Financing sustainable development: the case of renewable energies in Tunisia
by Nadia Dridi
International Journal of Global Energy Issues (IJGEI), Vol. 43, No. 5/6, 2021

Abstract: Investment in renewable energy projects is facing many market barriers and experiencing innumerable obstacles, which have led us to look for new financing methods that are more innovative and more technical in order to overcome the shortcomings of traditional financial intermediation. This suggests to us the importance of financial sector development in promoting the renewable energy sector. For that matter, this paper aims to study the impact of the development of the financial sector on the development of the renewable energy sector in Tunisia. We used annual data from 1980 to 2016. In our empirical study, the variables domestic credit provided to the private sector and financial depth are measures 'proxies' of financial sector development. The VECM was applied to examine the effect of these indicators on the development of the Tunisian financial sector at the short-run, while the cointegration analysis reveals the presence of a long-run equilibrium relationship between the financial sector development and the promotion of renewable energies. The empirical results indicate that domestic credit mobilised to the private sector is the most reliable and representative indicator of the development of the Tunisian financial sector, most significantly affecting, the development of the production of renewable energies.

Online publication date: Fri, 12-Nov-2021

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