EBRD, EU and TCX launch green financing framework in Tunisia

• EBRD and EU launch Green Economy Financing Facility in Tunisia
• New financing programme for private sector to enhance competitiveness through high-performance technologies and practices
• Currency Exchange Fund to provide Tunisian banks with foreign exchange hedging, supported by the EU, at preferential pricing

The European Bank for Reconstruction and Development (EBRD) is joining forces with the European Union (EU) to launch the Green Economy Financing Facility programme in Tunisia, aiming to strengthen the competitiveness of the private sector and support the country’s transition toward an environmentally sustainable economy.

The landmark initiative – the first of its kind to be launched in Tunisia – will provide €59 million of senior unsecured loans to up to six local financial institutions for on-lending to micro, small and medium-sized enterprises (MSMEs). The financing will target investments in energy-efficiency, renewable-energy, climate-adaptation and circular-economy investments.

The new programme is also supported by the Currency Exchange Fund (TCX) and will provide Tunisian banks with a foreign exchange hedging mechanism at reduced pricing, supported by the EU.

Over the past three decades, Tunisia has seen a rise in its greenhouse gas (GHG) emissions, driven largely by energy-intensive industrial growth. Recognising the importance of sustainable development, Tunisia updated its nationally determined contributions in 2021, setting an ambitious target of reducing carbon intensity by 45 per cent by 2030. The new GEFF framework will support this target by enabling more MSMEs to invest in climate-adaptation and climate-mitigation technologies, helping to cut energy consumption and GHG emissions significantly. These investments are expected to reduce CO2 emissions by more than 26,296 tonnes per year.

The facility will be complemented by a comprehensive technical cooperation package from the EBRD and the European Union, also encompassing capacity-building programmes for partner financial institutions, with a focus on promoting equal access to green finance for women and men. In addition, the package will provide EU-funded investment incentives to sub-borrowers that have successfully completed and verified their adoption of high-performance technologies. Globally, the GEFF programme operates through a network of 191 local financial institutions across 29 countries, supported by €6.3 billion of EBRD finance. This has enabled more than 231,000 clients to jointly avoid more than 10 million tonnes of CO2 emissions per year.

Since the start of its operations in Tunisia in 2012, the EBRD has invested more than €2.78 billion in 83 projects across the country, 66 per cent of which are in the private sector.