The Ministry of Energy Transition and Renewable Energy of Algeria has launched a tender for the development and deployment of 1 GW capacity of solar projects. The tender will be held by Algerian Renewable Energy Company (SHAEMS), jointly owned by Sonatrach, a state-owned gas giant and Sonelgaz, a power utility. A special purpose vehicle will own the winning projects in which SHAEMS will be allowed to take up a share of up to 25 per cent.

The procurement exercise will be divided into lots ranging from 50MW to 300MW each. Each developer will be allowed to tender for multiple lots with a maximum cumulative capacity of 300 MW. On winning the bid, developers will be awarded a 25-year power purchase agreement (PPA). Local content requirements will not be mandatory for the first tender, but will be included subsequently. Solar developers that use locally manufactured PV components are expected to receive additional bonuses in addition to the granted fixed tariff. The last date for project proposal submission is April 30, 2022.

As per the International Renewable Energy Agency, Algeria had roughly 423 MW of total installed solar capacity by the end of 2020. Over the last two years, the Algerian government has floated tenders for off-grid, hybrid solar-diesel projects and PV projects. The country plans to deploy roughly 14 GW of solar energy capacity by 2030.

REGlobal’s Views: Algeria’s current installed solar capacity is quite less compared to its 2030 target. Thus, such large auctions are necessary for the country to accelerate its solar deployment.