Algeria Rejects IDB Loan for Trans-Saharan Railway
Algeria has opted to fully finance the strategic Alger-Tamanrasset railway project using its own state budget, officially declining a loan proposal from the Islamic Development Bank (IDB). The Ministry of Public Works and Basic Infrastructure, through Minister Abdelkader Djellaoui, cited procedural delays with the IDB's financing offer as incompatible with the project's demanding execution schedule. This decision ensures that the realization of the railway line, connecting Laghouat, El Meniaa, In Salah, and Tamanrasset, will proceed entirely under national financial management.
Beyond the official reasoning, Algeria's renunciation of the IDB loan reflects a broader commitment to financial independence for its strategic infrastructure. This sovereign choice places the Algerian Public Treasury and the African Development Bank (AfDB) as the exclusive financial partners for the future trans-Saharan backbone. Authorities in Algiers have emphasized the importance of insulating such critical projects from any potential external influence or indirect financial participation, thereby safeguarding Algeria's decision-making autonomy and mitigating risks of political blockage or indirect conditionalities.
Despite declining the IDB's offer, Algeria continues to collaborate with multilateral institutions that align with its strategic interests. The African Development Bank (AfDB) had previously approved a substantial financing package of $878.09 million for this southern corridor. This significant funding remains active, specifically supporting the second phase of the railway program, which covers a 495-kilometer stretch linking Laghouat, Ghardaïa, and El Meniaa. The AfDB's support is particularly focused on the construction of the critical 230-kilometer section between Ghardaïa and El Meniaa, encompassing track laying, essential related infrastructure, and institutional strengthening for the Algerian transport sector. Once completed, this railway artery will significantly open up the Algerian Sahara, positioning the country as a vital logistical bridge between the Mediterranean basin and sub-Saharan African markets.
