Mapping South-South Cooperation in the Arab States

Arab States

PROSOL Financing Mechanism for a Self-Sustainable Solar Water Heating (SWH) Market - Tunisia

Thursday, 25 June 2015 23:36 Written by 
  • Location(s): Tunisia
  • Type(s): Solution
  • Theme(s): Climate Change, Energy, Solar Energy
  • SDG(s): 7. Affordable and Clean Energy, 13. Climate Action
  • Locations in the Arab States: Tunisia
  • Types in the Arab States: Solution
  • Themes in the Arab States: Climate Change, Energy, Solar Energy
  • SDGs in the Arab States: 7. Affordable and Clean Energy, 13. Climate Action

Development challenge and key achievements:

The Prosol Tunisia financing facility is an example of how international and local public support addressed critical demand-side barriers that were preventing the widespread deployment of commercially viable renewable energy technology in a developing country.

By focusing on public resources to directly support renewable energy investments, we can effectively shift demand away from fossil fuels, even if the latter are subsidised. The programme promoted the installation of more than 119,000 solar water heaters (SWH), totalling around 355,350 m2 of collector area over the timeframe analysed (2005 - 2010). With a fivefold increase in annual deployment, the combination of measures introduced with the Programme has been demonstrated to be effective in addressing the critical demand-side barriers that were preventing the deployment of a commercially viable renewable energy technology. The added SWH installations translate into 251 ktoe (kilotonne of Oil Equivalent) of energy saved and 715 ktCO2 (kilotonne of Carbon dioxide) avoided, as a result LPG subsidy savings of up to USD 101 million over the systems` lifetime. Public spurred USD 110.2 million in private investments, allowing households to save between USD 605 and 1,325 per SWH in energy bills. The domestic solar thermal industrial cluster grew significantly; and it is also estimated that about 3,000 jobs were created.

The programme helped make solar water heaters more affordable by reducing up-front investment requirements and prompting banks to offer concessional financing.

Solution Details: The comparative advantage of the solution:

  1. Innovative mix of capital cost and soft loans financial mechanism to overcome costs barriers, direct involvement of private financial sector, simplified procedures for final users, standardized procedures for eligibility of providers, installers and equipment as a quality guarantee and intense capacity building at all levels.
  2. TUNISIAN GOVERNMENT: Ministry for Industry and Energy and Small and Medium- Sized Enterprises, National Agency for Energy Conservation (ANME), United Nations Environment Programme Division of Technology, Industry and Economics (UNEP-DTIE), Italian- led Mediterranean Renewable Energy Programme (MEDREP), Mediterranean Renewable Energy Centre (MEDREC), STEG: State-owned utility with a monopolistic position in the local power market
  3. Prosol Residential has stimulated the development of the domestic solar thermal industrial cluster, with local actors playing a primary role. Leading with local manufacturing capacities are being developed and expanded, building potential export opportunities as well as market competition and diversification.

Lessons Learned:

Issues of awareness, technology, and credit risk mitigation, as well as competitiveness in the face of fossil-fuel subsidization.

Recent Annual Budget (USD): 3,000,000

Total Budget (USD): 3,000,000

Focal Point and Contact:
Johny Theodory
Infrastructure Unit, UNDP/PAPP
Jerusalem- OPT, 4A Yakubi St., Jerusalem, 91191, P.O. Box: 51359
Tel: +972548174148
Email: This email address is being protected from spambots. You need JavaScript enabled to view it.

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