STEG - TUNISIA ITALY POWER INTERCONNECTION

The project concerns the implementation of a High Voltage Direct Current (HVDC) link interconnecting Tunisia and Italy across the Strait of Sicily and the associated connections to the respective national grids. The HVDC link is designed as a monopole with sea return, nominal capacity of 600 MW, DC voltage of 500 kV and a total route length of 224 km, of which 200 km offshore. The offshore route crosses Tunisian and Italian waters. The project has been designated as part of the Global Gateway.

The project aims at developing cross-border trade of electricity between the EU and Tunisia, facilitating the deployment of renewables, and improving the resilience of the Tunisian power system to demand/supply mismatches, thereby contributing to support stable economic growth and the transition to a low carbon energy system.

The Project will establish the first electricity interconnection between Tunisia and Italy through an HVDC submarine cable of about 200km between the Cap Bon peninsula (Tunisia) and Sicily (Italy). This cross-border infrastructure is a Project of Common Interest (PCI) and benefits from a significant CEF grant from the EU. It is part of the European Green Deal, REPowerEU and Global Gateway initiatives. The Project is aligned with the Team Europe Initiative (TEI) "Tunisia-Investment" as it will result in new economic infrastructure being constructed and will contribute to the transition towards decarbonisation of the economy. It will contribute to achieving national and EU long-term energy and climate goals. It supports the EIB priority policies related to securing the enabling infrastructure and to climate action objectives. The interconnection will enable cross-border trade of electricity between Tunisia and Italy - it will reduce generation costs and renewable curtailment in Italy and in the long run is expected to allow Tunisia to export renewables to Europe, thereby reducing environmental and climate externalities. The Project also addresses market failures by improving cross border coordination and contributing to security of supply under stress scenarios. Thanks to the reduction of generation costs and GHG emissions and by enabling integration of increasing shares of renewables curtailment, the Project is deemed to deliver very good economic and excellent social benefits. The governance of the Project will be improved via an EC funded technical assistance and is rated as fair. The employment impact of the Project is rated Fair, according to the Bank's methodology.

The Bank will require the Promoter to comply with national legislation, relevant EU directives and principles and the EIB's Environmental and Social Standards.

The Bank will require the Promoter to ensure that the Project will be implemented in accordance with the Bank's Guide to Procurement.

This operation falls under the Global Europe NDICI Mandate (Investment Window 1) - subject to the EC's confirmation of eligibility - and will benefit from the EU EFSD+ comprehensive guarantee on a fall-back basis. The project, which benefits from a EUR 307.6m grant provided by the EU under the "Connecting Europe Facility", is included in the list of Projects of Common Interest (PCI) by the European Commission due to its strategic importance for the security and energy sustainability of Tunisia and Italy. The project is fully aligned with the NDICI Mandate and the EU New Agenda for the Mediterranean, especially the "Green transition: climate change resilience, energy and environment" Policy Area, as well as the EU flagships, notably flagship 5 "Connected economies". The Project is also aligned with the Team Europe Initiative (TEI) Tunisia-Investment as it would further integrate Tunisia to the global economy, while improving economic infrastructure for a resilient and carbon-neutral economy.