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OPEC member Algeria plans to install up to US$3.6 billion worth of solar photovoltaic (PV) projects to produce renewable electricity for export and for meeting increasing domestic power demand.
The solar power facilities are expected to have a combined installed capacity of 4,000 megawatts (MW), the office of Prime Minister Abdelaziz Djerad said in a statement.
The OPEC member, which generates most of its electricity from natural gas, plans to have those solar PV plants installed between 2020 and 2024, the prime minister’s office said. The project for the new solar power plants, called TAFOUK1, is part of the government’s plan to boost power generation from renewable energy sources.
The whole project will require investments of between US$3.2 billion and US$3.6 billion, and is expected to create 56,000 jobs during the construction phase and 2,000 jobs during the operational stage, the government said.
Apart from meeting growing domestic demand and positioning Algeria to export electricity, the new solar projects will help it preserve its oil and gas resources, the government said.
In Algeria, the oil and gas industry is the backbone of the economy, accounting for 20 percent of GDP, and 85 percent of total exports, according to OPEC data.
The oil price crash hit Algeria’s finances, and earlier this month, the country decided it would slash its budget for this year by 50 percent due to the drastically lower income from oil after the price crash.
Algeria – which was already feeling a squeeze on foreign exchange reserves even before oil prices collapsed in early May due to the Saudi-Russian oil price war and the global demand crash in the pandemic – is now taking drastic action to protect its finances this year.
Due to the low oil prices, another oil and gas producer in the Middle East and North Africa (MENA) region, Oman, has recently decided to liquidate a solar power company it funded together with Shell because of the persistent depression in oil prices.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.