4.64 Billion Dollar Investment Planned for Algerian Power Sector
Algeria's electricity sector is set to implement five key projects and operations during 2027, backed by a significant investment of 624 billion Algerian Dinars, equivalent to 4.64 billion US dollars, from the Sonelgaz group. This strategic initiative aims to enhance the national electricity system's capabilities, meet growing consumption demands, and bolster energy supply for residential areas and economic activities. Minister of Energy and Renewable Energies, Mourad Adjal, presented these plans, along with the sector's budget and proposed financial measures, to the Finance and Budget Committee of the People's National Assembly. The plans follow a record peak in electricity demand of 21,828 megawatts in summer 2026, against a national production capacity of 28,024 megawatts.
The planned projects for 2027 include the completion and operationalization of remaining solar power plants, adding an aggregate capacity of 2,440 megawatts. This forms part of the first phase of the national renewable energy program, which targets 3,200 megawatts across 21 stations in 14 provinces, building on the 760 megawatts already operational. These solar initiatives are expected to boost renewable electricity production and optimize the use of natural gas in conventional generation. Additionally, parts of new conventional power generation plants in Djelfa, Oumache 3, and Mostaganem are slated to become operational, contributing an additional 1,378 megawatts to the national grid.
Further expansion plans involve commencing construction on new electricity generation plants in the Tebessa and Adrar provinces, alongside the development of a 136-megawatt power plant in Tamanrasset to support energy provisions in southern Algeria. Infrastructure enhancements also include the completion of a project to upgrade an eastern electricity transmission line, extending 130 kilometers, from 90 to 220 kilovolts. These efforts underscore a comprehensive approach to modernizing the electricity infrastructure, expanding connections to southern regions, and improving overall network efficiency.
Supporting these initiatives, the Ministry of Energy and Renewable Energies has proposed a total budget of 123.4 billion Algerian Dinars, approximately 917 million US dollars, for the sector in 2027. This funding is designated for electricity and gas connection programs, renewable energy development, energy consumption control, and administrative support for new provinces. The proposed 2027 finance law also includes measures to support energy activities and encourage investment in clean energy sources. These include extending value-added tax exemptions for certain electricity production, transmission, distribution, and marketing activities, as well as pipeline gas transport. Tax deductions for green hydrogen and renewable energy infrastructure expenses are set to increase to 10%, also covering reforestation efforts, aiming to foster productive investment, local manufacturing, and reduce reliance on imports.
