Tunisia: Good Hotel and Hospital Investment Opportunities

Figure: GIZ study

 

Tunisia is the most advanced country in terms of residential solar water heater usage across North Africa. The most important driver of the market is long-term subsidy scheme PROSOL, which supported the installation of around 700,000 m² of residential thermosiphon systems between 2005 and 2014. In 2009, the government launched two non-residential subsidy schemes – PROSOL Tertiary and PROSOL Industrial – which have offered relatively high grant levels: The tertiary scheme has paid 300 TND/m² (124 EUR/m²) or up to 55 % of the initial investment, and the industrial scheme has provided 150 TND/m² (62 EUR/m²) or up to 30 % of the costs (TND = Tunisian Dinar). So far, the schemes seemed to have had little effect on the market: There had only been 11,500 m² of collector area installed in hotels, hospitals and other tertiary buildings by the end of 2014, according to the above-mentioned study, and no project or feasibility study had been conducted under the PROSOL industry scheme by March 2015. 

 

Still, the country is said to have great potential. The GIZ study quotes the bachelor thesis by Filip Schaffitzel from the Dresden University of Technology, Germany, from October 2014, putting the solar thermal opportunities in the tertiary sector at an estimated 600,000 m², of which the Tunisian government plans to have 30,000 m² set up by 2016, 60,000 by 2020 and 300,000 m² by 2030. In the solar process heat sector, the nationwide potential is said to be about 363,000 m², of which 15,000 m² should be realised by 2016, and ultimately 150,000 m² by 2030. 

Category	Demand	Location	Collector type	Fuel	Collector area [m²]	Internal Rate of Return	SPP [years]
Hotel	DHW + circulation	Djerba	Flat plate	LPG	100	26.3 %	4.5
Pool	Indoor pool	Djerba	Flat plate	LPG	200	23.4 %	5.0
Hospital	DHW + circulation + space heating	Djerba	Flat plate	LPG	100	22.8 %	5.1
Hotel	DHW + circulation	Djerba	Vacuum tube / CPC	LPG	400	18.1 %	6.3
Hotel	DHW + circulation	Tunis	Flat plate	NG	100	9.7 %	9.9
Hospital	DHW + circulation	Tunis	Flat plate	NG	100	7.9 %	11.2
Pool	Indoor pool	Tunis	Flat plate	NG	150	7.7 %	11.3
Hospital	DHW + circulation + space heating	Tunis	Flat plate	NG	100	7.5 %	11.5

Source: GIZ study from January 2016

 

The table above shows the tertiary sector’s most profitable solar thermal reference cases, which were identified by using German simulation tool T*Sol. The authors conclude that the main factor for an economically feasible solar plant is its fuel price. Installations in Djerba – where there is no natural gas grid – turned out to be the most profitable. Hotels also show the most apt demand patterns, with increased hot water use during summer months.

 

In addition, the study’s authors emphasise that Tunisian commercial investors are looking for short payback periods of around 5 years, which can only be found in Djerba (see the table above): “The focus on the payback period as the only selling point is not enough,” they explain. “It ignores the cash flow after the system is paid off, and valuable projects may be overlooked if this period is the only thing under consideration.”

 

The economic assumptions were:

Source: GIZ study