The Tunisian Electricity and Gas Company (STEG) is heavily indebted, with its debt reaching around 7.356 billion dinars as of June 23, 2026, while unpaid receivables from various public and private clients amount to approximately 6.061 billion dinars.
During a hearing before the Finance and Budget Committee of the Assembly of People’s Representatives (ARP), company officials stressed that this situation requires additional financial resources and investments to ensure the company’s sustainability and its ability to implement planned projects.
The session was dedicated to reviewing two draft laws approving guarantee agreements in favor of STEG. The first agreement was signed with the International Bank for Reconstruction and Development (IBRD) for €384.8 million (around 1.27 billion dinars), while the second, also with the IBRD acting as an implementing entity for the Clean Technology Fund (CTF), is valued at $30 million (around 87 million dinars).
According to ARP’s official page, the financing falls within the framework of a program contract for the 2024–2028 period signed between the State and STEG on February 5, 2025.
This contract includes a set of reforms and quantitative targets aimed at restoring the company’s financial balance and improving its technical, commercial, and governance performance.
Officials said STEG is a key pillar of national energy security but is facing a difficult financial situation due to several factors, notably tariffs that do not cover the real cost of electricity and gas production, accumulated subsidies, rising debt, increasing energy losses and the impact of fluctuations in oil prices and the dinar’s exchange rate on production costs.
Gap between selling price and production cost
STEG representatives also noted that electricity production in Tunisia still relies on natural gas for more than 95% of output, with fuel costs accounting for around 72% of electricity production costs and 89% of natural gas production costs.
They explained that the average selling price of electricity in 2025 did not exceed 290.7 millimes per kilowatt-hour (kWh), compared to a production cost of 456.3 millimes, while the average selling price of natural gas stood at 647.4 dinars per ton of oil equivalent (toe), against a production cost of about 1,497.7 dinars.
Key objectives of the 2024–2028 program contract include increasing the share of renewable energy to 27% of electricity production by 2028 and 35% by 2030, reducing energy supply costs by 23%, cutting public subsidies by more than 2 billion dinars, and improving STEG’s net result by around 3 billion dinars. The plan also aims to mobilize around $2.8 billion in private investment, create new jobs, and reduce carbon emissions.
The program is expected to bring 500 MW of renewable energy into operation and secure additional contracts for 1,000 MW, alongside upgrading transmission and distribution networks and reducing energy losses, which have reached about 19.7%, a significant share of which is attributed to theft and illegal grid connections.
The financing mechanism is based on the World Bank’s results-based financing model, where disbursements are tied to the achievement of predefined indicators related to renewable energy development, financial and operational performance improvements, and strengthened governance and transparency.
Parliamentary discussions focused on the impact of new borrowing on state and company debt, the appropriateness of long-term loans, debt recovery mechanisms from public and private institutions, reducing energy losses, combating electricity theft and the readiness of infrastructure to accommodate new renewable energy projects.
Reducing dependence on imported hydrocarbons
Government and STEG representatives said several renewable energy projects are already at advanced stages, with contracts signed for 500 MW of renewable electricity production and 262 MW expected to come online in 2025 and 2026, strengthening energy supply security and reducing dependence on imported hydrocarbons.
At the end of its work, the Finance and Budget Committee said the two draft laws form part of a broader structural reform program aimed at improving STEG’s performance, boosting renewable energy investment, strengthening governance in the energy sector, and consolidating national energy security and sovereignty.
It stressed the importance of continued monitoring of reform implementation to ensure the achievement of expected goals.
The committee decided to continue reviewing the two draft laws pending examination of the 2024–2028 program contract between STEG and the Tunisian state.
