a comprehensive technical cooperation package for policy dialogue, to support the regulatory setup to operationalise and commercialise the ELMED interconnector.

It will also promote the development of a decarbonisation roadmap for Tunisia’s energy sector, ensuring its alignment with the Paris Agreement. In addition, the roadmap will aim to develop a guarantee-of-origin scheme in Tunisia that will be key to achieving the decarbonisation targets, by building a renewable energy framework in line with the EU regulations.

(Editing by Anoop Menon) (anoop.menon@lseg.com)

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