Tunisia is running out of power, and the intellectual class is arguing over vocabulary.
Every summer, the air conditioners hum, the grid groans, and the rolling blackouts begin. The country faces a staggering 3.8 billion dollar energy deficit, accounting for more than half of its total trade gap. More than 60 percent of its natural gas comes from a single, increasingly volatile neighbor: Algeria. Yet, when the state attempts to bring utility-scale solar projects online, the response from activists and union leaders is a chorus of predictable outrage. You might also find this connected coverage interesting: The Geopolitics of Moral Capital: Why Development Banks Are Lobbying the Vatican on Critical Minerals.
They call it green colonialism. They call it the corporate theft of the Tunisian sun. They claim that five newly approved solar concessions totaling 598 megawatts are a neoliberal conspiracy to hollow out the state electricity company, Société Tunisienne de l’Électricité et du Gaz (STEG).
This narrative is a delusion. It is a comforting, academically fashionable excuse that masks a far uglier truth. As discussed in detailed articles by Investopedia, the implications are widespread.
The resistance to Tunisia’s renewable transition is not a noble defense of national sovereignty against foreign corporate raiders. It is a desperate, rear-guard action fought by a bankrupt state monopoly and its union protectors to shield their own terminal inefficiencies. By framing every solar panel as a neo-imperialist plot, they are guaranteeing that ordinary Tunisians remain trapped in an expensive, fossil-fueled status quo.
The current debate is entirely wrong. The choice isn't between pure state control and foreign corporate exploitation. The real failure is the refusal to build a decentralized energy market where Tunisians can power themselves.
The Myth of the Stolen Sun
The anti-privatization lobby argues that allowing foreign multinationals to build solar plants in regions like Sidi Bouzid, Gafsa, and Gabes means exporting Tunisian wealth while dumping the infrastructure costs on the public. They point to Power Purchase Agreements (PPAs) as predatory contracts that force STEG to buy power it cannot afford.
Let us look at the actual mechanics of these agreements.
STEG currently buys Algerian natural gas in hard currency at international market prices. It then burns that gas in inefficient, aging thermal plants, producing electricity at a cost that far exceeds what the utility charges consumers. The difference is covered by massive, state-funded subsidies that are tearing a hole through the national budget.
When a foreign consortium wins a concession to build a 100-megawatt solar farm in Kairouan, they bear the entire capital expenditure of purchasing the photovoltaic cells, installing the inverters, and clearing the land. They offer a fixed, long-term PPA rate that is significantly lower than the marginal cost of generating electricity from imported gas.
I have analyzed these project finance structures across North Africa. The math does not lie. The state utility is not being robbed; it is being offered a life support line. To claim that buying cheaper solar electricity from a private operator hurts the public pocket while advocating for the continued purchase of expensive foreign gas is a bizarre form of economic masochism.
The argument that these projects do not provide domestic employment is equally hollow. A utility-scale solar project is an infrastructure installation, not a manufacturing plant. It requires heavy labor during the construction phase and a lean engineering crew for operations and maintenance. Expecting a solar farm to permanently employ thousands of bureaucratic workers is a fundamental misunderstanding of the technology. The economic value of solar power lies in cheap, clean electrons that reduce the input costs for every other domestic industry, from textile factories in Monastir to agricultural pumps in Medenine.
The Anchor Dragging Down the Transition
To understand why a country with 3,000 hours of sunlight per year generates less than 5 percent of its electricity from clean sources, you must understand STEG.
The state utility controls more than 90 percent of the country’s generation capacity and retains an absolute monopoly on transmission and distribution. It is an organization buried under billions of dinars of debt, crippled by non-revenue electricity—technical losses and uncollected bills—and dictated by a powerful labor union, the Fédération Générale de l’Électricité et du Gaz.
For years, the union has viewed any private participation in the power sector as an existential threat. When the 2015 renewable energy law was passed to allow independent power producers to sell electricity to the grid, the union effectively blockaded its implementation. They refused to connect privately built projects to the national transmission network. They occupied substations. They turned a regulatory framework into a physical battleground.
This is not a defense of public service. It is a defense of patronage.
A state-run monopoly has no incentive to innovate, optimize its grid management, or adapt to the variable nature of solar and wind energy. When the World Bank or the African Development Bank offers financing to modernize the grid, the projects stall because any push toward transparency and operational efficiency threatens the union’s grip on hiring and resource allocation.
The tragedy is that the loudest critics of privatization are defending a status quo that is already private in the worst possible way. Rich Tunisians and major industrial operations are already buying diesel generators to survive the summer blackouts. The wealthy are insulating themselves from the failures of the state utility, leaving the poorest citizens to bear the brunt of a collapsing grid.
The Illusion of the European Green Bridge
The latest target of the anti-colonial critique is the ELMED project: a 220-kilometer, 600-megawatt undersea high-voltage direct current cable connecting Cap Bon to Sicily. Promoted by the European Union and backed by hundreds of millions in World Bank loans, the project is sold by politicians as an international energy bridge. Critics, conversely, see it as a pipeline designed to drain North African sunlight to power European factories while leaving Tunisia with the carbon emissions.
Both sides are peddling fiction.
ELMED will not save Tunisia, nor will it colonize it. Under the current structural parameters, the cable is a financial trap for a different reason: it exposes a bankrupt grid to a highly sophisticated, liberalized European market that Tunisia is utterly unprepared to navigate.
Imagine a scenario where the ELMED link opens in 2028. Proponents argue that Tunisia will export excess solar power during peak daylight hours to earn hard currency. But solar power in Southern Europe is already facing severe cannibalization. During peak daylight hours, solar production in Italy, Spain, and Greece spikes so dramatically that wholesale electricity prices frequently drop to zero or go negative.
Tunisia will be trying to export solar electrons precisely when Europe does not need them. Conversely, during the hot summer evenings when Tunisian demand peaks and the sun goes down, the country will be forced to import electricity from Italy at premium European peak rates.
[Peak Daylight Hours]
Tunisia Solar Surplus ---> ELMED Cable ---> Italy Grid (Market Price: ~€0/MWh)
Result: Zero revenue for Tunisia.
[Summer Evening Peak Hours]
Italy Grid (Premium European Rates) ---> ELMED Cable ---> Tunisia Grid
Result: Massive hard currency drain for STEG.
The issue with ELMED is not green colonialism. It is a complete lack of commercial strategy. Tunisia is building a multibillion-dollar straw to connect its puddle of an energy market to an ocean, without realizing that water flows both ways and pressure wins.
The Wrong Battle over Centralization
The true failure of Tunisia’s energy policy is that the government and its critics are fighting over the wrong model of centralization. The Ministry of Energy wants massive, centralized solar farms owned by foreign consortia. The unions want massive, centralized solar farms owned by a broke state utility.
Both models ignore the inherent strength of renewable energy: decentralization.
Instead of fighting over who gets to own a 200-megawatt installation in the desert, Tunisia should have spent the last decade turning every factory roof in Sfax, every tourist resort in Djerba, and every residential villa in Tunis into a mini power plant.
The government claims it cleared the path by removing pre-authorization requirements for self-production projects under 1 megawatt. In reality, the bureaucratic hurdles remain intentionally designed to protect STEG’s monopoly. A factory owner who wants to install a 500-kilowatt solar array on their warehouse roof face an obstacle course of administrative approvals, restrictive grid-tie regulations, and caps on how much excess power they can sell back to the utility.
If a business can only sell up to 30 percent of its excess electricity to STEG at a rigid, below-market tariff dictated by the buyer, the investment payback period stretches from five years to twelve. The capital strikes. The project never gets built.
By suppressing a distributed domestic market, the state forces itself into a position where only giant foreign corporations with deep pockets and international legal protections can afford to take the risk of building solar in Tunisia. The heavy-handed bureaucracy creates the very reliance on multinational capital that the critics decry.
Dismantling the Standard Inquiries
The public conversation around this crisis is dominated by superficial questions that misinterpret the structural flaws of the system.
Why cannot Tunisia just fund its own solar projects through public banks?
This question assumes the state has money. Tunisia’s sovereign credit rating is deep in junk territory. The central bank cannot print foreign currency, which is required to buy the components of a solar value chain. Every inverter, every silicon wafer, and every utility-scale tracking mechanism must be imported. Public banks are already overextended, keeping zombie state-owned enterprises afloat. Forcing domestic banks to finance capital-intensive energy infrastructure would trigger a systemic liquidity crisis. Private international financing is not an ideological preference; it is the only remaining option.
Will protecting STEG guarantee affordable electricity for Tunisian citizens?
No. Protecting STEG in its current form guarantees the exact opposite. The utility’s operational costs are tied to international fossil fuel prices. As natural gas supplies tighten and domestic production declines, the cost of generation will keep climbing. The state cannot afford to subsidize this structural deficit forever. Eventually, either the consumer tariff will skyrocket, or the grid will simply fail, forcing citizens to pay an exponentially higher price for private diesel generation and lost economic productivity.
Is green hydrogen the salvation for Tunisia's export economy?
The current roadmap aims to produce 8.3 million tons of green hydrogen by 2050, with the vast majority slated for export to Europe. This is a dangerous diversion. Green hydrogen requires immense amounts of desalinated water and highly concentrated renewable energy. Using scarce land, precious coastal areas, and billions of kilowatt-hours of potential electricity to create a volatile gas for export—while the domestic grid is still burning gas and experiencing blackouts—is a policy failure of the highest order. It prioritizes European decarbonization targets over Tunisian industrial survival.
The Hard Reallocation of Rules
Fixing this mess requires abandoning the romantic myth of the benevolent state monopoly and the short-sighted panic over foreign investment.
First, the transmission grid must be legally and operationally unbundled from STEG’s generation business. An independent, state-regulated grid operator must be established. Its single mandate should be to maintain grid stability and purchase the cheapest available electron, whether it comes from a state plant, a foreign-built wind farm, or a local rooftop.
Second, the self-production market must be entirely deregulated. Eliminate the 30 percent cap on excess power sales for domestic entities. Force the utility to implement a true net-metering system where a textile mill can offset its daytime solar production against its nighttime consumption on a one-to-one basis. If a local entrepreneur wants to build a 5-megawatt solar array and sell that power directly to a group of local supermarkets, the state should get out of the way and collect a transparent wheeling fee for using the transmission lines.
This approach will not please the union bosses, who will see their monopoly over energy production evaporate. It will not please the authors of development loans, who prefer large, easily monitored centralized projects. It will certainly not please the multinational concessionaires, who thrive on long-term, state-guaranteed monopolies.
But it is the only way to stop the blackouts. Tunisia does not need a grand ideological victory over green colonialism. It needs an energy strategy that works.
