Algeria, Germany Review Investment Cooperation Program, Eyeing Enhanced Economic Ties
Image: El Mawkie
Takeaway
The institutional twinning program between AAPI and the German Federal Ministry for Economic Affairs and Energy signals a concerted effort to improve Algeria's investment climate and attract foreign capital. International investors should monitor AAPI's progress in digitalization and streamlining administrative processes, as these improvements could significantly reduce bureaucratic hurdles and enhance investment returns. The focus on diversifying Algeria's economy beyond hydrocarbons presents opportunities in sectors like renewable energy, manufacturing, and technology.
The steering committee for the institutional twinning program between the Algerian Agency for Investment Promotion (AAPI) and the German Federal Ministry for Economic Affairs and Energy convened a meeting to assess the progress of the program, which began in November 2025 and is slated to last for eight months. The meeting, held via video conference, was led by the Director-General of the AAPI. The program is funded by the European Union and aims to modernize economic governance and consolidate the strategic partnership between Algeria and Germany.
The twinning program seeks to foster the exchange of expertise and best practices in modernizing management tools, improving governance frameworks, and developing mechanisms for promoting and attracting investment. AAPI aims to strengthen its institutional capacity through digitalization and the strategic use of economic data, accelerating procedures, ensuring transparency, and enhancing Algeria's attractiveness to foreign investors. Germany has become a strategic partner for Algeria, with bilateral trade reaching €2.6 billion (~$2.8 billion) by 2021, consisting mainly of German exports of machinery, vehicles, and chemical products, and Algerian exports of hydrocarbons and petrochemicals.
Germany's expertise in economic and technological transitions complements Algeria's abundant solar and natural resources. In December 2025, several Algerian-German investment projects and memorandums of understanding were concluded, covering sectors such as industry, digital technology, and university training. These agreements were announced during the first edition of the German-Algerian Investment Summit (GAIS), marking the 20th anniversary of the Algerian-German Chamber of Commerce and Industry (AHK).
German company KSB, specializing in pumps and valves, is investing in local production to supply the hydraulic, energy, industrial, petrochemical, and construction sectors. Reichhart Logistic is preparing to launch operations in Algeria as a subcontractor for the automotive construction sector, focusing on exhaust systems. Weiss Chemie + Technik and Algerian company ECBF Industrie have partnered to produce industrial, construction, automotive, and shipbuilding adhesives.
Looking ahead, natural gas deliveries via the Transmed pipeline are expected to commence in 2026. A new cultural agreement, which came into force in February 2025, is set to strengthen academic and linguistic exchanges, continuing the mission of the Goethe Institute in Algiers. Continued monitoring of the AAPI's efforts to streamline administrative procedures and provide targeted support to investors will be crucial for assessing the long-term impact of this cooperation.