MIGA Guarantee to Propel Tunisia’s Renewable Energy Generation
WASHINGTON, August 06, 2024 – The Multilateral Investment Guarantee Agency (MIGA), part of World Bank Group Guarantees, has issued a guarantee of €18.45 million to AEOLUS SAS (France), joint venture between CFAO SAS (France) and Eurus Energy Holdings Corporation (Japan), each fully owned subsidiary of Toyota Tsusho Corporation (Japan) for their investments in Scatec Sidi Bouzid Mezzouna PV Power and Scatec Tozuer PV Power in Tunisia.
The guarantee covers the risks of transfer restriction, expropriation, war and civil disturbance, and breach of contract for 20 years. In addition to its own resources, MIGA is utilizing the Renewable Energy Catalyst Trust Fund to provide a first-loss layer to support first grid-connected renewable independent power producers in the country. These projects contribute to the country’s efforts to achieve energy self-sufficiency by utilizing its domestic renewable resources and are expected to reduce GHG emissions of 108,000 tons of CO2 equivalent per year.
"Our guarantees catalyze the renewable energy market in middle-income countries," said Hiroshi Matano, MIGA Executive Vice President. "The two solar plant projects in Tunisia showcase the important role of independent power producers in increasing renewable energy production at a competitive cost in developing countries.”
The guarantee will enable the development, financing, construction, operation, and maintenance of two 50-MW grid-connected solar power plants and associated interconnection facilities, including overhead transmission lines in Sidi Bouzid and Tozeur governorate, Tunisia. The projects are being developed jointly with SCATEC (Norway) and financed by the European Bank for Reconstruction and Development (EBRD) and Proparco (France). The two projects support the government of Tunisia’s goal of promoting energy efficiency and reducing reliance on imported energy through the development of renewable energy. Electricity generated from the projects will be sold to a state-owned enterprise, Société Tunisienne de l’Electricité et du Gaz, under 20-year power purchase agreements.
Nippon Export and Investment Insurance (NEXI), the Japanese Export Credit Agency, is reinsuring a portion of MIGA’s exposure. The project is also aligned with the MIGA and NEXI’s Cooperation Agreement signed in May 2024.
The projects made possible by private investors SCATEC/AEOLUS, NEXI, and MIGA of the World Bank Group, each drawing their areas of expertise, serve as an exemplary demonstration of the Tunis Declaration adopted at the 2022 Tokyo International Conference on African Development (TICAD). These projects contribute toward sustainable economic growth by deploying renewable energy projects through Public-Private Partnership framework.
“These projects mark Aeolus’s first commemorative investment since our establishment in March 2024. We are also grateful for the cooperation and efforts of the governments of Tunisia and Japan, as well as MIGA, SCATEC, the lenders, advisors, and the everyone involved in bringing these projects to fruition. Aeolus remains committed to contributing to the development of Tunisia and other African countries through renewable energy projects,” said Hideharu Toba, President of AEOLUS.
Tunisia aims to increase renewable energy production to 35 percent by 2030. Currently, about 94 percent of the country’s power generation comes from gas-fired power plants, with gas imported from Algeria. The projects are expected to reduce Tunisia’s exposure to gas price volatility and exchange rate fluctuations, easing the fiscal burden on the government and helping to preserve its foreign reserves while helping meet Tunisia’s growing energy demand.
The projects align with the strategic objectives of the World Bank Group Climate Change Action Plan to promote climate mitigation measures and contribute to green, resilient, and inclusive development. The World Bank Group aims to catalyze the private sector to support the government of Tunisia’s ambitious renewable energy program and diversify the energy mix.
About Toyota Tsusho Corporation
Headquartered in Japan, Toyota Tsusho Corporation (TTC) is a Japanese conglomerate and is a member of the Toyota Group. TTC has myriad businesses varying from automotive related businesses to metals, machinery, infrastructure, energy, chemicals, food, consumer products, and ICT, with global operations in about 130 countries.
About World Bank Group Guarantees
Initiated in 2024, World Bank Group Guarantees consolidates all guarantee products and experts from across the World Bank Group institutions at MIGA. It provides a simplified and comprehensive menu of guarantee solutions, enabling clients to select the instrument that best suits their needs. The platform streamlines processes, removes redundancies, and provides greater accessibility by de-risking investments in developing countries. Its goal is to boost the WBG’s annual guarantee issuance to $20 billion by 2030.
For more information about the guarantee platform, please visit: https://www.worldbank.org/wbgguarantees
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Contact:
In Washington: Elizabeth Howton, (202) 458-5922 or ehowton@worldbankgroup.org