Algeria’s energy push, identity shifts, and infrastructure moves

Energy and pipelines dominate Algeria’s economic agenda

Algeria’s role as a gas supplier to Europe gained visibility this week. The Trans-Saharan Gas Pipeline (TSGP) project resurfaced with updated figures. The pipeline would span 4,128 km from Nigeria through Niger to Algeria, with a planned capacity of 30 billion cubic meters (bcm) per year. Algeria’s state-owned Sonatrach holds a 51% stake in the project. Total estimated cost: $13 billion. Construction has not started. Delays stem from security concerns in the Sahel and financing uncertainties.

Algeria currently exports 54 bcm of gas annually, 85% to Europe. Italy and Spain are the largest buyers. In 2023, Algeria’s gas exports to Europe rose by 11% year-on-year, according to Sonatrach data. The TSGP would add 30 bcm to Algeria’s export capacity, nearly doubling current volumes. For entrepreneurs, this means potential contracts in pipeline construction, maintenance, and gas processing. Local firms could also supply steel, valves, and engineering services. Sonatrach has not released a timeline for tenders.

Separately, Algeria’s liquefied natural gas (LNG) credibility was questioned in a report by African Press Agency (APA). Algeria’s LNG exports fell by 18% in the first half of 2024 compared to 2023. The decline is attributed to maintenance at the Skikda and Arzew LNG plants. Skikda’s Train 1, with a capacity of 3.2 million tonnes per year (mtpa), has been offline since March 2024. Arzew’s Train 4, with 4.5 mtpa capacity, is scheduled for maintenance in Q4 2024. Sonatrach has not confirmed when operations will resume.

Algeria also announced three new oil and gas discoveries in the Berkine and Illizi basins. The finds include 120 million barrels of oil equivalent (boe) in the Rhourde El Krouf field and 80 million boe in the Hassi Messaoud South block. These discoveries will not enter production before 2026. Sonatrach plans to invest $40 billion in upstream exploration between 2024 and 2028, with 60% allocated to gas projects.

Identity debates and diaspora engagement

Identity politics in Algeria intensified this week. Rachid Raha, president of the World Amazigh Congress, proposed replacing the Arab Maghreb Union (UMA) with a “Union of Tamazgha,” a pan-Berber political and economic bloc. The UMA, founded in 1989, includes Algeria, Morocco, Tunisia, Libya, and Mauritania. It has been inactive since 2010. Raha’s proposal targets Amazigh (Berber) communities across North Africa, which number an estimated 25 million. In Algeria, Amazighs represent 25-30% of the population, according to the 2008 census.

The proposal follows a government decision in June 2024 to make Tamazight (Berber language) an official language in Algeria’s constitution. The move was seen as a response to protests in Kabylie, where identity demands have grown since 2021. Entrepreneurs in the diaspora, particularly in France and Canada, have launched startups targeting Amazigh cultural products. Examples include online platforms for Tamazight language courses and e-commerce sites selling Amazigh jewelry and textiles. Revenue figures for these businesses are not publicly available.

Islamist groups in Algeria have also engaged in identity debates. Saber Blidi, a researcher at the Arab Weekly, reported that Islamist parties are using Amazigh cultural revival to mobilize support. The Movement of Society for Peace (MSP), Algeria’s largest Islamist party, has called for “Islamic unity” in response to Amazigh demands. The MSP holds 65 seats in Algeria’s 407-seat National People’s Assembly. Its economic platform includes support for halal certification and Islamic finance. Algeria’s first Islamic bank, Al Baraka Bank Algeria, launched in 2022 with a capital of $100 million.

Infrastructure and urban mobility updates

Algeria’s infrastructure sector saw two developments this week. The government issued instructions to rehabilitate roads and infrastructure damaged by wildfires in August 2024. The fires affected 12 wilayas (provinces), destroying 120 km of roads and 50 bridges. The Ministry of Public Works allocated $150 million for repairs. Local construction firms, including Cosider and Eurl BTPH, have been awarded contracts. The rehabilitation is expected to take 12 months.

Separately, Algeria’s KC2026 transportation plan underwent its fourth test during the Algeria-Austria football match on September 10. The plan, part of Algeria’s bid to host the 2026 African Cup of Nations, includes upgrades to Algiers’ tramway network. The current tramway, operated by Entreprise Métro d’Alger (EMA), spans 23.2 km with 28 stations. Daily ridership averages 150,000 passengers. The KC2026 plan proposes extending the network to 45 km by 2026. EMA has not released a budget for the expansion.

Algeria’s tramway sector has attracted foreign investment. In 2023, Algeria signed a $400 million contract with France’s Alstom to supply 150 new tramcars. The first batch of 50 cars arrived in June 2024. The remaining deliveries are scheduled for 2025. For entrepreneurs, this presents opportunities in maintenance, spare parts, and digital ticketing systems. Local firms could also supply construction materials for station upgrades.

Diaspora and economic ties with Canada

Algeria’s oil and gas discoveries were announced in a press release by the Algerian Business Council (ABC) in Canada. The ABC, founded in 2018, has 120 members, including Algerian-Canadian entrepreneurs and executives. The group has lobbied for increased trade between Algeria and Canada. Bilateral trade reached $1.2 billion in 2023, up from $800 million in 2020. Canada’s exports to Algeria include machinery ($300 million) and pharmaceuticals ($150 million). Algeria’s exports to Canada are dominated by crude oil ($700 million).

The ABC has also promoted Algeria’s startup ecosystem to Canadian investors. In 2023, Algerian startups raised $45 million in funding, a 30% increase from 2022. The largest deal was a $12 million Series A round for Yassir, a ride-hailing and delivery app. Yassir operates in Algeria, Morocco, and Tunisia, with 5 million users. The company plans to expand to West Africa in 2025.

Cultural initiatives and youth empowerment

Algeria’s government highlighted its youth empowerment programs this week. The Ministry of Youth and Sports presented Algeria’s experience in human capital building at a United Nations forum. The presentation cited the “One Million Entrepreneurs” program, launched in 2020. The program provides training and microloans of up to $10,000 to young entrepreneurs. As of June 2024, 250,000 applications have been approved, with 60% allocated to women-led businesses. The default rate on loans is 8%, according to ministry data.

The government also announced measures to support wildfire victims. President Abdelmadjid Tebboune allocated $200 million in aid to affected families. The funds will cover housing reconstruction and agricultural losses. The fires destroyed 12,000 hectares of farmland, including olive and fruit orchards. The Ministry of Agriculture has pledged to distribute 500,000 olive saplings to farmers in 2025.

Week’s highlights

– Energy: Algeria’s gas export capacity could increase by 30 bcm if the Trans-Saharan Gas Pipeline is built. LNG exports fell by 18% in H1 2024 due to plant maintenance. Three new oil and gas discoveries were announced, with production expected by 2026.
– Identity: Amazigh activists proposed a pan-Berber economic bloc. Islamist parties are using identity debates to mobilize support. Diaspora entrepreneurs are launching cultural startups.
– Infrastructure: $150 million allocated for wildfire-damaged roads. Algeria’s tramway network may expand to 45 km by 2026. Alstom will supply 150 new tramcars by 2025.
– Diaspora: Bilateral trade with Canada reached $1.2 billion in 2023. Algerian startups raised $45 million in 2023, led by Yassir’s $12 million Series A.
– Youth: “One Million Entrepreneurs” program approved 250,000 microloans. Default rate stands at 8%. $200 million allocated to wildfire victims.

Key takeaway for entrepreneurs
Algeria’s gas pipeline projects and infrastructure upgrades create demand for engineering, construction, and maintenance services. Diaspora entrepreneurs can leverage identity-driven markets for cultural products. Startups in fintech and mobility are attracting foreign investment, with Yassir’s expansion plans signaling growth potential in North and West Africa.