Algeria’s new 3 GW solar tenders mark a major shift in its energy landscape, aiming to expand solar beyond remote areas and develop a local renewable energy sector. With high solar potential, the tenders reflect Algeria’s commitment to reduce its reliance on gas and boost domestic solar capacity.
Transform Energy Sector with 3 GW of New Capacity
Algeria — a nation traditionally dependent on gas — is set to take significant strides in solar energy through two large-scale solar tenders with a combined capacity of 3 GW. This marks a shift for the country, where solar energy has been largely limited to remote Sahara villages and research projects.
With around 3,000 hours of sunshine annually, Algeria has immense solar potential. The northern regions receive nearly 1,700 kWh/m² per year, while southern areas reach 2,263 kWh/m². Yet, by the end of 2023, the country had only 437 MW of solar capacity, with most of its electricity still generated from domestic gas.
In 2023, only 1.5 MW of newly added solar capacity was grid-connected. The remaining installations powered public lighting and remote areas. This has kept solar’s role in the energy mix relatively minor, but the government’s new 3 GW solar tenders could soon shift this balance.
President Tebboune’s Vision and Solar Tenders
President Abdelmadjid Tebboune aims to diversify Algeria’s energy sources and reduce dependence on gas exports. Between 2018 and 2022, hydrocarbons accounted for 19% of the nation’s GDP, highlighting the urgent need for an energy transition. According to Mourad Issiakhem, director of energy efficiency at CEREFE, the new solar tenders could add 4 GW of renewable capacity by early 2025.
The tenders launched by Sonelgaz — Algeria’s national electricity and gas company — awarded contracts for engineering, procurement, and construction (EPC) services to manage projects locally. Although EPC contracts can be more expensive than independent power producer (IPP) models, the EPC route provides greater control over project management.
The tenders attracted major players. A 1 GW portion awarded five contracts to companies including Algeria’s Amimer Energie, Turkey’s Ozgun, and China State Construction Engineering Corp. (CSCEC). These firms will install modules and develop large-scale solar projects across the country.
A second 2 GW tender segment was undersubscribed, but still resulted in major awards to firms like China International Water & Electric Corp. and PowerChina. This wave of projects represents €1.8 billion ($1.96 billion) in investments, with energy prices proposed by the bidders ranging from €0.54/W to €0.81/W.
Renewable Energy Goals and Future Plans
Algeria’s renewable energy program — launched in 2011 — faced numerous setbacks, including canceled tenders and delays in project execution. In response, the government abolished the restrictive “51/49” rule in 2022, which 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.
Algeria’s ultimate goal is to reach 15 GW of renewable energy capacity by 2035. To achieve this, the government is also exploring opportunities in hydrogen production. Algeria aims to produce both blue hydrogen 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 solar tenders mark a significant step toward a greener energy future. By combining foreign investment, local industry support, and ambitious renewable goals, Algeria is positioning itself as a regional leader in renewable energy. With 3 GW of solar capacity on the horizon and a clear focus on creating a local renewable industry, Algeria’s renewable transition promises to reshape the country’s energy landscape.