AfDB Approves €747m Loan for Strategic Railway Linking Southern Algeria

“This transformational railway project will help reshape economic dynamics in southern Algeria over the long term,” said Abdoulkader Dileita, African Development Bank Country Manager for Algeria.

The Board of Directors of the African Development Bank Group (AfDB) has approved a €747.32 million loan to finance the first phase of Algeria’s Laghouat–Ghardaïa–El Menéa railway line, a major strategic infrastructure project aimed at accelerating economic development in the country’s southern regions.

The railway line will span 495 kilometres once completed and is among Algeria’s flagship priority initiatives. It is designed to strengthen regional integration, expand passenger and freight transport capacity, and significantly reduce logistics costs by improving connectivity between southern Algeria and national and regional markets.

The first phase of the project focuses on constructing priority sections of the railway corridor and installing modern railway systems and equipment, including signalling, safety, and operational infrastructure. These upgrades will lay the foundation for a reliable, high-capacity rail service capable of supporting both commercial and passenger traffic.

The project is expected to play a key role in facilitating the movement of agricultural, industrial, and raw materials, improving supply chains, and enabling southern producers to access broader domestic and export markets more efficiently. By shifting freight transport from road to rail, the railway is also expected to reduce congestion, lower transport emissions, and improve road safety.

“This transformational railway project will help reshape economic dynamics in southern Algeria over the long term,” said Abdoulkader Dileita, African Development Bank Country Manager for Algeria. “It will open up new opportunities for trade, employment, and territorial competitiveness. The Bank is proud to support Algeria in implementing this strategic infrastructure.”

Beyond transport infrastructure, the project includes the development of economic and social platforms designed to benefit young people, women, and local communities along the railway corridor. These platforms aim to support skills development, entrepreneurship, and local economic participation, ensuring that the project delivers inclusive growth alongside physical infrastructure.

The programme also puts in place the technical and operational conditions required for future extensions of the railway network, allowing Algeria to expand rail connectivity deeper into the south as demand grows and additional investment becomes available.

AfDB’s financing is closely aligned with Algeria’s national economic transformation vision, which positions railway development as a key driver of economic diversification, reduced regional disparities, and a transition toward more sustainable and climate-friendly transport systems. Rail transport is seen as a vital tool for unlocking the economic potential of inland and remote regions while supporting long-term development goals.

The project also advances the African Development Bank’s broader strategic priorities, particularly in the area of resilient infrastructure development. It aligns with the four cardinal points vision of the Bank’s new president, Sidi Ould Tah, which emphasises strengthening infrastructure resilience, boosting regional integration, and improving the valorisation and movement of Africa’s raw materials.

Once operational, the Laghouat–Ghardaïa–El Menéa railway line is expected to become a critical backbone for southern Algeria’s transport network, supporting economic growth, job creation, and greater territorial cohesion across the country.