Scatec, a leading renewable energy developer from Norway, is preparing to finance its new 120 MW Sidi Bouzid II solar project in Tunisia, with an estimated EUR 87 million in capital expenditure. The project follows the signing of a 25-year power purchase agreement (PPA) with Tunisian state utility STEG in December 2024.
Project Overview ☀️
- Location: Sidi Bouzid, Tunisia
- Capacity: 120 MW solar PV
- CapEx: EUR 87 million
- Partners: Scatec and Aeolus (a Toyota Tsusho Group company), each holding a 50% stake.
- EPC Role: Scatec will serve as EPC contractor, executing approximately 85% of the project’s capex.
- PPA Duration: 25 years with STEG
- Financial Close Target: Second half of 2025
This project builds on the success of Sidi Bouzid I and Tozeur (each 60 MW), currently under construction by the same partners.
Financial Modelling & Structuring Considerations 📊
For financial modellers and renewable investors, the Sidi Bouzid II project requires careful structuring to ensure bankability:
- Debt Structuring: Scatec is in ongoing discussions with financial institutions for debt financing, aiming for blended debt/equity models.
- CapEx Allocation: Scatec, as EPC, will manage the bulk of project expenditure, which impacts internal rate of return (IRR) and cost control.
- PPA-Based Revenue Modelling: With a 25-year term, the PPA ensures long-term cash flow visibility.
- Currency and Inflation Hedging: Tunisia’s FX exposure and inflation volatility are key financial modelling considerations.
- Carbon Credit Opportunities: A strong case for additional revenue from emissions offset programs.
Tunisia’s Energy Context & Renewable Goals 🌍
Tunisia aims to reach 30% renewable energy in its electricity mix by 2030. With 97% of electricity production currently coming from natural gas (about half of which is imported), this project is crucial for energy diversification.
The Sidi Bouzid II solar project is part of a larger governmental push, including future solar and wind auctions. These efforts will help reduce emissions, increase energy security, and drive down generation costs.
Strategic Impact & Outlook 🚀
Scatec’s integrated development and EPC model, combined with its strong partnership with Aeolus, makes it well-positioned to scale further in Tunisia. The Sidi Bouzid II project represents not only a renewable milestone but also an opportunity to deepen private-public collaborations and unlock climate finance in North Africa.
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