Salem Maiar
Political fragmentation is the most structurally significant obstacle
Keeping the lights on in Libya has been a persistent problem for decades. Renewable energy is now emerging as a critical and strategic tool for energy security. For decades, oil and gas generated roughly 95 percent of Libya’s state revenues and supplied the majority of its electricity. That model funded the state – but it also left the country dangerously exposed.
Persistent power shortages, ageing infrastructure and political fragmentation since 2011 have made the costs of hydrocarbon overdependence impossible to ignore. Renewable energy is now emerging as a critical and strategic tool for energy security, economic resilience and institutional rebuilding.
A growing portfolio of memoranda of understanding (MoU), cooperation agreements and early-stage contracts – many advanced through the Libya Energy & Economic Summit (LEES) in late January – signals that this shift is moving beyond rhetoric. Not all agreements are fully bankable, but they are helping translate policy intent into defined project pipelines and attracting serious international developers.
Policy framework and strategic direction
Libya’s National Strategy for Renewable Energies and Energy Efficiency sets out the roadmap. The initiative targets approximately 4GW of renewable capacity by 2035, primarily from solar photovoltaic (PV), supported by wind power, concentrated solar power, and hybrid systems. Interim milestones include 1.7GW of renewables by 2026, with solar PV reaching around 3.3GW and wind generation around 600MW by 2035.
Recent agreements address these
constraints directly.
A 100MW solar power agreement between the Renewable Energy Authority of Libya (REAoL) and New York-based W16 Energy, announced at LEES, moves beyond feasibility discussions towards tangible development. Final investment decisions and financing structures remain pending, but the project reflects growing external confidence in Libya’s regulatory direction.
A strategically significant MoU links the ministry of oil and gas with REAoL to integrate solar and wind systems into oil production and processing facilities. By reducing fuel consumption, lowering emissions, and improving operational reliability at existing energy sites, this initiative aligns decarbonisation with economic pragmatism. Leveraging existing infrastructure also lowers development risk and compresses deployment timelines.
International cooperation is broadening the scope. A framework agreement with Serbia focuses on renewable collaboration and technical exchange, while a cooperation initiative between the UNDP and the Libyan Iron and Steel Company targets decarbonisation and energy efficiency in heavy industry – connecting clean energy deployment with industrial diversification.
Large-scale investment pipeline
TotalEnergies’ 500MW Al-Sadada solar project remains the most advanced utility-scale renewable development in the country and is expected to come online this year. With a multi-hundred-million-dollar capital commitment, it sets a benchmark for foreign participation.
Additional interest from PowerChina, EDF Renewables, AG Energy, and Alpha Dhabi Holding has focused on solar portfolios ranging from 1.5GW to 2GW across multiple regions. Most proposals remain at pre-contract stage, but their cumulative scale signals strong appetite for Libya’s solar potential, particularly if regulatory clarity and grid capacity improve.
Wind energy, while smaller in scale, is gaining traction along the Mediterranean coast. A typical 100MW wind project requires capital investment of around $146 million and offers output profiles that complement solar PV, reducing grid vulnerability to single-source intermittency.
Investment implications and challenges
Political fragmentation is the most structurally significant obstacle. The split between Tripoli-based institutions and eastern authorities directly complicates grid integration, contract enforcement and regulatory coherence.
A renewable energy agreement signed with one authority may carry limited legal force or operational reach in territory governed by another. Investors face the practical challenge of identifying which counterparties hold authority over project sites, grid connections and revenue flows.
Recent reforms – including tax incentives, foreign ownership provisions and evolving public-private partnership frameworks – are designed to convert preliminary agreements into bankable assets. Whether they succeed will depend less on the reforms themselves than on the stability of the institutions tasked with enforcing them.
Should favourable conditions advance alongside solar deployment, renewables can reduce domestic fuel consumption and strengthen energy security. In a country rebuilding its infrastructure and its institutions at the same time, clean energy is a state-building strategy.
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Salem Maiar is a consultant in Libyan natural resources, finances and geopolitics
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