Sonatrach, Sonelgaz, Eni Evaluate Algeria-Italy Power Link
Algeria is strategically enhancing its energy sector by transitioning electricity from a primarily domestic service to an exportable commodity, with the Ministry of Energy and Renewable Energies setting integration into the European electricity market as a key national policy objective. This proactive approach aims to expand Algeria's international energy role. The nation possesses a robust electricity production base, with an estimated installed capacity of 26.1 gigawatts, ensuring 99% electricity coverage for over 12.2 million customers. This substantial capacity underpins Algeria's ambitions for external energy exchanges.
The strategic pivot towards the European market is designed to strengthen Algeria's position in African and European energy exchanges, while concurrently securing long-term national energy needs. This vision is part of broader tasks for the sector following a government adjustment, which includes developing the energy mix, increasing the contribution of renewable sources, and enhancing energy efficiency. A concrete step towards this objective occurred on July 31, 2024, when Sonatrach, Sonelgaz, and Italy’s Eni signed a memorandum of understanding to evaluate the feasibility of a submarine electricity link between Algeria and Italy, aiming to supply both the Italian and wider European markets.
Parallel to its external focus, Algeria is reinforcing its domestic energy framework through several key initiatives. The Ministry is re-evaluating the national consumption and pricing model for electricity and gas, a measure critical for financing network maintenance and managing energy costs for households and businesses. Furthermore, the new policy actively promotes the integration of national industry by directing operators to increase local content in equipment production and service provision for the electricity and gas sectors. This is complemented by efforts to improve productivity, digitalize management, and foster skilled competencies, thereby channeling a larger share of investment demand toward Algerian enterprises. The Ministry also underscores the importance of financial resource management and operational cooperation among sector units, leveraging objective-based contracts and financial planning to modernize management and ensure efficient resource utilization.
