Algeria

Ville, paysage urbain, Algérie, mer — © Fayçal Sellam / AFD

Located at the heart of the Maghreb, Algeria has several strong assets: a strategic geographic position, significant hydrocarbon resources, and a young population. However, the country now faces several challenges, including reducing its dependence on hydrocarbons, boosting value creation, and addressing environmental threats. A long-standing partner, AFD supports Algeria in developing human capital, fostering economic diversification, advancing a low-carbon transition, and protecting the environment.

Context

Covering an area of over two million km2, Algeria is the largest country in Africa and in the Arab world. As a gateway to the African continent, Algeria has an ideal strategic position, opening onto the Mediterranean basin and, therefore, Europe. By extension, and thanks to the richness of its energy sources, it holds a certain influence over the different regional groups to which it belongs.

Algeria has been able to diversify its economy by reforming its agrarian system and modernizing its heavy industry. That said, hydrocarbons still represent almost all of the country's exports, seeing as the country is a key producer of natural gas and oil. This economic orientation is a major challenge: Algeria needs to reduce its dependence on hydrocarbons by relaunching its economic growth and promoting the development of sustainable cities.

Present in Algeria since 1968, AFD supports the country in its economic, energy, and urban development projects. It operates in “Group” format, alongside Proparco, its private sector financing arm, and Expertise France, the interministerial agency for technical cooperation. AFD Group mobilizes grants to support knowledge production, the deployment of expertise, technical assistance programs, capacity building, and civil society-led initiatives. It is also able to offer concessional loans and guarantees. In addition, the Group manages programs funded through European Union delegated funds.

AFD's Algeria office is directly attached to the North Africa regional office in Casablanca.

Our approach

AFD and Algeria: supporting sustainable growth

Algeria is working to build the skills of its workforce. In this context, AFD Group supports Algerian ministries and their agencies to strengthen staff capacities and assist with the implementation of ambitious transformation projects.

In the water sector, AFD has financed training programs for the past ten years, benefiting vocational schools under the Ministry of Water Resources and Water Security, as well as ministry staff.

We also support Algerian local authorities through a major capacity-building program for senior officials, focusing on heritage management and enhancement, and urban planning.

In the health sector, Expertise France is implementing a program to support the screening, diagnosis, and care of autism, and recently completed a program on hospital hygiene and the prevention of healthcare-associated infections in partnership with the university hospitals of Oran and Batna. The Group’s technical cooperation subsidiary is also leading European twinning projects between Algerian and French public institutions.

Urban mobility is a key part of daily life in Algeria’s major cities. Better organizing cities and their transport systems, and implementing a “sustainable city” policy, also supports a shift toward a low-carbon trajectory. At the request of the Ministry of Transport, AFD worked with the Algiers Metro Company to develop a preliminary design for a multimodal transport hub at the Haï el-Badr metro station. This study also included the creation of a methodological guide to inform planning and design processes for this type of hub.

In 2020, the Algerian government adopted a new program to guide its energy transition. The program aims to preserve and enhance fossil fuel resources, shift energy production and consumption models, develop green energy, and protect the environment. AFD supports the country in this transition by assisting the Ministry of Energy and Mines in mastering scenario modeling tools for the energy sector through 2050. AFD is also conducting a study to assess the volume of greenhouse gas emissions avoided through the introduction of green energy into the national energy mix.

AFD is providing technical expertise to Algerian energy operators as well, including a feasibility study on the hybridization of thermal power plants in the Grand South region, in partnership with the SKTM company. In addition, AFD has joined forces with ADEME and its Algerian counterpart, APRUE, to explore new avenues for cooperation on energy efficiency.

Economic diversification is a key challenge for Algeria’s sustainable development. AFD Group is supporting the country in implementing programs that combine economic diversification, environmental protection, and the creation of sustainable jobs. Several projects are currently underway with funding from the European Union:

Expertise France is implementing Algeria’s Blue Economy Strategy, with a focus on research, entrepreneurship and innovation, socio-economic support for fishers, and maritime surveillance. The technical cooperation agency is also supporting the Agricultural Sector Support Program (PASA), which aims to lay the groundwork for sustainable olive cultivation in the Soummam Valley.
AFD is supporting the green and circular economy program ECOVERTEC, in partnership with UNIDO. A dedicated Green Economy Office will be tasked with training micro, small, and medium-sized enterprises (MSMEs), start-ups, and social economy businesses in circular economy principles. The office will also support them in developing action plans and seeking financing, while engaging the banking sector to support circular economy actors.

The protection of biodiversity and natural resources is central to AFD’s work in Algeria. The agency has supported several ambitious projects focused on protecting coastlines, forests, and promoting agroecology:

AFD supported the creation of protected areas on the Habibas Islands near Oran, and in the Taza National Park and surrounding islets near Jijel. In Kouali coves and the Habibas Islands, it backed an integrated management model for coastal and marine areas, including sustainable financing mechanisms benefiting local communities and marine and coastal ecosystems. AFD also provided technical expertise to the Ministry of Environment to combat land-based pollution in the Gulf of Ghazaouet.
In partnership with the General Directorate of Forests, AFD implemented a project focused on Mediterranean forest ecosystems in the Senalba forests (Djelfa) and the Chréa forest (Blida). The project teams analyzed the effects of climate change on forest areas and developed strategies to mitigate those impacts while enhancing the value of these ecosystems.

AFD also supports civil society organizations involved in environmental protection, agroecology, and rural community support. It provides funding to the Al-Arz association for local development, to producer and farmer organizations in rural areas through the French NGO Fert, and to groups such as the Torba collective and the Beni Isguen Environmental Protection Association (APEB), which promote agroecology on irrigated land in Mitidja and the oases.

Between 2000 and 2005, AFD supported several major infrastructure programs:

The reconstruction program for areas affected by the 21 May 2003 earthquake in Boumerdès, near Algiers.
The 2003 urban renewal program, which led to the rehabilitation of 56 sites across 19 wilayas (provinces).
The transfer of drinking water from the Taksebt dam to the Algiers metropolitan area in 2003.
The development and modernization of suburban passenger rail services in Algiers in 2005.

AFD also works closely with Algerian civil society across a wide range of areas. For more than a decade, it supported the multi-stakeholder Joussour program, which played a key role in mobilizing and structuring local civil society. AFD also supports the associations Flambeau Vert de l’Environnement, Green Tea, and Jeunesse Plus, along with their partner Icosi, to promote collective entrepreneurship in the Mediterranean. It works with Karama and its French partner Batik International to support women survivors of violence, and with several other associations working to improve access to healthcare for vulnerable populations, in partnership with Médecins du Monde.