BY: Dr. Hana Saada
Algeria’s Strategic Energy Project Revived After Arbitration Settlement and New Partnership Agreement
Algiers, Algeria | April 16th, 2025 — In a significant development for Algeria’s energy infrastructure, the National Electricity and Gas Company (Sonelgaz) has reached a preliminary agreement with the Spanish firm Duro Felguera to resolve a longstanding dispute over the stalled Ain Oussera power plant project. The agreement includes transferring the completion of the 1,200 MW combined-cycle power station to a consortium of Chinese companies, marking a pivotal step in revitalizing one of the country’s most critical energy initiatives.
The Ain Oussera power plant, located in Djelfa province, was initially awarded to Duro Felguera in 2014. However, the project faced significant delays and was suspended in June 2024 due to financial difficulties encountered by the Spanish company. Sonelgaz subsequently initiated international arbitration, seeking €413 million in damages for breach of contract. In response, Duro Felguera proposed a settlement of approximately €100 million to amicably resolve the dispute and avoid prolonged legal proceedings .
Under the new agreement, the completion of the power plant will be undertaken by a Chinese consortium comprising China Petroleum Engineering & Construction Corporation (CPECC), Anhui Power Construction Corporation (APCC), and Northwest Electric Power Design Institute (NWEPDI). The consortium is expected to resume construction promptly, with the plant anticipated to become operational within nine months of the final agreement’s signing.
This resolution not only salvages a vital energy project but also underscores Algeria’s commitment to enhancing its energy production capabilities. The Ain Oussera plant is poised to play a crucial role in meeting the country’s growing electricity demands, particularly in the high plateau and southern regions, thereby contributing to the stability of the national power grid.
