Algeria - Public Works, Infrastructure Development, and Water ResourcesAlgeria - Public Works
As a key industry for Algeria’s economic development, the construction sector’s growth remains positive despite the impact of lower oil prices on the government budget. In 2018, Algeria imported more than $100 million (USD) worth of construction equipment from the US. The sector grew 2.5% in 2018 and accounted for about 6% of the country’s GDP in 2018. The building materials segment, which grew by 16.3% in the first quarter of 2018, is particularly promising as Algeria builds on recent investments in manufacturing plants and shifts its focus to scaling up exports. After a decade of rising prices, the Algerian real estate market experienced a gradual slowdown in 2017 and through most of 2018.
The decrease in oil prices hurt infrastructure growth, leading to the cancelation of many projects, as reflected in the growth rate of public works and water segments which fell from 4.4% to 3.7%.
Sub-Sector Best Prospects
- Construction machinery and equipment for housing and public works
- Modular prefabricated housing units
- Civil engineering services
- Portable power generation systems for construction sites
- Localized power generation systems for isolated communities
- Water treatment equipment
- Transportation products and equipment
- Road modernization and expansion
Housing: In October 2017, the Algerian government stressed that housing and infrastructure development are key priorities. Population growth and rapid urbanization have led the government to increase public investment in housing. In the 2015-2019 investment plan, the public funding projection for housing development alone amounts to $30 billion.
Water resources: Rapid urbanization has led to a growth in water management needs as massive housing projects require readily available water. Agricultural irrigation, water potabilization, and desalination are among the key priorities for the government. Water management facilities are being developed. The current network includes 75 dams across Algeria. Nine new dams are under construction and will be operational by 2020. The government of Algeria aims to build 55 new dams by 2030 to achieve a storage capacity of 12 billion cubic meters. The 2015-2019 investment plan includes $17.5 billion for water resources.
Transportation infrastructure: Another priority for the government – projects including rail systems, roads, airport modernization and ports.
Shipping is essential to the national economy with the vast majority of Algeria’s commercial trade moving through the national port network. Algeria is planning on upgrading the country’s ports with the hope of making Algeria a Mediterranean hub to accommodate large vessels. Algeria currently has 11 commercial ports and 95% of its imports arrive by sea. Planned government spending on port projects for 2015-2019 is at about $5.3 billion.
$37 billion was allocated for projects related to rail services. Development of the 5000-km rail network is a priority for the government under the current five-year investment plan.
Road modernization includes feeder highways to the recently completed 1,200 km east-west highway. The project will require rock crushing and screening stations, placement of fiber optic lines along the highway, tele-surveillance systems for road safety, and many gas stations. Development of asphalt bitumen and civil engineering project management will be needed to realize Algeria's road construction goals. Another key project is the construction of the Trans-Saharan Highway in 2019 with a 2400 km length running from Algiers to Niger, which is 90% complete. A 200-km stretch remains to be built of a 500-km branch road to Mali. The project cost is estimated at $3 billion.
The new terminal of Algiers international airport opened partially in May 2019 and was built by a Chinese construction company. The project budget was estimated at $877 million.
Energy: Sonatrach and Sonelgaz, state-owned oil and electricity companies respectively, announced a $50 billion investment plan 2016-2021. This plan includes building new energy plants, housing for workers, transport, infrastructure and more.
The Algerian population is approximately 41 million and is expected to reach 50 million by 2030. This rapid growth creates lots of opportunities for U.S. companies:
- $3.7 billion allocated for housing sector
- 17.5 billion allocated for water management projects
- Sonatrach and Sonelgaz $56 billion investment plan 2016-2021
- Drinking water distribution improvement
- Improving wastewater treatment and water pollution control
- Building 32 dams and 25 water transfer systems
- Completion of all desalination stations under construction
- National Roads Agency (AGA) is providing financing for the expansion of roads
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For more information about opportunities in the public works and infrastructure sector, please contact the Commercial Section at the U.S. Embassy in Algiers
Further resources for the Algerian infrastructure sector can be found at the websites for the Algerian Ministry of Public Works and Transportation, Ministry of Finance, Ministry of Energy, Sonatrach, and Sonelgaz.
Algeria Public Sector Trade Development and Promotion