Algeria Launches $2.6 Billion Railway Project to Connect Southern Regions
Image: TSA
Takeaway
The $2.6 billion railway project presents significant opportunities for construction and engineering firms, particularly those with experience in challenging desert environments. Investors should monitor the progress of the tender process and the potential for follow-on contracts related to rolling stock and infrastructure upgrades. The improved connectivity will likely boost economic activity in the southern regions, benefiting sectors such as agriculture, mining, and logistics.
Algeria has initiated a $2.6 billion railway project to enhance connectivity in its southern regions, with the Agence Nationale d'Etudes et de Suivi de la Realisation des Investissements Ferroviaires (Anesrif) issuing two tenders for the construction of a 495-kilometer rail corridor linking Laghouat, Ghardaïa, and El-Meniaa. The project is a part of a larger initiative to connect Algiers to Tamanrasset, spanning 2,000 km. The tenders were issued on March 25, 2026, with a deadline for submissions set for late May.
The new railway forms part of Algeria's broader strategy to modernize its rail network and stimulate economic development in the south. The current Algerian railway investment program has expanded the national network from approximately 4,000 km to 5,738 km in recent years. The country aims to triple its national rail network to around 15,000 kilometers by 2035. In 2007, the National Agency for Studies and Monitoring of Railway Investments (ANESRIF) was established to manage major sector projects. By 2030, Algeria aims to expand the rail length to 15,000 km.
The 495-kilometer rail corridor is divided into two segments. The first segment, costing approximately $1.4 billion, will span 265 kilometers between Laghouat and Ghardaïa and include 21 viaducts, a tunnel, dozens of crossings, and five stations. This segment is further divided into four construction packages. The second segment, estimated at $1.2 billion, will cover 230 kilometers from Ghardaïa to El-Meniaa, passing through towns such as Mansourah and Hassi Lefhel, and will feature multiple structures and three stations. Passenger trains are expected to operate at speeds up to 220 kilometers per hour, while freight services will run at speeds up to 100 kilometers per hour.
The railway project is expected to facilitate the movement of agricultural and industrial products, cutting logistics costs and supporting regional integration. The African Development Bank (AfDB) approved a €747.3 million loan (~$870 million) to fund the first phase of the Laghouat – Ghardaïa – El Menéa project. This project aligns with the Algerian government's vision of developing the railway network as a key lever for economic diversification and reducing regional disparities.
Looking ahead, the focus will be on the timely completion of the Laghouat-Ghardaïa-El Menéa line, with companies submitting bids by late May 2026. The project also includes procurement of rolling stock and additional infrastructure works. Keep an eye on potential partnerships between local and international firms, as well as the impact of the new railway on the transportation of goods and passengers in the southern regions. There are also plans to connect industrial zones, cement plants, silos, and fuel depots to the rail network.