Green colonialism under the guise of energy privatisation in Tunisia

The energy sector in Tunisia is still largely under the control of the national electricity company, STEG, which controls 91.7 per cent of installed electricity generation capacity and produces about 84 per cent of the country’s electricity.3, 4 STEG was created in 1962 to harmonise Tunisia’s electricity and gas sectors. Before its creation, the sector was fragmented and dominated by seven different companies. With nationalisation, the government wanted to entrust the production, transmission and distribution of electricity and gas to a single public body to increase efficiency, coordination and energy access. In 2016, STEG achieved an electrification rate of 99.8 per cent.

However, despite this considerable progress, the country's energy sector is largely dependent on natural gas and other fossil fuels for power generation. In 2021, 97 per cent of the country's energy was produced from fossil fuels and only 3 per cent from renewable sources such as solar, wind and hydro.5 Tunisia is very dependent on other countries and their natural resources. In 2021, it imported 45 per cent of the natural gas used for energy production from Algeria.

In order to move towards renewable energy, the government’s 2015 ‘Solar Plan’ committed to increasing the share of renewable energy sources to 30 per cent by 2030 – a target raised to 35 per cent in June 2022.6  The government hopes to reduce its energy deficit as, since 2010, energy consumption has grown by 1.4 per cent per year faster than energy capacity. But instead of making a transition to renewable energy, Tunisia has seen an expansion of energy demand that lacks sound social and environmental objectives.7

To initiate a transition to renewable energy, the Tunisian government begun to turn to the private sector in 2013. STEG has operated two photovoltaic and wind power plants since 2000, alongside hydro power plants inherited from the French colonial period and (others) installed by the Tunisian state after independence. However, the government argued that the public company did not have sufficient financial means to promote the transition, positioning the involvement of the private sector as a logical consequence.

The 2013 Law on the production of electricity from renewable energy sources by the private sector was heavily influenced by lobbying by foreign organisations and international financial institutions.8 A core player was the German Development Agency GIZ, which has become a major decision-maker in Tunisian energy transition policy. GIZ’s various activities are centred around conducting research and preparing recommendations for the development of legislation with the goal of enhancing the development of privatised renewable energy, under the pretence of supporting the country’s green energy transition.9 However, as the Tunisian Observatory of the Economy highlights, GIZ’s involvement will primarily benefit the Global North. Firstly, a politically stable Tunisia is a core European objective to reduce the flow of migration to Europe.10 In addition, several private renewable energy generation products focus on the export of energy through underwater cables, rather than producing energy for local use.11 This benefits governments in Europe, who can continue to extract natural resources, including solar energy, from Tunisia and its neighbours. Ultimately, the development of private renewable energy that international institutions and actors such as GIZ have promoted does not serve to enhance energy sovereignty in Tunisia but, rather, reinforce green energy colonialism.

The government’s 2013 plans for fostering renewable energy development through privatisation were met with heavy opposition from the Tunisian General Labour Union (UGTT).12 UGTT requested at the National Constituent Assembly (NCA) that the legislation should be blocked, due to a lack of consultation with social partners, including unions, in the drafting process. The NCA followed the union’s recommendation, creating a space for the Energy Commission and the UGTT to meet and discuss the union’s arguments against privatisation. Following the presentation of UGTT’s arguments, the project was shelved, and STEG remained the main body for energy development – for a little while longer.

In 2015, however, two new pieces of legislation (the 2015 Solar Plan and Law 12-2015) were introduced to promote private sector involvement in the energy sector. This time, these laws were successful. The Solar Plan seeks to mobilise around €8 billion of investment between 2015 and 2030, two-thirds of which the government hopes to procure from private sources, predominantly foreign investment.13 While promoting a neoliberal, undemocratic and private ownership structure for renewable energy, this plan reinforces and recreates dependencies on foreign investment and technology, diminishing the role of Tunisian civil society and local businesses in the country's energy transition. This import-based strategy relies on drawing in knowledge in the form of technologies, equipment and patents from Northern countries to facilitate the transition to renewable energy. This accentuates the country's dependence by increasing external debt and reinforcing the North–South extractive power dynamic. Thus, the plan facilitates an economic model driven by foreign investment, which leads to higher costs as loans, interest charges and private profits are eventually paid for by public money and the Tunisian population.

In addition, Law 12-2015 allows the use of agricultural land for renewable energy projects, an infringement of the Tunisian people’s land rights and food security.14 Tunisia already suffers from severe dependence on imported food, which the privatisation and reallocation of agricultural land only exacerbates.

The 2015 laws also reduced public subsidies for STEG. The updated subsidy policy decoupled STEG's operations from the government budget, making the state-owned company solely financially responsible for the purchase of gas. This decision led to the financial ruin of the company, as STEG relied on state subsidies to cover the difference between the cost of energy production and distribution and the electricity prices set by the state.15 This disastrous policy remained in place for five years, until massive mobilisations by the country's trade unions forced the government to reimburse STEG for losses incurred in 2018. The 2015 laws are a continuation of neoliberal reforms: they open the energy sector to the private market by encouraging independent power producers (IPPs) to produce energy from renewable sources.16,17 That said, STEG remains a public company with a monopoly on energy transmission and distribution systems. Despite the strong impetus from the government, the public company continues to resist private investment in the energy sector.

The government endeavoured to continue its privatisation programme by publishing a model power purchase agreement in early 2017 and announcing the first renewable energy IPPs in the second half of this year. A total of 29 solar projects (24 10MW solar projects, two 50MW solar projects, two 100MW solar projects and one 200MW project) and four wind projects (30MW) have been awarded to private companies. Of the projects launched between 2017 and 2019, half include joint ventures with foreign and Tunisian companies, while only four are exclusively led by Tunisian companies. Five projects are owned by French companies and three by German companies, reinforcing colonial power structures and excluding local companies and expertise.

In addition to increasing dependency, the reforms of the Tunisian energy sector do not provide the state with the necessary tools to remedy the negative effects of privatisation and to ensure the protection of citizens' interests.18 These reforms give the government limited control and oversight mechanisms to prevent ‘green grabbing’. Meanwhile, local communities and civil society are given little information on public-private partnership proposals and are excluded from policy discussions. What’s more, there are no provisions for the right to compensation for communities affected by private energy projects. At a minimum, comprehensive public reforms are needed to address these problems and strengthen public control over IPPs and private energy initiatives. However, as we shall see, state-owned and democratically controlled renewable energy would be better able to ensure a just energy transition.