Algeria seeks foreign investment for solar energy plan
Tunis - Algeria has announced efforts to launch an ambitious solar-energy programme that would make it one of the top energy providers for Europe.
State-owned Gas and Electricity Engineering Company (GEEC) has informed investors in Algiers and the United States of plans to build a series of solar plants. They are projected to produce 4,050 megawatts of energy, enough to provide power for an estimated 60 million people.
Algeria said it would depend on partial foreign investment to finance the project, which it hopes can reverse years of economic setbacks caused by declining oil revenues.
“The Algerian government does not have the financial capacity on its own to finance such a project, which will cost around $4 billion,” said the International Finance Corporation (IFC), the private sector arm of the World Bank.
Algeria’s investment law limits foreign investment in such ventures to 49%.
“There are several financing models for such investments that Algeria can choose from,” the IFC said, “but the most important step is for them to change the 51-49% rule in the investment law.”
The chief of the GEEC’s production department, Ouidad Hamrour, said “a government decree on the new conditions and procedures necessary to anchor the legal framework for such investment has been finalised and is in the process of being published”.
Mohamed Arkab, chief executive officer of GEEC, said the initial 4,050-megawatt project is part of an effort to produce 22,000 megawatts in energy by 2040.
“The 4,050 MW [megawatts] scheme will be split into three ventures of 1,350 MW each with each unit standing alongside plants to produce solar energy equipment and components,” Arkab said in a statement.
While Algeria had previously announced initiatives to harness solar power, it has failed to make tangible progress with them. However, after shrinking oil revenues led the country to impose austerity measures in its 2017 budget, the country appears more committed to taking on the solar project.
On March 18th, Algerian energy giant Sonatrach took one of the first steps by laying the groundwork for a 10-megawatt plant in the Berkine basin. The plant, which will generate power for the Bir Rebaa Nord oil field, is part of the state’s overall energy project.
“Sonatrach’s initiative is part of the national plan to develop renewable energy sources,” said Amine Mazouzi, the company’s chief executive officer. “The series of solar plants to be built by Sonatrach will provide power to oil and gas fields and spare gas for exports.”
To export electricity to Europe, Algeria is planning to use electricity grids from neighbouring Morocco and Tunisia.
The country is considering constructing underwater grids to connect power to Europe but Algeria would only take on such an investment after securing the European bloc as a dependable client of oil, gas and electricity, experts said.
Algeria’s geographical position gives it enormous potential in the world of solar energy. It receives the equivalent of 2,500 kilowatts of energy per square metre annually from sunlight exposure.