African Green Energy Market Sees Algerian Growth
Algeria is projected to achieve one of Africa's fastest growth rates in the renewable energy market, with specialized forecasts indicating a substantial increase in market volume. The market is expected to grow from 1.53 gigawatts in 2025 to 2.23 gigawatts in 2026, before surging to 14.59 gigawatts by 2031. This trajectory represents a Compound Annual Growth Rate (CAGR) of 45.60 percent between 2026 and 2031. This anticipated leap is supported by several factors, including Algeria's extensive solar potential, an accelerated program for renewable energy development, the state's drive to diversify its energy mix, and the opening of new investment opportunities in clean electricity production.
This expansion aligns with Algeria's efforts to enhance its photovoltaic solar energy capabilities, particularly in its southern and high plateau regions, to harness abundant natural resources and reduce future reliance on traditional energy sources for electricity generation. The country has observed positive developments in the production of solar energy and green hydrogen, with production facilities for green hydrogen already operating in Oran, Arzew. Algeria is actively engaged in global hydrogen export, aiming to meet Europe's future energy demands by supplying green hydrogen over distances up to 3000 kilometers, a strategic move supported by Sonatrach's ongoing global production and investment in research and development.
The new Investment Law No. 22-18 is designed to enhance Algeria's appeal for renewable energy projects. Since its implementation, new and renewable energy initiatives have been designated as priority investments eligible for various incentives. This legal framework also streamlines investment procedures and strengthens mechanisms for investor support, signaling a positive environment for those looking to enter the renewable energy market. While the law provides a conducive investment climate, experts note that the sector's growth also hinges on the scale of government projects, availability of financing, technology costs, development of electricity transmission networks, and the efficiency of project execution and operationalization. Ultimately, Algeria's strategy is founded on the convergence of significant solar resources, a national program for renewable energy expansion, and a stimulating investment framework.
