Advancing Green Finance in Tunisia.
In July 2025, the European Union provided €20 million through EBRD to establish a blended finance facility targeting green SME financing via commercial banks in Tunisia. Historically, it has been extremely difficult for international institutions to provide local currency financing to local banks; the local interest environment is regulated and therefore local currency financing market-based pricing is unviable. The facility is based on a boundary based guarantee structure that compensates TCX for currency losses within pre-calculated ranges for each transaction. This approach optimizes leverage by precisely calibrating risk-sharing, targeting 5x leverage to support €100 million in hedging with the €20 million guarantee. Eligible transactions are selected by direct allocation and must finance licensed Tunisian commercial banks lending to SMEs for green investments including renewable energy, energy efficiency, and sustainable land management*.
TCX provided its first hedge though the facility in December 2025 to support a EUR 10 million loan from the European Bank for Reconstruction and Development (EBRD) to AMEN Bank (a private sector bank in Tunisia) to support lending to MSMEs. This facility demonstrates how single-country concentration with sectoral mandates can be combined with innovative guarantee structures to address specific market failures.
*The facility reserves capacity for two established green finance programs ahead of the general auction: EBRD’s Green Economy Financing Facility (GEFF) can access up to €40 million in loan notional, and AFD’s Sustainable Use of Natural Resources and Energy Finance (SUNREF) program up to €20 million in loan notional.