Algeria opens up power market

22 Jan 2002 – Local and foreign investors will, for the first time, be allowed to build and operate power plants as well as sell electricity in Algeria, following a recent government ruling reported on Sunday by the official Algerian news agency.

The Upper House of parliament voted on Saturday to approve a law scrapping legislation introduced in 1985 and allowing outside investment in the energy sector. The Algerian government hope to attract private finance to fund an ambitious $12bn investment programme for the energy sector over the next ten years, including the modernization of generating facilities and transport facilities.

Following years of civil war and continuing political unrest, Algeria now is experiencing a significant economic upturn, in large part aided by strong oil and natural gas export revenues since 1999. Algeria plans to increase its installed production capacity from 6000 MW to 8000 MW over the next two years to cope with an annual 5 per cent increase in demand.

State-run Sonelgaz currently controls all generation, transmission and distribution of both gas and electricity – having 4.5 million customers.

Currently, Algeria has two links to the Moroccan electricity grid and supplies over 550 GWh of electricity to Morocco. In May 2001, Sonatrach and Sonelgaz established a joint venture – the Algerian Energy Company – to export electricity.

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