Algeria is undertaking one of the most significant energy transformations on the African continent, signalling a strategic shift away from its long-standing dependence on oil and natural gas.
As global markets increasingly embrace cleaner energy sources and countries accelerate efforts to meet climate commitments, Algeria is positioning itself as a future leader in renewable energy and green hydrogen production.
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With abundant sunshine, vast land resources, and growing investor interest, the North African nation is leveraging its natural advantages to build a more diversified and sustainable economy. The government has set an ambitious target of generating 15 gigawatts (GW) of renewable energy capacity by 2035, marking a major milestone in reshaping the country’s energy landscape.
For decades, hydrocarbons have remained the backbone of Algeria’s economy. Oil and gas account for more than 88 percent of exports and approximately 83 percent of export earnings, leaving the country highly exposed to fluctuations in global energy prices.
While these resources have generated substantial national income, they have also highlighted the risks associated with excessive dependence on a single sector.
Recognising the importance of greater economic resilience, Algerian policymakers are increasingly turning to renewable energy as a pathway toward sustainable growth, job creation, and long-term energy security.
At the centre of Algeria’s strategy is a major investment programme estimated at approximately $60 billion through 2029.
The investments are focused on expanding solar infrastructure, developing wind energy projects, modernising the national electricity grid, and advancing green hydrogen initiatives.
Given Algeria’s location within the Sahara region, the country benefits from some of the world’s highest levels of solar irradiation, making solar energy one of its most promising and cost-effective resources.
The expansion of renewable energy is not only aimed at reducing dependence on fossil fuels but also at addressing rising domestic energy demand.
Algeria’s growing population and expanding industrial sectors continue to place increasing pressure on electricity generation and fuel consumption. By producing more electricity from renewable sources, the country can preserve a larger share of its oil and gas output for export while simultaneously reducing carbon emissions and strengthening energy independence.
Another major pillar of Algeria’s long-term strategy is the development of a competitive green hydrogen industry.
Green hydrogen, produced using renewable electricity, is increasingly viewed as a critical component of the global clean energy transition. European countries, in particular, are seeking reliable suppliers to support their decarbonisation goals.
Algeria’s geographic proximity to Europe, combined with its established energy infrastructure and vast renewable energy potential, places the country in a strong position to become a major player in this emerging market.
By investing early in hydrogen production and related technologies, Algeria aims to secure a strategic role within the future global energy economy.
To accelerate progress, the government has introduced reforms designed to attract greater foreign investment and expand private-sector participation.
One of the most significant policy changes has been the removal of the long-standing 51/49 ownership rule, which previously required Algerian entities to maintain majority ownership in many sectors.
The easing of these restrictions has improved investor confidence and increased international interest in Algeria’s renewable energy projects. Foreign investors and technology providers are now finding new opportunities to participate in the country’s clean energy expansion plans.
A key institution driving this transformation is Société Algérienne des Énergies Renouvelables (SHAEMS), a joint venture established by Sonatrach and Sonelgaz.
SHAEMS plays a central role in managing renewable energy tenders, coordinating large-scale projects, and supporting the country’s clean energy objectives. Through partnerships with local and international stakeholders, the organisation is helping lay the foundation for Algeria’s renewable energy future.
Despite the challenges associated with transitioning from a hydrocarbon-dominated economy, Algeria’s commitment to cleaner energy reflects a broader recognition that economic diversification is essential for long-term prosperity.
The transition is expected to create new industries, generate employment opportunities, attract foreign capital, and strengthen the country’s position within evolving global energy markets.
At the same time, expanding renewable energy capacity will contribute to climate change mitigation efforts and support broader global sustainability goals.
As Africa continues to emerge as an increasingly important player in the global energy transition, Algeria’s renewable energy expansion demonstrates how resource-rich nations can harness their natural advantages to build more resilient economies.
By combining ambitious targets, strategic investments, policy reforms, and green hydrogen development, Algeria is laying the groundwork for a future that extends far beyond oil and gas.
The country’s progress offers a compelling example of how energy transformation can become both an economic opportunity and a pathway toward sustainable development in the twenty-first century.
