Algeria’s new 3 GW solar tenders signal a significant shift in its energy landscape, aiming to expand solar beyond remote areas and cultivate a local renewable energy industry. The initiative leverages the country’s high solar potential, underscoring its commitment to reducing its reliance on gas while building domestic capacity.
3 GW Tender to Transform Algeria’s Energy Sector
Traditionally dependent on gas, Algeria is now making a decisive move into solar energy with two large-scale tenders totaling 3 GW. This initiative marks a turning point for a country where solar energy was previously confined to remote Sahara villages and research projects.
Algeria boasts immense solar potential, receiving around 3,000 hours of sunshine annually. While northern regions average nearly 1,700 kWh/m² per year, the southern areas reach as high as 2,263 kWh/m².
Despite this potential, the country had only 437 MW of installed solar capacity by the end of 2023, with most of its electricity still generated from domestic gas. In 2023, only 1.5 MW of new solar capacity was grid-connected, as the remaining installations powered public lighting and remote areas. As a result, solar’s role in the national energy mix has remained marginal—but the government’s 3 GW tenders are set to shift this balance.
President Tebboune’s Vision Drives New Solar Tenders
President Abdelmadjid Tebboune aims to diversify Algeria’s energy sources and reduce its dependence on gas exports. This goal is particularly pressing, as hydrocarbons accounted for 19% of the nation’s GDP between 2018 and 2022. According to Mourad Issiakhem, director of energy efficiency at CEREFE, these new solar tenders are a cornerstone of Algeria’s renewable energy projects, with the potential to add 4 GW of capacity by early 2025.
Launched by Sonelgaz, Algeria’s national electricity and gas company, the tenders awarded contracts for engineering, procurement, and construction (EPC) services to ensure projects are managed locally.
While EPC contracts can be more expensive than independent power producer (IPP) models, this approach offers greater control over project execution.
The tenders attracted major international players. One 1 GW portion alone resulted in five contracts for companies including Algeria’s Amimer Energie, Turkey’s Ozgun, and China State Construction Engineering Corp. (CSCEC), which will develop large-scale solar projects across the country.
Although a second 2 GW tender segment was undersubscribed, it still resulted in major awards to firms like China International Water & Electric Corp. and PowerChina. In total, this wave of projects represents a €1.8 billion ($1.96 billion) investment, with energy prices proposed by bidders ranging from €0.54/W to €0.81/W.
Algeria’s Long-Term Renewable Energy Goals
Algeria’s renewable energy program, launched in 2011, has faced numerous setbacks, including canceled tenders and project delays.
In response, the government abolished the restrictive “51/49” rule in 2022, which had limited foreign investors to a minority stake in Algerian companies. This move has encouraged international investors by allowing them to hold majority stakes in renewable energy projects.
The nation’s goal is to reach 15 GW of renewable energy capacity by 2035. To help meet this target, the government is also exploring opportunities in hydrogen production.
Algeria plans to produce both blue and green hydrogen as part of a long-term strategy to reduce its reliance on gas exports. This hydrogen strategy, announced in 2023, targets annual exports of 30 to 40 TWh, potentially generating $10 billion per year.
Algeria’s latest solar tenders are a significant step toward a greener energy future. By combining foreign investment with local industry support and ambitious goals, the nation is positioning itself as a regional leader in renewables. With 3 GW of new solar capacity on the horizon and a clear focus on building a domestic industry, Algeria’s energy transition is set to reshape the country’s power landscape.
