en.Wedoany.com Reported - The Multilateral Investment Guarantee Agency (MIGA) has provided a guarantee of up to €13.05 million (approximately $14.86 million) for a 100-megawatt solar power project in the Sidi Bouzid region of Tunisia. This 20-year guarantee supports the investment of French joint venture Aeolus SAS (with participation from a Toyota Tsusho subsidiary) in the project company Scatec Khobna PV Power SARL, which will build, own, and operate the photovoltaic facility in Mezzouna. The project will sell electricity to the state-owned power company STEG under a 25-year power purchase agreement and includes approximately 12 kilometers of high-voltage transmission lines. Financing comes from the European Bank for Reconstruction and Development (EBRD) and the European Investment Bank (EIB), with additional support and grants from the European Union through the European Fund for Sustainable Development Plus (EFSD+), and reinsurance from Nippon Export and Investment Insurance. MIGA stated that this is its fourth guaranteed independent solar power project in Tunisia, having previously supported Aeolus's Sidi Bouzid I and Tozeur projects.
How will MIGA's €13.05 million guarantee accelerate Tunisia's 100 MW Sidi Bouzid solar project?
By providing long-term (20-year) coverage against country and political risks, reducing the investment risk for private enterprises in the 100 MW facility, making lenders more willing to fund construction and operation.
By lowering the perceived risk of delays or losses due to adverse government or regulatory outcomes, helping unlock broader project financing—especially important for large-scale solar plants with long payback periods.
By improving the risk profile regarding contract enforceability and payment continuity, enhancing the bankability of the power purchase agreement framework with Tunisia's state-owned power company (STEG).
By supporting the creditworthiness of the special purpose project company, encouraging experienced developers and investors to commit equity and debt, strengthening confidence in the build-own-operate model.
By mitigating risks that could lead to cost overruns or funding gaps during commissioning, making financing for grid-related components, including approximately 12 kilometers of high-voltage transmission lines, easier.
By indirectly accelerating the project timeline through faster financial closure—guarantees can reduce time spent on repricing risks, renegotiating terms, or seeking additional collateral measures.
By complementing other lenders and EU instruments (EBRD, EIB, EFSD+) and reinforcing reinsurance (including coverage from Nippon Export and Investment Insurance), improving the overall financing package and creating a more diversified risk-sharing structure.
By lowering the financing premium typically demanded by investors when political risks are high, enabling larger or more efficient capital mobilization, potentially reducing the capital cost of solar construction.
By building on previous guarantee programs in Tunisia's renewable energy sector, maintaining continuity with MIGA's prior experience in the field, which can reduce uncertainty for new stakeholders assessing the market.
By supporting Tunisia's renewable energy expansion through helping connect an additional 100 MW of assets to the grid—contributing to faster capacity additions compared to projects lacking adequate risk coverage.
