Clean, green energy and a resilient regional power system?
A closer look at a flagship Tunisia-Italy electricity interconnection project shows that, in reality, it is reinforcing Tunisia’s debt and dependency while helping Italy polish its green credentials.
In other words, it is a classic case of greenwashing.
Tunisia is facing an escalating energy crisis. Once nearly self-sufficient, the country now produces less than half of what it consumes. Over 95 percent of Tunisia’s electricity comes from natural gas, two-thirds of which is imported from Algeria. Even electricity itself is increasingly imported.
In 2023, 11 percent of Tunisia’s electricity demand was met by imports, underscoring the country’s growing structural dependency and draining its public finances.
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Instead of rethinking this broken model, the Tunisian government has doubled down on it: borrowing from international financial institutions, privatising the energy sector and aligning with the European Union’s decarbonisation agenda.
At the centre of this approach is the Tunisia-Italy Elmed interconnection project – a 200-kilometre undersea electricity cable promoted as a milestone of Mediterranean cooperation.
Green colonialism
Elmed is officially framed as a “win-win” project – a step towards a cleaner, more resilient and interconnected regional energy system. But the reality is different.
As revealed in our new study, the project has been designed primarily around European priorities rather than Tunisia’s.
For Tunisia, this means new external debt and mounting financial pressure on Steg, which must borrow hard currency to finance its share of the project
Behind the rhetoric of partnership lies a familiar pattern of green colonialism: Europe’s decarbonisation achieved at the expense of Southern sovereignty.
The project is largely financed through European and World Bank loans and is implemented jointly by Tunisia’s public utility, Steg, and Italy’s grid operator, Terna.
In late September 2025, Steg and Terna awarded a 460 million euro ($532m) contract to the Italian manufacturer Prysmian for the construction of the 600 MW submarine cable, part of a project with a total cost estimated at 1.16 billion euros.
For Tunisia, this means new external debt and mounting financial pressure on Steg, which must borrow hard currency to finance its share of the project.
For Italian and European capital, it means guaranteed contracts, profit margins and long-term control over a strategic energy corridor. Once again, public debt in the South underwrites private profit in the North.
Deepening dependency
Rather than easing Tunisia’s energy woes, Elmed risks deepening them.
The project will increase Steg’s debt by at least 15 percent and lock Tunisia into buying electricity priced in euros, exposing it to the volatility of European markets.
According to the study, the project could cost Tunisia 220 million euros in hard currency during its first decade of operation.
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Meanwhile, the role of Steg – once the backbone of Tunisia’s energy system – is being deliberately weakened.
Its share of national electricity production is expected to fall from 88 percent in 2023 to just 36 percent by 2030, making it a mere intermediary between private producers and Tunisian consumers.
The so-called energy transition instead marks a move from public control to corporate capture, and from energy sovereignty to energy subordination.
The project was initially based on plans to export electricity from Tunisia to Italy. It is now envisaged that electricity will flow in both directions, enabling Italy to offload surplus production from its renewable power plants to Tunisia.
Proponents claim that Elmed will bring renewable energy, stability and cheaper electricity to Tunisia. Yet in practice, it risks replacing dependence on Algerian gas with dependence on European electricity.
While Europe secures access to clean energy imports, Tunisia is left with mounting debt and declining production capacity.
Most renewable energy concessions in Tunisia have gone to European companies, while local projects remain stalled. The supposed green transition is reproducing the same extractivist logic as fossil capitalism, only now painted green.
As the Working Group for Energy Democracy argues, Elmed embodies “a new chapter in the colonial story of unequal exchange”: Europe externalises the costs of its decarbonisation while outsourcing the risks, instability and debt to the South.
A sovereign alternative
Rejecting Elmed does not mean abandoning all interconnections.
Tunisia’s earlier link with Algeria, for example, was built on mutual support and grid stability, not profit or export.
But even that arrangement has become increasingly one-sided, with Tunisia now heavily dependent on Algerian imports, a warning of what happens when partnerships become imbalanced.
A just and democratic energy transition for Tunisia must begin with public ownership, regional solidarity and domestic priorities.
A just and democratic energy transition for Tunisia must begin with public ownership, regional solidarity and domestic priorities
The Working Group for Energy Democracy proposes a set of practical measures: amending the 2015 Renewable Energy Law to ensure that electricity exports are limited strictly to genuine surpluses managed exclusively by Steg; developing a national electricity generation plan based on domestic demand and sustainable local resources rather than export commitments; and strengthening Steg’s public mandate and financing capacity so it can lead renewable development rather than be sidelined by private actors.
Loans used for Elmed could also be redirected towards public investment in solar and hydropower. For example, the 390 million euros borrowed for Elmed could have financed a 600 MW photovoltaic project that would have met local needs, created jobs, and reduced dependence on fossil fuels.
Moreover, Tunisia can draw important lessons from how northern countries have defended their own energy sovereignty.
European states rejected export-driven interconnections in the name of sovereignty. Norway cancelled a planned cable to Scotland in 2023 to preserve domestic energy security and price stability. Sweden did the same in 2024, refusing a 300-kilometre link with Germany to protect national interests and control over its grid.
If these wealthy countries can reject such projects to defend their energy autonomy, why should Tunisia be pushed to accept one that undermines its own?
More than an infrastructure project, Elmed represents a political choice. It follows a model of development in which Tunisia remains peripheral, indebted and dependent, serving Europe’s green growth.
But there is another path.
Tunisia can build an energy future rooted in justice, democracy and sovereignty that prioritises people’s needs over export profits, public control over private interests and cooperation over subordination.
Ultimately, the question is not whether Tunisia should connect with Europe, but on whose terms and for whose benefit.
The views expressed in this article belong to the authors and do not necessarily reflect the editorial policy of Middle East Eye.
