Algeria’s minister of energy, Arkab Mohamed, has announced plans for a giant, 4 GW solar project which will be developed through annual tenders up to 2024.
The $3.2-3.6 billion Tafouk 1 solar field is expected to be tendered in five 800 MW procurement rounds, starting this year, a local source told pv magazine.
Announcing the project on May 20, Minister Mohamed said the facility is expected to create 56,000 construction jobs and 2,000 roles once operational. The sprawling project site will encompass ten administrative divisions, or wilayas, in the Hautes Plaines region of the Atlas Mountains in northern Algeria.
“Local content will be an important component in these tenders for PV modules, cables and mounting structures,” said pv magazine’s source. “This is part of [an] Algerian government strategy to create jobs and local knowhow but the imports of raw materials for module production will be granted exemptions from import duties and [given] other fiscal breaks.”
The local commentator added, several Tier 1 Chinese module manufacturers are approaching Algerian counterparts with a view to developing unbranded, original equipment manufacturer (OEM) modules in Algeria using certified bills of materials to enable competitive pricing for made-in-Algeria products. “The Algerian PV supply chain is strong enough to take up this challenge,” said the source.
The source stressed the role the government had played in enabling the Tafouk 1 scheme, by removing the decade-old “51/49 rule”, which capped overseas investment in Algerian companies at 49%. That restriction was lifted at the end of last year for renewables businesses considered non-strategic.
The government still needs to create the conditions to encourage foreign investment in order for the 4 GW solar plan to succeed, according to pv magazine’s source, and should also establish an agency with technical and financial expertise. “This will allow the emergence of an ecosystem [which can deliver] bankable contracts, among many other legal and contractual aspects,” they said.
A document recently published by the Algerian Electricity and Gas Regulation Commission predicted the domestic module industry would have reached 500 MW of annual production capacity in the first quarter of this year.
The Algerian government held tenders for off-grid, hybrid solar-diesel and PV projects last year. Both procurement rounds were part of the country’s plan to deploy 22 GW of clean energy generation capacity by 2030, including 13.6 GW of solar. Algeria had around 423 MW of solar generation capacity at the end of last year, according to the International Renewable Energy Agency.