Algeria Selects AfDB as Key Partner for Major Rail, Energy and Mining Expansion

The country’s 2025 Finance Law authorises carefully planned external borrowing, specifically directed toward high-impact, large-scale national infrastructure.

 

In a major development signalling Algeria’s renewed engagement with global financial institutions, the African Development Bank (AfDB) has been officially identified as the country’s primary international financing partner, marking a significant turning point in Algeria’s economic strategy and its longstanding relationship with the Bank Group.

The announcement came during AfDB President Dr Sidi Ould Tah’s official visit to Algiers on 16–17 November 2025, where he held extensive discussions with President Abdelmadjid Tebboune and senior government leadership. Dr Ould Tah lauded President Tebboune for selecting the AfDB as Algeria’s principal counterpart in managing the country’s return to structured external financing.

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Algeria Reopens to External Financing Through 2025 Finance Law

The country’s 2025 Finance Law authorises carefully planned external borrowing, specifically directed toward high-impact, large-scale national infrastructure. After years of self-financed growth supported by hydrocarbons revenue, Algeria is now seeking externally assisted development to accelerate diversification and industrial transformation.

At the centre of this shift is an ambitious $2.8 billion railway project for the Laghouat–Ghardaïa–El Meniaa line, spanning 495 kilometres across challenging Saharan terrain.

This project forms the first operational phase of the Trans-Saharan Railway, a monumental corridor that will ultimately link northern Algeria to Tamanrasset, connect with Niger, and serve multiple landlocked Sahel states. Beyond boosting national mobility, the railway is expected to become a major continental logistics artery, opening up Saharan mining zones and facilitating secure north–south trade flows.

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Game-Changing Railway Expansion: 10,000 km Network by 2030

Algeria aims to double its national railway grid to 10,000 kilometres by 2030 and reach 15,000 kilometres in the long term. This expansion—one of the largest railway development drives on the African continent—seeks to:

• Reduce the cost of transportation across industries

• Integrate isolated and sparsely populated regions

• Enable domestic processing of critical and industrial minerals

• Strengthen north–south and trans-Sahel trade corridors

Minister of Hydrocarbons and Mines Mohamed Arkab emphasised that Algeria’s mineral wealth must no longer be exported in raw form.

“We can no longer accept exporting our raw materials unprocessed. We must add value before exporting,” Arkab said.

The government’s new industrialisation agenda highlights local refining, beneficiation, and value addition, especially in metals, petrochemicals, and renewable-energy-linked industries.

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$60 Billion Investment Plan to Boost Industrial Output and Energy Transition

Between 2025 and 2029, Algeria is poised to invest $60 billion to strengthen downstream hydrocarbons, expand petrochemicals, and scale emerging industries such as:

• Hydrogen and ammonia

• Carbon-neutral fuels

• Fertilisers and plastics

• Rubber and tyre manufacturing

• Mineral processing facilities

Algeria’s strategy aligns closely with AfDB’s vision for mineral sovereignty, industrial depth, and regional supply-chain integration—especially as global demand for rare earths, iron, zinc, gold, and battery minerals grows.

Many of these resources lie deep in the Saharan heartland. The Trans-Saharan Railway will serve as the critical logistics backbone, linking mines to processing zones, ports, and export markets.

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AfDB Affirms Full Support for Algeria’s Industrial Vision

President Ould Tah reiterated Africa’s collective need to protect and leverage its mineral wealth, referencing recent studies—such as BloombergNEF’s findings—that position Africa as a competitive hub for battery precursor production.

“Localisation of value, industrialisation, and mineral sovereignty are key pillars of Africa’s future,” Ould Tah stressed.

He called for a coordinated African strategy to ensure minerals serve continental development rather than external extraction models.

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Strengthening Water Security: Desalination as a National Priority

During his visit, Dr Ould Tah inspected the large-scale “Fouka 2” seawater desalination plant, a centerpiece of Algeria’s strategy to counter water scarcity amid Mediterranean climate stress.

Algeria currently operates 19 desalination plants, with five more coming online by 2027. These will raise desalination’s contribution to 60% of Algeria’s national water supply by 2030—one of the highest ratios in the region.

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Energy Security: Algeria’s LPG Model Seen as Blueprint for Africa

Algeria provides 75% of its households—including remote desert communities—with reliable LPG supplies through domestic transport and storage infrastructure developed over decades.

This large-scale LPG network is considered a continental model for clean cooking transitions, with AfDB supporting similar initiatives across sub-Saharan Africa.

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Unmatched Execution Capacity: 950 km of Railway Built in 24 Months

Senior officials, including Interior Minister Saïd Sayoud and Public Works Minister Abdelkader Djellaoui, highlighted Algeria’s exceptional domestic engineering capacity.

The nation completed 950 kilometres of new railway in two years, using only Algerian firms, technology, and manpower. This execution capability is essential for:

• Mining and industrial corridors

• North–south connectivity lines

• Urban transport expansions

It also demonstrates Algeria’s readiness to implement megaprojects with international-financing partnerships.

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Algeria’s Vision Aligns With AfDB’s Transformation Agenda

Dr Ould Tah praised Algeria’s clarity of purpose and capacity for delivery:

“The ambition of the Algerian government, the quality of its projects, and its execution capacity make it a central partner for Africa’s transformation.”

The deepening partnership between the AfDB and Algeria is set to play a defining role in shaping Africa’s infrastructure, industrial, and energy landscapes over the coming decade.