Municipalities given the green light to procure power from IPPs
South African municipalities given the green light to procure power from IPPs. Image: 123rf.

The government of Algeria is preparing to launch a call for tenders for independent power producers (IPPs). The aim of this call for expressions of interest is to select companies to produce 1,000MW of renewable energy.

The call for tenders, which will be launched between June and July 2021, will be divided into 10 lots of 100MW each, open to foreign investment.

In a decree published on 29 April 2021 in the official gazette, the Algerian government empowered Chems Eddine Chitour, the Minister of Energy Transition and Renewable Energies, to manage and supervise the entire operation.

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In terms of renewable energy production, Algeria lags behind its Moroccan and Egyptian neighbours. But the country wants to diversify its electricity mix. This is what justifies the call for tenders that Algiers is currently preparing.

The aim is to obtain a new installed capacity of 1,000MW. This electricity will be produced from renewable sources, the most abundant of which in the North African country is solar.

Conditions for foreign investors

The Algerian government is preparing to set up a bankable electricity purchase agreement for the IPPs that will be selected at the end of the process. These investors will, however, have to meet certain requirements, such as the use of equipment manufactured locally in Algeria. These are mainly solar panels, assembly structures and electrical cables.

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Algeria already has several factories manufacturing equipment for the production of solar energy. In the Boukherana industrial zone, near Chelghoum El Aid (400 km from Algiers), the Algerian company Milltech has a factory capable of supplying 100MW of solar panels per year.

In the wilaya of Ouargla, another factory will soon produce 160MWp of solar panels per year. In June 2020, the Algerian company SPS (Système Panneaux Sandwiches) and Qi-Energy, a company based in Dubai, UAE, launched a joint venture for the manufacture of mounting structures for the modules.

Local content optimisation

Local sourcing of construction materials for renewable energy plants will reduce electricity purchase prices in Algeria. In the Algerian Programme for the Development of Renewable Energy and Energy Efficiency (PENREE) launched in 2012, the authorities were counting on an installed capacity of 20,000MW of renewable energy, including 13,575MW of capacity for solar and 5,000MW for wind by 2030.