 ELECTRIFYING THE REGION |
As in many developing countries, the liberalization of the electricity sector is a key step towards the development of a modern and efficient industry. In Algeria, the electricity and gas distribution sector will require an investment of $10 billion, of which $5 to $6 billion will go directly towards electricity generation. This sector is in need of a complete reform in order to open up to competition, and Sonelgaz, the national electricity company that holds the monopoly of the production, transport and distribution of electricity, is about to undergo some major changes.
Abdelkrim Benghanem, President of Sonelgaz, is taking the company to new frontiers that involve a step-by-step process to liberalize the sector. "The generation, transportation and distribution of electricity will all be separated. After that, Sonelgaz will be organized as an industrial group, holding the majority of shares of all subsidiary groups. Following a decision by the government, it is then expected that Sonelgaz will open its capital to strategic shareholders while keeping a majority of shares to be able to maintain public service for a period of 6 to 10 years."
| In the meantime, "there will be a period of 3 to 5 years where all the intended bodies will be established, the most important being the regulatory body, independent from Sonelgaz. This body will issue licenses, building permits and will guarantee the regulation of the whole process. At this point, 30 to 40% of the rural electricity market in Algeria will open up".
And how is Sonelgaz preparing for such a shake up? By expanding, says Benghanem. "We intend to attract private capital, and to conquer the European market in partnership with Sonatrach." Not only is Sonelgaz building its electricity capacity through new projects for the production of electricity, the manufacturing of electrical material and accessories, the exploitation of copper mines, gas air-conditioning, and the development of natural gas fuel, but it is also setting ambitious goals to break into new markets.
"Within the framework of our new policy, we intend to create a single company essentially geared toward the opening of the electricity market in Europe" says Benghanem, with a spark in his eyes. "We believe that the European network, excluding Russia, is a market worth US$ 200 billion per year. We are at the doorstep of Europe, we have raw energy and we have ideas, so it is normal to consider that the European market should be within our reach." |
ALGERIA,
