Algeria’s week: energy, water, tourism and IMF warnings

Energy and water security dominate Algeria’s economic agenda

In parallel, Sonatrach reported three new oil and gas discoveries in the Berkine and Illizi basins. Combined reserves estimate 1.2 trillion cubic feet of gas and 50 million barrels of condensate. These finds follow Algeria’s 2023 pledge to increase gas exports to Europe by 30% by 2027, though LNG delivery delays in 2024 have raised credibility concerns. The Trans-Saharan Gas Pipeline (TSGP), a 4,128 km project linking Nigeria to Algeria via Niger, remains on track for a 2028 completion. The pipeline’s 30 billion cubic meters annual capacity could supply 10% of Europe’s gas demand, but financing—estimated at $13 billion—depends on final agreements with Nigeria and Niger.

Tourism and infrastructure: state-driven expansion

Transport infrastructure is expanding. The KC2026 tramway project in Constantine, funded by a €250 million Algerian-Korean loan, conducted its fourth test run in June. The 18.5 km line, operational by 2026, will serve 150,000 daily passengers. Separately, the government announced road rehabilitation plans following 2023 wildfires, with $400 million allocated for 1,200 km of damaged infrastructure. Work begins in September 2024.

IMF warnings and economic diversification

Diversification efforts focus on pharmaceuticals and renewable energy. Algeria’s 2024–2030 solar plan targets 15 GW of installed capacity by 2030, with $12 billion in private-sector investments. However, bureaucratic delays have stalled 60% of approved projects. The IMF also flagged Algeria’s GDP calculation methodology, which includes unsold oil stocks as economic output, inflating growth figures without improving living conditions.

Security and regional dynamics

Regionally, Algeria is positioning itself as a mediator in the Sahel. The country hosted a June summit with Mali, Burkina Faso, and Niger (the AES bloc), proposing a $500 million economic cooperation fund. Algeria’s push contrasts with Morocco’s influence, particularly in West Africa, where Rabat has secured 10 gas and phosphate deals since 2022. Algeria’s strategy focuses on energy (gas exports to Niger) and military training (2,000 Sahelian officers trained since 2020).

Diaspora and cultural initiatives

Culturally, Algeria is leveraging youth programs to attract investment. The Ministry of Youth and Sports launched a $100 million fund in June to train 50,000 entrepreneurs by 2026. The program targets digital skills, with 60% of participants under 35. Separately, Algeria’s U17 football team’s 2-0 victory over Somalia in the AFCON qualifiers has drawn attention to the country’s sports infrastructure, including the $300 million Baraki Olympic Stadium (capacity: 40,000), completed in 2023.

Week’s highlights

Key takeaway for entrepreneurs
Algeria’s desalination and gas projects offer supply-chain opportunities for engineering and construction firms, with tenders opening in 2025. Tourism and renewable energy remain state-prioritized sectors, but bureaucratic delays require local partnerships. The IMF’s warnings underscore the need for non-hydrocarbon revenue streams; diaspora entrepreneurs benefit from tax incentives in agriculture and tech. Security risks in the south and east necessitate risk assessments for FDI.