Embassy of the Kingdom of the Netherlands Algiers (Algeria) Trade & Investment Introduction Dear readers, Two important Dutch official missions visited algeria during the first quarter of 2015. The Dutch Minister for Foreign Trade and development cooperation, Mrs Liliane Ploumen visited Algiers on 4 and 5 february 2015 accompanied by a Dutch business delegation from three sectors namely Agriculture, Energy and Maritime industry. During this visit, on 5 february 2015, a Netherlands-Algerian Business Forum took place at El-Aourassi Hotel in Algiers and field visits were conducted by the Dutch companies to the Harbor of Algiers, the state oil and gas company Sonatrach, and to different agricultural commpanies around Algiers, Mrs Ploumen met with the Algerian ministers of Energy, Commerce, Agriculture as well as the Minister of Foreign Affairs.The Netherlands Minister for Foreign and European Affairs, Mr Bert Koenders visited Algeria on 23rd and 24th February 2015 at the invitation of the Algerian Foreign Minister Ramtane Lamamra, Mr Koenders also spoke with the Algerian Minister for Trade, prime Minister Sellal and President Bouteflika. This visit was marked by the signature of a Mermorandum of Understanding between the two countries concerning holdingof regular bilateral consultations . During this period, two main international trade exhibitions were held. From 23 to 26 ferbuaray 2015 an infrastructure and logistics trade fair took place in Oran, where the Embassy plus some Dutch companies like Damen Shipyards, Van Vliet Trucks, NABC and Bucks Consultants International were present. The second one took place from 3 to 6 March 2015 and concerned suppliers of products and services for the oil and gas industry, Blastrac BV and Van Beest B.V were present with stands and MN and Xeptor IT Distribution were represented by local distributors. In May Pollutec covering water industry will take place from 25 to 28 mai 2015. The No. 46/Jan-Mar.2015 Netherlands will be represented by the embassy and some companies. Economy Algeria macroeconomic forecasts (Source : Economic Inteligence Unit, March 2015) Algeria foreign reserves fall $8 bln in three months Algeria foreign exchange reserves dropped by $8 billion in the third quarter of 2014, the central bank governor said, adding to the country falling energy revenue problem. But central bank governor Mohamed Laksaci repeated previous comments from officials that Algeria has enough financial resources to cope with a decline in the price of oil, on which it relies heavily to fund its economic development plans and social programmes. "an adequate level that allows Algeria to cope with external shock," he said, as the country foreign debt is currently at $3.666 billion - the lowest in years. Reserves fell to $185.273 billion at the end of September 2014 from $193.273 billion in the first half of the same year, Laksaci told the APS state news agency. (Zawya, Jan 23rd 2015, http://tinyurl.com/ope8hdh) Embassy of the Netherlands in Algiers (Algeria) - Trade & Investment - No. 46 Jan-Mar.2015 Algeria walks economic tightrope as oil falls For months, Algerian officials repeated their mantra that large foreign exchange reserves would shield the country from collapsing oil prices. In January 2014, Prime Minister Abdelmalek Sellal took to state television and announced that crisis was at the door. With crude prices having more than halved since June, Algeria must plot a precarious path of curbing high public spending without eating into a generous welfare budget that has helped stave off widespread social unrest. The price slide is testing an economic system that relies on energy revenues to pay for social subsidies, from public housing to cheap loans, which helped Algeria avoid the kind of "Arab Spring" uprisings that erupted in its North African neighbours. The balancing act to come is crucial as Algeria's seeks more foreign investment to help increase energy output source of 60 percent of state revenue - which has remained largely stagnant for the last three years. Sellal has announced a public-sector job-hiring freeze covering most areas except energy, health and education. Several planned urban tramway and railroad projects across the country will be postponed, while an expansion of Algiers airport will be financed through bank loans, rather than being state-funded. But some economists say the limited measures announced so far will do little to plug a budget deficit officially forecast at 22 percent of GDP in 2015. Analysts expect more infrastructure projects may be delayed, and say more opportunities in non-energy industries, such as housing and farming, may open for private, and foreign, investment to free up state funds. (OBG, Jan 26th 2015, http://tinyurl.com/lna92un, http://tinyurl.com/lvu9vcx) Algeria's government response to the decline in oil prices The severe fall of international oil prices, to less than half their original value, since mid2014 has imposed strong pressures on Algeria’s economy, which is based mainly on oil and natural gas. This has pushed the government, over the past few months, to adopt two main policies: the first involves taking austere measures in regards to government spending, while the second focuses varying economic activities. The Algerian government has dealt with the oil price crisis by adopting two main policies: Austerity Measures: According to the statement of the Algerian prime minister, Abdel Malek Slal, the government will take several measures that will reduce government spending, such as freezing employment in the public sector, postponing non-urgent large projects and doubling measures that aims to integrate unofficial activities into official activities. It is expected also that the government will increase its taxation pool, as official Algerian estimates point that there is about $60 billion in uncollected taxes, which might represent an important source that compensates for the losses of the fall in oil prices. This also means restructuring the general public finance of the state, as it will go more towards depending on the tax gain in its resources. Foreign Trade operations: The first is the instruction of the Bank of Algeria of 23 November 2014 which cut down the permitted level of commitment of commercial banks regarding imports transctions. The second measure which is under discussion and concerns re-instating Import and Export Licenses. Economic Diversity: The Algerian political discourse confirmed the importance of diversifying economic activities and pointing towards building a strong industrial base. This is to coincide with the modification of the legislative and organizational structure to motivate the private sector, which faced a state of stagnation throughout the past years. In this context, authorities announced on November 2014 the issuing of a new law for investment to attract foreign investments. Current Challenges: The procedures adopted by the government face many challenges. During 2014, Algeria faced multiple protests driven from economic and political demands, which increases the odds of raising the severity of public discontent between different social segments. The government has also declined its role in presenting social services and providing job opportunities. In the case that the crisis continues it contribute in lowering the living standards and rising the poverty and unemployment levels. In light of the difficulty of depending on the private sector in the meantime, due to the stagnant state that it has been suffering from for decades. (Rcssmideast, Jan 15th 2015, http://tinyurl.com/q6u3zt6), Liberte, Jan 2015, http://tinyurl.com/ok8ylrh) Embassy of the Netherlands in Algiers (Algeria) - Trade & Investment - No. 46 Jan-Mar.2015 Short term actions proposed by economits The seriousness of the oil shock, the uncertainty of its duration and its damaging consequences for the whole country necessitate important and urgent actions. The needed short-term solutions to absorb the current oil shock are: - Budgetary policy of the government: a better allocation of subsidies and rationalization of the use of Hydrocarbons Regulation Fund. - Exchange rate policy of the Bank of Algeria: devaluation of the local currency (the dinar). - Import Rationalization: taxing imported products differently depending on their contribution to the national economy and to the satisfaction of basic needs of Algerian society. - Savings: Increase incentives to increase savings. (Maghrebem, Jan 26th 2014, http://tinyurl.com/omrhr8p) IMF Welcomes Economic Momentum in Algeria, but Notices Weaknesses The International Monetary Fund (IMF) said that the Algerian economy is picking up momentum, but it noted weaknesses due to falling oil prices. This is one of the main conclusions of the IMF published in its information note following the meeting of its Board of Directors held on 1 December 2014 as part of its annual assessment of the Algerian economy. The IMF has projected Algeria's real GDP growth to reach 4.0% in 2014, following the 2.8% growth in 2013. The hydrocarbon sector is expected to expand for the first time in eight years, while in the other sectors, the growth remains "supportive." The Fund said that the inflation was down sharply to stand at 2.1%. For the IMF, Algeria "has substantial external and fiscal buffers, but threats to macroeconomic stability are growing," saying for the first time in nearly 15 years, the current account is expected to record a deficit. The Fund said it expects Algeria's fiscal deficit to widen to over 7% due to lower hydrocarbon revenue, a sharp increase in capital expenditure, and continued high current spending. (ABC, Dec 15th 2014, http://tinyurl.com/lvj6d66) Algeria preserves subsidies despite revenue drop Just as parliament was approving the 2015 finance bill - signed by President Abdelaziz Bouteflika on December 2014 - the government found itself facing a serious dilemma: Should it continue its social policies - the cost of which remains exorbitant - or cut them and risk disapproval from the public? For now, members of the government say there will be no back-tracking on social progress: programmes covering housing, help for young entrepreneurs, and subsidies for mass consumption goods are safe. There are still 163.5 billion euros of foreign exchange reserves and the 4.8 billion euro Liquidity Fund. However, those provide a cushion only for the short term, experts warn. The International Money Fund (IMF) said on January 21st that the plunge in oil prices would cost oil and gas exporters in the Middle East including Algeria - and central Asia 107 billion euros, pushing nearly all into fiscal deficits this year, AFP reported. The budget bill signed by the Algerian president had projected the country would post a 41.7 billion euro deficit in 2015 due to the sharp fall in oil prices. (Zawya, Jan 8th 2015, http://tinyurl.com/pb5luga) Algeria oil minister says OPEC may hold emergency meeting before June OPEC may still hold an emergency meeting before its June session to discuss how to tackle a surplus in global oil supplies and a drop in prices, Algeria's energy minister said. He reiterated that oil prices were down because of low consumption and high supplies especially from non-OPEC petroleum-producing nations. Oil prices have been under pressure as the dollar has strengthened and after OPEC decided against an output cut. But OPEC members such as Algeria and Venezuela that rely heavily on energy resources for state spending have been under pressure over their budgets. Algeria's current budget was based on a global oil price of $90 per barrel. (Reuters, Dec 9th 2014, http://tinyurl.com/ke625z5) Non-oil sector supporting Algeria growth c.bank chief Growth in non-oil businesses is supporting Algeria's economy as global oil prices plunge to five-year lows, Algerian central bank governor Mohammed Laksaci said. "Growth is coming mainly from the non-oil sector," Laksaci told Reuters on the sidelines of a financial conference, adding that the country now expected gross domestic product to expand 4 percent this year compared to 2.8 Embassy of the Netherlands in Algiers (Algeria) - Trade & Investment - No. 46 Jan-Mar.2015 percent last year."The private sector is borrowing a lot including the SMEs. This is the second consecutive year of credit growth." Bank credit is projected to expand 20 percent this year compared to 19 percent in 2013 and 15 percent in 2012, Laksaci said, predicting "good growth" for bank profits in 2014. Asked about the impact of falling oil prices on Algeria, a big energy exporter, Laksaci said growth and the balance of payments would be hit but the country's large foreign reserves would limit the effect. th (Reuters, Dec 9 2014, http://tinyurl.com/p7usrqn) Moving on with diversification Non-hydrocarbon industries contribute only 5% of Algeria’s GDP, but over the past decade, the government has made them a focal point for development, and several industrial projects were on the verge of completion in 2014. French car manufacturer Renault opened a €50m assembly plant in November last year. French drugmaker Sanofi Aventis is finalising construction of its AD6.6bn (€61m) plant and distribution centre near Algiers, which will be the company’s largest site in Africa. Elsewhere, fertiliser production boomed last year. In the first nine months exports nearly tripled to $657m from $238m in the same period of 2013. One producer - a joint venture between Sonatrach and Oman’s Suhail Bahwan Holding Group - is slated to increase national capacity by one-third when it begins operations in early 2015. As Algeria continues to focus on increasing value-added activity and local manufacturing, its efforts did start to pay off last year with new investments from both domestic and foreign, but more may need to be done to continue this momentum in 2015 against a tougher global outlook. (OBG, Feb 19th 2015, http://tinyurl.com/lve489v) ENERGY Hydrocarbon sector open to domestic private operators An important news is the opening of the oil sector to local private companies in some branches previously under the monopoly of Sonatrach such us: drilling, exploratoration and development, building production facilities, oil infrastructures projects, waste water traitment projects, telecommunication projects…In this case, Sonatrach 2015-2019 Development Plan will be assigned a budget of $ 90 billion. This program includes the drilling of 124 exploration wells per year, 260 development wells per year, achieving 10,000 km2 / year of 2D seismic and 26 000 km2 / year of 3D seismic. This may present subcontracting opportunities for dutch operators not willing to participate in public tenders. (Liberte, Mar 23rd 2015, http://tinyurl.com/nr8wrst) Ghara Djebilet mine development "The most important among these is the project to produce phosphate from the Ghara Djebilet mine in western Algeria, and we plan to announce an international tender in the second half of the year for this project," Algerian Minister for Industry said. Algeria's phosphate reserves currently stand at around 2.2 billion tons. Phosphate is currently mined from the Tebessa region along the AlgerianTunisian border, but the Algerian government is keen to exploit Ghara Djebilet's potential. Aside from phosphate, the Ghara Djebilet mine is also known for its iron ore reserves. An investment of around USD 20 billion will be needed to develop the mine, which has the capacity to produce approximately 20 million tons of iron ore and phosphate per year. Bouchouareb said Algeria had in March started construction work for a steel factory in Belarah's Jijel Province, located in eastern Algeria. The project is a partnership between Qatari Steel Company and the Algerian government-owned Sider. Algeria produces around 300,000 tons per year of steel but the government hopes to raise output to 2.2 million tons per year by 2017. Algeria currently spends around USD 10 billion a year on steel imports, mostly from Italy, Spain and Turkey. He said an amendment to the investment law of 2001, which is expected to be passed before the end of the first half of 2015, would offer new incentives to foreign investors and allow for a faster licensing process for projects. (ABC, Dec 15th 2014, http://tinyurl.com/lvj6d66 Algeria seeks more oil-exporter cooperation on price drop OPEC member Algeria is seeking more cooperation among oil exporting countries to help counter a sharp fall in global crude prices, its energy minister said. In December, Algeria called for an OPEC production cut in response Embassy of the Netherlands in Algiers (Algeria) - Trade & Investment - No. 46 Jan-Mar.2015 to a more than 50 percent collapse in the price of petroleum, and has since said it was in talks with OPEC and non-OPEC producers to trim the market surplus. Energy Minister Youcef Yousfi met Angola energy minister and Nigeria ambassador to Algeria as part of the consultations, according to state news agency APS. Saudi Arabia has led a no-cut policy in OPEC and the organisation refused to trim output at its Novmber meeting. It holds its next meeting in June and comments from officials so far suggest it will not adjust policy. (Zargaz.ru, Mar 2nd 2015, http://tinyurl.com/ocwjdku) Sonatrach head outlined Plans for the next five years According to Sahnoun, despite the drop in oil prices, his company will continue major investments in oil and gas projects in Algeria. Funding for oil and gas from Sonatrach in the next five years will be at least $90 billion, said the head of the Algerian company. Sahnoun reported that most of the funds will go to development of oil and gas fields and study of new and promising areas in Algeria. The Sonatrach CEO added that the company will spend about $50 billion for these purposes, of which $22 billion will be used for prospecting and exploration of gas fields. Said Sahnoun predicted that in the next three years gas production will commence at six fields, which are being developed with participation of foreign companies, including PTT from Thailand, the American company Hess, Italian ENI, and Vietnamese Petrovietnam, among others. The fields are Touat, Timimoun, Reggane North, Tinrhert, Hassi Bahamou, and Hassi Mena, combined annual production for those fields will reach approximately 26 billion cubic meters of natural gas by 2018. (Zawya, Dec 13th 2014, http://tinyurl.com/o9khdzh) Algeria pumps USD650m into oil projects The government of Algeria has earmarked USD 650 million to develop a series of hydrocarbon projects, which will be carried out by state-owned agencies Sonatrach and Sonelgaz this year, said Khalil Kortebi, director of production technologies at Sonatrach. "The amount will include the renovation of refineries in Arzio and Sekikda and the exploration of traditional hydrocarbon sources such as gas and oil. It will also be used to launch an exploration of unconventional hydrocarbons, open the third gas production unit at Tiguentourine, as well as develop renewable energy and electricity projects," Kortebi explained. Work is currently underway to inaugurate a third gas production unit in Tiguentourine. The Tiguentourine center's output capacity is expected to exceed 2,000 tons of condensed gas and 1,900 tons of liquid petroleum gas. Sonatrach will run the facility together with UK's BP and Norway's Statoil. In a report published last year, the International Monetary Fund (IMF) estimated that the oilreliant economy of Algeria needed a USD 136per-barrel crude price to cover its expenditures in 2014 - the highest among petroleumexporting nations in the region. Algeria's crude production stood at 1.2 million barrels per day during the past three years. In a recent Reuters article, it has been reported that the country is seeking fresh investors to increase energy production so as to compensate for the decreasing output from the existing mature oil fields. Said Sahnoun, director of Sonatrach, told Reuters in a December 2014 report that Algeria will start a new round of bidding for investment in its oil and gas fields by the third quarter of 2015 and that it may improve the terms for bidding companies. (Zawya, Feb 10th 2015, http://tinyurl.com/p3z6ef5) Sonatrach three new discoveries Sonatrach CEO Said Sahnoun said, as quoted by the state information agency APS, that his company has discovered three new oil fields since the beginning of the year. These are two oil and one gas field in Touggourt, Ghardaia and El Bayadh respectively. Moreover, the head of Sonatrach remarked that today, the inflow of carbohydrates at the wells is around 3 to 4 thousand barrels per day. Based on the results of the previous year, a total of 30 oil and gas fields have been discovered in Algeria, of which 29 were discovered independently by Sonatrach and one in cooperation with Gazprom International. (Zargaz.ru, Mar 2nd 2015, http://tinyurl.com/ocwjdku) Algeria rejoins global LNG race The sprawling new unit, spread across 54 hectares of land, is expected to boost natural gas production in Algeria. Run by state-owned Sonatrach, the US$4 billion plant has the capacity to produce 4.7 million metric tons of LNG, 58,000 tons of butane, 275,000 tons of Embassy of the Netherlands in Algiers (Algeria) - Trade & Investment - No. 46 Jan-Mar.2015 propane gas, 300,000 tons of ethane, 47,000 tons of gasoline and 115.5 normal cubic meters of helium-enriched gas.The facility is being built adjacent to the world's first LNG plant that opened in 1964, but was closed down in 2010, and could mark a new chapter for Algeria to revive its place in the global LNG industry. Algeria has long been a major player in global gas markets and it has historically been the second-largest gas supplier into Europe. Last year, it was the world's seventhlargest exporter of LNG, shipping out about 5% of the world's total LNG exports. Algeria already has liquefaction units located along the Mediterranean Sea at Arzew and Skikda, with combined capacity of 3.2 billion cubic feet (bcf) per day.The country currently has more than 35 foreign companies operating exploration and production contracts, typically via production sharing agreements with Sonatrach, which holds at least a 51% interest in all new projects. The International Energy Agency (IEA) expects Algeria to be among the biggest producers of natural gas over the next few decades, given the country’s enormous conventional reserves – said to be tenth largest in the world and second only to Nigeria in Africa. Algeria also has the world’s third largest unconventional natural gas reserves. And the government harbours big plans for the resource, with production expected to rise to 145 billion cubic meters (bcm) by 2040. Indeed, Algerian gas production has been declining over the past seven years and new investments are needed to compensate for the decline of mature gas fields, such as Hassi R’Mel, while Sonatrach needs to develop the many discoveries made over the past years. Analysts believe the country will need to sweeten the contracts to lure international oil and gas companies that have a number of jurisdictions to choose from. Rising competition The market for LNG has also changed dramatically and become extremely competitive since Algeria led the LNG industry back in 1964. However, the good news is that natural gas, and especially LNG, is the new fuel of choice and eagerly demanded by Asian, European, African and Central American markets. Algeria also has a few pipelines heading north, but it needs to build more infrastructure to improve its network, as it hopes to capitalise on a new window of opportunity. GALSI, a 282-bcf-per-year pipeline connecting to Italy is facing logistics, costs, pricing formulas and long-term contractual commitment issues.“The TransSaharan Gas Pipeline is proposed to run slightly over 2,600 miles to deliver natural gas from Warri, Nigeria to Algeria (via Niger), which will then link to the MEDGAZ route to Spain, although this link may be changed in the future,” said the IEA. “However, security concerns about militant groups across remote areas in the Sahel, in addition to growth constraints to Nigerian natural gas production, have presented considerable downside risks to investors interested in financing the projects.” (Zargaz.ru, Mar 2nd 2015, http://tinyurl.com/ocwjdku) Algeria Sonatrach eyes bigger share of Asian LNG market Algeria is looking for greater share of the Asian liquefied natural gas (LNG) market as the North African gas exporter diversifies its customers to offset declining demand in Europe, a senior official at Sonatrach said. Algeria supplies around a fifth of Europe's gas needs. But it has struggled to revive stagnating energy production over the last few years. "The best opportunities are now in Asia," Ahmed Mazighi, planning director at Sonatrach, told Reuters on the sidelines of a North Africa oil and gas conference in Algiers. "Demand in Europe is falling." Algeria produced and exported around 29 million cubic metres of LNG in 2013, he said. LNG production has increased from last year as two LNG units came on stream in 2014. (Af.reuters, Dec 8th 2014, http://tinyurl.com/obsjbgp) Russia's Gazprom, Algeria's Sonatrach mull cooperation on LNG supplies Russia Gazprom said it had discussed possible cooperation with Algeria Sonatrach on supplies of liquefied natural gas. It also said that drilling at the El Assel oil and gas block in Algeria, jointly developed by Gazprom and Sonatrach , has confirmed the existence of hydrocarbon resources. (Zawya, Feb 19th2014, http://tinyurl.com/nma8n6q) Embassy of the Netherlands in Algiers (Algeria) - Trade & Investment - No. 46 Jan-Mar.2015 Egypt to import LNG from Algeria Egypt from April 2015 onwards will become an importer country of gas and oil with its deal with Algeria to import six cargoes of LNG, the Petroleum and Mineral Resources Ministry of Egypt said. Egypt’s Petroleum Minister Sherif Ismail and Algerian Energy Minister Youcef Yousfi held bilateral cooperation talks. th (Worldbulltin, Dec 5 2014, http://tinyurl.com/oaaj4cn) Algeria expands fertiliser production with new plant The sector is set to grow in 2015 as existing operators ramp up production and a third operator prepares to come online early in the year. Sonatrach, the state-owned energy firm, teamed up with Oman’s Suhail Bahwan Holding Group (SBGH) to create a third operator, Al Djazaïria Al Omania Lil Asmida (AOA). The recently-completed AOA plant is based in Arzew − a major centre for the petrochemical industry – with the plant built at a cost of $2.6bn. Sonatrach expected to launch production and the commercialisation phase during the first quarter of 2015. AOA will produce ammonia converted to urea in the initial stages, with an expected capacity of 2.4m tonnes, increasing national production by about one-third. th (OBG, Jan 5 2015, http://tinyurl.com/lo69gdt) Algeria aims to double diesel, petrol output Algeria plans to double its petrol and diesel output when three new oil refineries start production in 2018, the head of refining department at state energy firm Sonatrach said. "We are currently producing 9 million tonnes of diesel and 4 million tonnes of petrol per year," the Sonatrach official, Zoubida Benmoufouk, said on state radio. "The three refineries will produce 9 million tonnes of diesel and 4 million tonnes of petrol." The new refineries are under construction in Tiaret, west of Algiers, and in the southern provinces of Hassi Messaoud and Biskra, she said. Algeria exports several oil-refined products but also imports petrol and diesel due to growing domestic demand. Diesel purchases from abroad dropped to one million tonnes in 2014 from 2.8 million tonnes in the two previous years, she said, without giving figures for petrol imports. Algeria largest refinery, Skikda, has produced 18 million tonnes of various refined products after resuming full operations that followed improvement work, exceeding its target of 16.5 million tonnes, Benmoufouk said. (Zawya, Feb 16th 2015, http://tinyurl.com/mp8e2tz) RENEWABLE ENERGY Algeria Aims for 13.5 GW of Solar Power by 2030 Energy minister, Youcef Yousfi, announced a plan to install 13.5 gigawatts of solar photovoltaic capacity by 2030. According to pv magazine, Algeria could generate over ¼ of its energy needs from renewables by 2030. The country plans on investing in 5 gigawatts (GW) of wind energy and an additional 2 GW of concentrated solar power (CSP) to offset the need of an additional 22 GW of natural gas power generation. To nudge Algeria into adopting more clean energy technologies, the country’s energy ministry launched a feed-in tariff (FiT) last year. The program offers solar power generators about $0.17 per kilowatthour, and has contributed to what is currently about 350 MW worth of solar PV projects that are currently on the drawing board. (Cleantechnica, Feb28th 2015, http://tinyurl.com/ld2b4jg) Studies on Sustainable Energy Action Plan run by the EU in three Algerian cities Studies to support the development of Sustainable Energy Action Plans (SEAP) for the Algerian cities of Batna, Boumerdes and Sidi Bel Abbes have been launched in the framework of the EU-funded programme "Cleaner Energy Saving Mediterranean Cities" (CES-MED), with working groups set up to start collecting data in the three communities. Work schedules for each of the communities were presented by the project during workshops held in each of the three cities in December 2014. The scope of intervention and a proposal for methods of data collection were also set out, as were the goals of the annual programme for 2015 in each of the three communities. The "Cleaner Energy Saving Mediterranean Cities" (CES-MED) project is an EU-funded regional initiative set up to provide training and technical assistance support to Local and National Authorities in the southern Mediterranean region, with a view to help them respond more actively to sustainable policy challenges. (inpe-info, Jan 14th 2015, http://tinyurl.com/qyjr5cs) Embassy of the Netherlands in Algiers (Algeria) - Trade & Investment - No. 46 Jan-Mar.2015 Desertec: the renewable energy grab? A plan to power Europe from Saharan solar plants seems to have stalled, but several large North African solar projects are still going ahead despite local concerns. Hamza Hamouchene asks: where did the Desertec project go wrong, and can desert solar power yet play a role in a democratic and sustainable future? Can this really be true? It’s based on data from a research thesis written by Nadine May in 2005 for the Technical University of Braunschweig in Germany. According to May, an area of 3.49 million km² is potentially available for concentrating solar power (CSP) plants in the North African countries Morocco, Algeria, Tunisia, Libya and Egypt. She argues that an area of 254 kilometres x 254 kilometres would be enough to meet the total electricity demand of the world. The amount of electricity needed by the EU-25 states could be produced on an area of 110 kilometres x 110 kilometres (assuming solar collectors that could capture 100 per cent of the energy). A more realistic estimation by the Land Art Generator Initiative assumed a 20-per-cent capture rate and put forward an area approximately eight times bigger than the May study for meeting the world’s energy needs. (Newint, March 2015, http://tinyurl.com/opnm4os) INFRASTRUCTURE Algeria to add 10 hospitals by 2019 The Algerian government has allocated around USD 5.44 billion in 2015 for the health sector as part of plans to build 10 new hospitals and renovate existing hospitals, said Abdelmalek Boudiaf, minister of health, population and hospital reform. "Work has already started on five hospitals and the government is expected to announce a tender before the end of 2015 for the selection of international companies that will construct the other five hospitals," he told Zawya. The minister said the 10 hospitals are scheduled for delivery by 2019 and that the National Agency for Healthcare Equipment and Management of Health Infrastructures would coordinate with the winning bidders to ensure timely delivery of projects. "The Algerian government did not consider local companies for these huge hospital projects because they do not have enough experience in executing projects to international standards," health ministry spokesman Salim Belkassam told Zawya. He said five foreign companies had won the bids for the five university hospitals for which work is already underway, including Italian group Rizzani De Eccher/Hôpital San Rafael, which won the bid for the 700-bed Satawali municipal hospital in Algiers, and United Kingdom's International Hospital Group, which won the tender for the 500-bed hospital in Tlemcen. Algeria currently has 570 government health facilities with a combined capacity of 67,000 beds, according to Belkassam. The new hospitals will add 5,200 beds. The health minister said the government would maintain planned expenditure on these projects despite the drop in oil prices. He said the ministry could cut costs by reducing the budget for imported medicine to USD 1.5 billion from more than USD 2 billion now. (Zawya, Feb10th 2015, http://tinyurl.com/jwo535u) 600km of Lines to be Laid in Algeria Minister of Transport Amar Ghoul has announced 600km of new railway lines to be laid in Algeria. This is the latest project in one of the greatest railway network construction mega projects in the world today. The first line will link Ouargla and Laghouat, while intersecting it will be a route passing from Touggourt via Ouargla to the port of Jijel via Souk Ahras and Annaba. The third line on this new network will link Ouargla to Touggourt. The new investment should enable investment in the south of Algeria while significantly reducing the burden on the region’s road network. Algeria is in the midst of one of the biggest railway construction mega projects in the world. The lines above are designed to get ore and oil shipments to the coast, and smooth the path to improving the country’s economy. Better infrastructure is core to kick starting a country’s economy. A number of other lines are being laid for passenger transport, which are aimed at tackling congestion in the country’s cities and lubricating the economy through faster movement of people and goods. (Menarailnews,Nov27th2014, http://tinyurl.com/lm5guau) Algeria signs off two contracts of Hauts Plateaux motorway work The Algerian Council of Ministers has approved two contracts for stretches of road on the Hauts Plateaux motorway. No details of the Embassy of the Netherlands in Algiers (Algeria) - Trade & Investment - No. 46 Jan-Mar.2015 contractors were given for the work that is to link Lambidiri to Draa Lahmar via Ouled Fadhel. Construction is expected to take 18 months. Last March, World Highways reported that work on the 1,000km Hauts-Plateaux motorway project was to begin that month. Construction cost for motorway’s 10 sections was estimated to be around US$8.94 billion, according to Algerian Minister for Public Works. He said local firms are being contracted to carry out the works exclusively, with each section requiring 36 months of work. The government announced early last year that it had earmarked around US$53 billion development of the infrastructure including roads, motorways and civil engineering structures in the next five-year plan, from 2015-2019. (WHW, Jan 8th2014, http://tinyurl.com/lxodpx3) Algeria road maintenance budget set Algeria has set a new 2015 road maintenance and upgrade budget for its highway network. The Ministry for Public Works announced it is setting aside close to US$347 million for maintenance work on the country's highways during 2015. The network is now 32,000km long, following a series of projects in recent years. The budget will include the updating of traffic signalling technologies. (WHW, Jan 1st 2015, http://tinyurl.com/l3spslo) Algeria to engage Japanese government over dispute with Cojaal The Algerian government is now talking directly to the Japanese government in an effort to resolve a dispute with sacked Japanese highways consortium Cojaal, In 2006, Cojaal won a US$5 billion deal to build the 359km eastern section of Algeria’s proposed 900km East-West Highway within 40 months. Algeria divided the contract into three sections, with the Chinese company Citic-CRCC winning the central and western sections, which in total was to cost around $6 billion. Cojaal - the Consortium Japonais Pour l'Autoroute Algérienne - is a joint venture comprising five of Japan’s largest companies: Japan’s two largest contractors Kajima and Taisei, general contractors Hazama and Nishimatsu as well as the trading house Itochu. (WHW, Jan 21st 2015, http://tinyurl.com/mt5awf5) AGRICULTURE State to continue supporting dairy industry to encourage domestic production Minister of Agriculture and Rural Development Abdelwahab Nouri said that the public authorities continue to support the dairy industry to encourage domestic production. On the measures taken by the State to promote domestic production of milk in the perspective of reducing the import bill, Nouri said the sector had adopted, in recent years, a strategy meant to increase the number of dairy cows and expand the areas reserved for forage production. He recalled that Algeria imported 154,000 cows since 2009, an average of 25,000 cattle a year. In addition to the financial assistance provided by the ministry to farmers, ranging from 25 to 50% of the value of materials and equipment, the state also conducted a VAT reduction for the benefit of importers of production inputs, including dairy cows, the minister added. (Aps, Jan 22nd 2015, http://tinyurl.com/o4llo5j) Support to agriculture, food industry and tourism in Algeria: EU programme presents achievements The EU-funded support programme to Economic Diversification in Algeria presented its achievements in Algiers to partners and stakeholders following four years of cooperation in the sectors of agriculture, food industry and tourism. Among these: • Agriculture: computerisation of the monitoring / evaluation systems of 3 directorates of the Ministry of Agriculture and Rural Development and their deployment at local level. • Food Industry: support to implementation of the Technical Centre for Agri-Food Industries, which will now be able to provide services such as distance learning, support and advice for professionals and microbiological analysis for the agro-food sector in Algeria. • Tourism: transfer of knowhow and experience for tourism professionals in Algeria, with a total of nearly 800 people trained. (Inpe-info, Mar 24th 2015, http://tinyurl.com/njrykk8) Embassy of the Netherlands in Algiers (Algeria) - Trade & Investment - No. 46 Jan-Mar.2015 Algeria starts maize production Algeria started its first commercial maize production this year and will soon approve applications from foreign investors to boost output and reduce reliance on imports, the head of the country farmers union said. Algeria, the world fifth-largest grain importer, is seeking to raise domestic production, and its output depends mostly on rainfall levels in the North African state. It imports nearly all of its maize needs and uses it for animal feed. Official figures show maize purchases from abroad in 2013 reached 3.2 million tonnes at $891.78 million. That effort adds to steps to open up the agriculture sector to foreign investment, part of a wider move to diversify the economy which relies heavily on oil and gas. Two years ago, Algeria invited expressions of interest from foreign and local investors to take stakes in pilot farming enterprises. Alioui said firms from the United States, Italy, Britain and Canada had submitted applications to invest in maize cultivation projects. "Applications will be accepted and approved because those firms do have experience and successful investment elsewhere," Alioui said, without naming the firms. "They will help us cut imports." (Zawya, Dec 11th 2014, http://tinyurl.com/qcauewa) Algeria wheat purchase hits 900,000 T as it seeks quality-traders Algeria bought about 900,000 tonnes of milling wheat in a tender last January, far more than reported previously, as it tried to secure higher-quality grain that may become scarce on the world market, European traders said. Traders initially reported that Algeria state grains agency OAIC had booked 450,000 to 550,000 tonnes of optional-origin wheat for shipment in March and April, before raising their estimate to 575,000-675,000 tonnes. The latest consensus of about 900,000 tonnes showed OAIC desire to snap up higher-grade wheat in the face of Russian export curbs, which may further reduce the availability of bread wheat following poor quality harvests in several countries, including France. "They were scared by events in Russia. OAIC, which does not publish details of its tenders, postponed the tender from mid-December when worries about Russian export curbs caused a surge in wheat prices. Algeria does not accept Russian wheat in its tender but an expected decline in Russian shipments due to an upcoming export tariff will reduce a key supply of higher-quality wheat on the world market. OAIC push to book good quality grain explained the fact that it paid a range of prices, traders said. Traders continued to cite a lower price of about $277 a tonne, cost and freight, for most of the wheat, along with levels around $280 per tonne for the rest. (Zawya, Jan 8th 2015, http://tinyurl.com/nh85vyy) hundreds trained under EU-funded scheme in agriculture sector The EU-funded technical support mission for economic diversification in Algeria has completed a comprehensive training scheme for 731 executives and staff from various institutions of the agricultural sector, carried out over the last two years. The training courses were mainly aimed at directors, senior managers and executives, researchers and professionals of the technical institutes and research and training centres from the agriculture sector. With a budget of over €1.1 million over two years (February 2013 to January 2015), the programme aimed to strengthen the capacity of human resources in the agricultural sector to effectively implement the Agricultural and Rural Economy Renewal Policy. (Inpe-info, Mar 9th 2015, http://tinyurl.com/qfb9uah) WATER Irrigation expansion to support Algeria’s agricultural output External pressures in 2014 have left Algeria’s agricultural sector more exposed than usual, which presents a perennial challenge given the size of the country’s import bill. But measures to strengthen long-term performance such as expanding the use of irrigation are beginning to yield benefits. More worryingly, this year has also seen a comparatively poor cereal harvest. According to provisional figures released in July 2014, cereal production for the 2013/14 harvest fell by more than third to about 3m tonnes and a five-year low. The early onset of hot, dry conditions in April had a particularly dramatic impact on the eastern provinces, which represent a large portion of national production, with 12ha of cereal Embassy of the Netherlands in Algiers (Algeria) - Trade & Investment - No. 46 Jan-Mar.2015 acreage destroyed by more than 20 crop fires in the Sétif region alone. The decline in output highlighted the variability of Algerian cereal production given the sector’s heavy reliance on rainfall. Only 3% of local production is based on irrigation. Dam builders Over the long term, however, the country’s cereal output has increased, from an annual average of around 2.7m tonnes over the past two decades to around 5m tonnes in the five years to 2012/13. Productivity is also on the rise – the number of farmers achieving output of more than 5 tonnes per hectare grew from 16 in 2010 to 279 last year. Irrigation is top of the state’s agenda. The government plans to increase the amount of land benefiting from irrigation to 1m ha by 2019, which it is hoped will help lift yields. The Algerian Cereals Office (Office Algérien Interprofessionnel des Céréales, OAIC) announced that it had distributed some 900 irrigation systems to local farmers in 2014, increasing the irrigated surface area of cereal plantations to 600,000ha by April. In addition to expanding the use of irrigation, the government is also planning a number of new measures to help modernise the sector and increase agricultural output. In July 2014, the minister for agriculture and rural development, Abdelouahab Nouri, told media that the government intended to pass several new laws and regulations for the sector in the coming parliamentary term, including finalising plans to lease state-owned agricultural land. A number of cross-border initiatives with European government bodies are also looking to improve agricultural productivity. (OGB, Sep 18th 2014, http://tinyurl.com/qbxngl5) Fighting floods: EU project helps Algerian authorities develop national strategy As many as 689 sites in Algeria have been identified as vulnerable to flooding in a study on the fight against floods, carried out in the framework of the EU-funded water programme EAU II. The study aims to develop a national strategy against floods, proposing structural and non-structural measures, including better consideration of risks in planning regulations or the development of a forecasting and warning system. Experts visited 50 of the identified sites in order to establish a detailed diagnosis and specific recommendations. Following a stocktaking first phase, and before proposing an action plan and training, the team of experts presented the conclusions of the second stage of the study on ‘types of floods’ in a workshop in Algiers on 18 February. (inpe-info, Feb 27th 2015, http://tinyurl.com/otaweer) Algerian SEACO, French SEM renew water management deal French Marseille's water distribution company SEM and Algerian Constantine's water purification company SEACO has renewed a management agreement between them "in the form of a technical assistance deal," Minister of Water resources said. (Aps, Mar 23rd 2015, http://tinyurl.com/lcsu96c) SERVICES Algeria earmarks USD500m for tourism projects in 2015 Minister of Tourism and Handicrafts Noriya Yamina Zerhoni told Zawya that despite the steep drop in global oil prices, Algeria would not reduce its budget for development of the tourism sector as part of efforts to attract 4 million tourists in 2015 compared with 2.8 million last year. Algeria's central bank governor said last month that expansion of the country's non-oil sectors is expected to push the country economic growth above 4% in 2015, according to a Reuters report. Mohammed Zoubir Sofian , head of investment at the ministry, told Zawya that the government had approved 861 tourism projects to be carried out by Algerian firms at a cost of around USD 5 billion by 2018, and which are expected to raise the country's hotel capacity by 104,200 beds from a current capacity of 96,605. He said around 400 projects, costing USD 2 billion, are already underway, with total capacity of more than 54,000 beds. FOREIGN INVESTMENT Sofian said that there were currently only four tourism projects in Algeria being carried out with foreign investment from the United Arab Emirates, Qatar, Saudi Arabia and Jordan. "The existing investment law that limits foreign stakes to 49% is not attractive to foreign investors, who prefer to manage the Embassy of the Netherlands in Algiers (Algeria) - Trade & Investment - No. 46 Jan-Mar.2015 hotels instead of only coming in as partners to develop tourism projects," he said. Sofian said the tourism ministry had signed agreements with 11 banks, including six staterun banks, to assist local companies in securing financing to carry out tourism projects. "Most of the problems facing these investors revolve around lack of liquidity, which leads to delays in projects work for years," he said. Around 130 investors have received a total of USD 1.1 billion in financing from the banks, he said. (Zawya, Jan 20th 2015, http://tinyurl.com/pelxa97) PHARMACEUTICALS Algeria Pharmaceuticals and Healthcare Report Q2 2015 The Algerian government's five-year investment and industrial development plan to beimplemented from 2015-2019 will provide opportunities to foreign drugmakers looking to enter theAlgerian pharmaceutical market or to expand their operations in the region through strategic partnershipsor agreements. This is illustrated by several cross-border recent agreements, including a partnershipestablished between multinational pharmaceutical firm AstraZeneca and local drugmaker Saidal to transferexpertise and manufacture locally. Meanwhile, the Algerian government will maintain an expansionaryfiscal while pushing forward healthcare facilities construction and modernization, contributing to marketgrowth rates over the next years. However, operating challenges including weak intellectual property lawand a poor regulatory environment will continue to weigh on the market potential and deter a moresubstantial rise in foreign direct investment. Headline Expenditure Projections Pharmaceuticals: DZD302.12bn (USD3.73bn) in 2014 to DZD330.54bn (USD4.08bn) in 2015; +9.4%in local currency and +9.4% in US dollar terms. Forecast revised upwards from last quarter. Healthcare: DZD861.65bn (USD10.64bn) in 2014 to DZD932.62bn (USD11.51bn) in 2015; +8.2% inlocal currency and +8.2% in US dollar terms. Forecast revised upwards from last quarter. (Marketrsrch, Feb 4th 2015, http://tinyurl.com/onxncs8) MADE IN HOLLAND Did you know? Worldwide ranking •1st in production and auctioning of cut flowers and flower bulbs •1st in number of broadband connections per 100 inhabitants •1st in density of road network •2nd largest exporter of agricultural products •2nd in Quality of Water Transportation •4th largest seaport •4th in Logistics performance index •5th most competitive economy in the world: Global Competitiveness Report 2012-2013 •5th in overall export of goods •5th in investment abroad •6th most innovative country: Global Innovation Index 2012 •7th largest importer of goods •8th in foreign direct investment in the Netherlands•10th in export of commercial services •10th in import of commercial services (Hollandtrade, 2015, http://tinyurl.com/mesu5tm) Dutch solutions to global food security A recent report into global food security, commissioned by the UK government, has called for instant action in order to avert global hunger. The Foresight Report on Food and Farming Futures predicts that, with the world population expected to reach 8.3 billion over the next 20 years, demand for food is set to increase by some 40 percent, fresh water by 30 percent, and energy by up to 50 percent. The study postulates that the conditions are being created for a 'perfect storm' of growing population, climate change and diminishing resources for food production. (Hollandtrade, 2015, http://tinyurl.com/pyhl9sr) Embassy of the Netherlands in Algiers (Algeria) - Trade & Investment - No. 46 Jan-Mar.2015 UPCOMING EVENTS 14 – 17th May 2015 SIPSA- Agrofood Algeria, 14-17 May 2015 Algiers 20th – 23 rd Apr 2015 DJAZAGRO 2015 Agriculture and Agrofood Trade Fair, 20-23 April 2015, Algiers Contacts Palais des Expositions d'Alger Pins Maritimes Alger, 16000 Algérie +213 21 386727 +213 387058 [email protected] http://www.safex-algerie.com/ 3– 7 th May 2015 BATIMATEC- Salon international du bâtiment et des matériaux de construction "Batimatec" (3-7 mai, Alger) Contacts SPA BATIMATEC Expo ADRESSE : 107, Rue des Aveugles Draria ALGER. TEL: +213 20 34 77 03 /04 FAX: +213 21 35 51 01 / +213 21 35 34 18 / 213 23 26 60 11 / +213 23 26 59 88 [email protected] www.batimatecexpo.com Société Algérienne des Foires et Exportations Palais des expositions-Pins Maritimes Mohammadia-BP 366 - Alger Tél : 213-21-21-01-25 à 30 Fax : 213-21-21-05-40/ 213-21-01-01 [email protected] www.safex.dz 14 – 17th May 2015 SITEV - Salon International Du Tourisme Et Voyages, 14-17 May Algiers Contacts Palais des Expositions d'Alger Pins Maritimes Alger, 16000 Algérie +213 21 386727 +213 387058 [email protected] http://www.safex-algerie.com/ 25 – 28th May 2015 11th International trade show for water services, technology and equipment, 25 – 28th May Oran convention center Contacts Siège social 1, rue Bachir Attar, Maison de la Presse, Alger Courrier : BP 72 Hassiba Ben-Bouali, Alger [email protected] www.symbiose-env.com May– 2015 SIHEM-Hospital equipment Algeria 2015 Contacts Société Algérienne des Foires et Exportations Palais des expositions-Pins Maritimes Mohammadia-BP 366 - Alger Tél : 213-21-21-01-25 à 30 Fax : 213-21-21-05-40/ 213-21-01-01 [email protected] www.safex.dz 27th May– 1 st Jun 2015 FIA - FOIRE INTERNATIONALE D’ALGER 2015 Contacts Société Algérienne des Foires et Exportations Palais des expositions-Pins Maritimes Mohammadia-BP 366 - Alger Tél : 213-21-21-01-25 à 30 Fax : 213-21-21-05-40/ 213-21-01-01 [email protected] www.safex.dz Contacts Palais des Expositions d'Alger Pins Maritimes Alger, 16000 Algérie Embassy of the Netherlands in Algiers (Algeria) - Trade & Investment - No. 46 Jan-Mar.2015 +213 21 386727 +213 387058 [email protected] http://www.safex-algerie.com/ 5 – 8 Oct 2015 Salon « Djazair OIL & GAS » Palais des Expositions – Alger (05 – 08 Octobre 2015) Contact : MANAHO International Monsieur OURAK Abdellah Gérant MANAHO International 00 213 664 31 19 32 [email protected] Official agenda of Algerian participation in international trade fairs abroad for 2015 For the official agenda of the participation of Algeria in international trade fairs abroad for year 2015 see : http://www.caci.dz/index.php?mact=News,cntnt01,deta il,0&cntnt01articleid=104&cntnt01returnid=59 USEFUL LINKS ALGERIA -Frequetly Asked Questions by investors: http://www.andi.dz/index.php/en/faq - Ministère du Commerce: www.mincommerce.gov.dz - Ministère de l’Energie et des Mines: www.mem-algeria.org - Ministère des Ressources en eau: www.mre.gov.dz - Ministère de l’Industrie, de la PME et de l’Investissement: www.mipi.dz - Ministère de l’Agriculture et du Développement rural: www.minagri.dz - Direction Générale des impôts: www.mfdgi.gov.dz et www.dge.gov.dz - Direction Générale des Douanes: www.douane.gov.dz - Agence Nationale de Développement de l'Investissement: www.andi.dz - Chambre algérienne de commerce et d'industrie: www.caci.com.dz - Office Nationale des Statistiques: www.ons.dz - Office National du Tourisme: www.ontdz.org - Portail du tourisme algérien: www.algeriantourism.com - Air Algérie: www.airalgerie.dz - Algérie Ferries: www.algerie-ferries.com - Transport maritime (SNTM/CNAN): www.sntm-cnan.com.dz - Société Algérienne des Foires et Exportations (SAFEX): www.safex.com.dz - Foires et salons: www.safexalgerie.com/fr/manifestations.html - Portail algérien des énergies renouvelables: portail.cder.dz Sites B2B: - Made in Algeria: www.made-in-algeria.com - Réseau des entreprises algériennes: www.readz.com Sites d’appels d’offres: - Algeria Tenders: www.algeriatenders.com - www.tendersinfo.com/global-algeriatenders.php - MEED: www.meed.com/countries/other/algeria Embassy of the Netherlands in Algiers (Algeria) - Trade & Investment - No. 46 Jan-Mar.2015 - Santé: www.medicaltenders.com/medical_tender s_algeria.htm NETHERLANDS - Netherlands Enterprise Agency RVO (former NL Agency/Agentschap NL): http://www.rvo.nl/ (NL) or http://english.rvo.nl/ (EN) - Port de Rotterdam: www.portofrotterdam.com Embassy The Embassy of the Netherlands in Algiers is open from Sunday to Wednesday from 08:00 to 16:30 and on Thursday from 08:00 to 14:00 throughout the year, excluding the Algerian and Dutch public holidays. The consular section is open from Sunday to Thursday from 9h00 to 12h00. The Embassy is closed every Friday and Saturday (weekend). Adress: 23, Chemin Cheikh Bachir ElIbrahimi, 16030 El-Biar ou BP 72, 6030 ElBiar (Alger) T: +213 21 92 28 29 F: +213 21 92 29 47 W: alger.nlambassade.org/ Linkedin group for Dutch-Algerian trade: http://www.linkedin.com/groups/EmbassyNetherlands-in-Algeria-6571865/about For your suggestions and/or comments please contact our economic section: -Rene Spitz Deputy Head of mission in charge of economic affairs [email protected] - Djilali Tahar-Belkacem Trade officer [email protected] [email protected] - Khaled Benchaalal Agricultural advisor [email protected] [email protected] AVERTISSEMENT: le contenu de cette lettre d’information ne reflète en aucun cas la position de l'Ambassade des Pays-Bas à Alger. Elle se compose d’une sélection d'articles publiés dans la presse nationale et internationale et dont la source est clairement indiquée.
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