Saïd Mazigh, General Manager, Carthage Power Company (CPC): Ineterview

Ineterview: Saïd Mazigh

Why is it important to further privatise the electricity market in Tunisia?

SAID MAZIGH: The government has already decided to modestly privatise the electricity market through its public-private partnership with CPC, but it must now decide how this market will develop going forward. Public investment will not be sufficient to meet either the country’s current energy needs or its growing future energy demand. Private investment complements public investment and plays a vital role in the development of the electricity market. However, it is up to the government to create the momentum necessary to further privatise the energy sector.

Currently, the private sector generates less than 20% of Tunisia’s electricity, but the country should aim to place up to 40% of power production in private hands. Attracting additional independent power producers (IPPs) is vital to the improvement of Tunisia’s power sector. IPPs bring with them international standards, and new technology that can improve the output and efficiency of the power sector.

Moreover, IPPs allow private companies to assume the technical, financial and commercial risks of a project, which would otherwise fall under the responsibility of the government.

What are the main obstacles that restrain the private sector in the electricity market?

MAZIGH: One of the main obstacles is the various government changes since the revolution and the lack of a clear political position regarding privatisation. Increasing the role of the private sector in the electricity market depends on the clear and favourable political will of government officials. The new government led by Prime Minister Youssef Chahed has clearly conveyed its understanding of this reality, and the Tunisia 2020 Conference clearly declared the country’s investment and development strategy.Another obstacle relates to union actions against privatisation and to a social climate that must be made more favourable to investors.

Which energy-related infrastructure projects should the government prioritise?

MAZIGH: The government should prioritise the creation of three or four new combined-cycle power plants, which the private sector should spearhead. Though the 2016-20 Development Plan identifies some power-related projects, it is not sufficiently clear or ambitious. It was the product of the kind of consensus that has guided Tunisia until now, but that mindset limited the ambition of this five-year plan. Moreover, the government should establish an agency under the authority of the Ministry of Energy, Mining and Renewable Energies (Ministère de l’Energie, des Mines et des Energies Renouvelables, MEMER) and/ or prime minister that would approve public-private partnerships and their implementation.

Are renewable energy sources profitable?

MAZIGH: Renewable energy in Tunisia is becoming increasingly competitive as technology improves and financing costs diminish, but it still needs support. The government should help companies seeking to develop renewable energy by offering fiscal and other incentives, especially at the outset.

When thinking about the country’s mid- and long-term development, Tunisia must prioritise the renewable energy despite any opposing voices. Strategy is now set by the government and the MEMER, which aim to have renewable energy constitute 30% of Tunisian capacity by 2030. However, achieving this objective will depend on establishing feasible milestones that give private investors periodic positive feedback. The MEMER should provide a feed-in tariff to renewable energy producers that sufficiently stimulates investment in renewable energy production as well as a clear legal framework.