Algeria Aligns with AfDB as $2.8 Billion Trans-Saharan Rail Phase Accelerates Industrial and Logistics Strategy
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Algeria has formally designated the African Development Bank as its primary external financing partner as it reopens to international capital markets, anchored by a $2.8 billion, 495-kilometre rail link that forms the first phase of a Trans-Saharan corridor toward Niger. The initiative is core to a broader infrastructure programme aimed at lowering transport costs, integrating remote southern regions, and enabling domestic value-addition in hydrocarbons and critical minerals.
During a November 16–17 visit to Algiers, AfDB President Sidi Ould Tah endorsed President Abdelmadjid Tebboune’s decision to channel renewed external borrowing through the Bank, framing it as a strategic upgrade in bilateral cooperation. Under the 2025 Finance Law, the Laghouat–Ghardaïa–El Meniaa line is budgeted at roughly $2.8 billion, serving as the backbone of a planned Trans-Saharan Railway extending to Tamanrasset and ultimately Niger, establishing a logistics spine for Sahel-region trade and opening access to underdeveloped resource basins.
The rail programme is embedded in Algeria’s target to double its national network to 10,000 km by 2030 and extend to 15,000 km over the longer term. Officials reported 950 km of rail delivered in the past two years using domestic financing and engineering capacity, supporting strategic corridors for industrial and mining development.
Industrial policy is shifting toward deeper processing of hydrocarbons and minerals. Algeria aims to increase domestic transformation of hydrocarbons from 30 percent to 60 percent by 2035, supported by a $60 billion 2025–2029 public investment framework. Expansion in petrochemicals, hydrogen, gas-derivative industries, and upgrades in fertilizer, tire, oil, and mineral-processing plants form the core of this value-add strategy. Mining priorities focus on leveraging Sahara-region iron, zinc, gold, and rare earth deposits, with the Trans-Saharan Railway expected to unlock economically viable extraction and local beneficiation.
Ould Tah reaffirmed AfDB’s alignment with Algeria’s industrial ambitions, highlighting value localization, mineral sovereignty, and Africa’s comparative advantage in battery-precursor production, referencing BloombergNEF analysis. He called for continent-wide coordination to safeguard and upgrade Africa’s critical mineral base.
The visit also focused on energy and water security. AfDB officials toured the “Fouka 2” desalination plant, part of Algeria’s fleet of 19 facilities. Five additional plants are planned by 2027, positioning desalination to meet about 60 percent of national water demand by 2030. Algeria’s LPG distribution system, which serves roughly 75 percent of households including in desert regions, was highlighted as a model for clean-cooking initiatives supported by the Bank.
Interior Minister Saïd Sayoud and Public Works Minister Abdelkader Djellaoui emphasised Algeria’s strong domestic implementation capacity, citing rapid rail expansion as evidence of a reliable supply chain for large-scale transport and industrial projects.
Formal designation of AfDB as lead external financing partner is expected to streamline project preparation, derisk co-financing, and improve bankability for core transport, industrial, and water projects under the 2025 Finance Law. The initial Trans-Saharan rail phase could materially reduce logistics costs in southern regions, strengthen Sahel connectivity, and generate EPC, rolling-stock, and maintenance opportunities. Higher value-addition in hydrocarbons and minerals will increase demand for petrochemical, hydrogen, and mineral-processing investments, subject to execution discipline, fiscal pacing, and global commodity-cycle conditions.
On utilities, Algeria’s plan for desalination to meet 60 percent of national demand implies sustained procurement in membranes, power-integration solutions, brine-management systems, and long-term O&M services. Delivery of 950 km of rail in two years suggests a strong domestic project-delivery ecosystem, reducing timeline and cost risks across upcoming corridors tied to industrial and mining growth.
