Interview: Touffik Fredj
What can be done to increase large-scale power generation in Algeria?
TOUFFIK FREDJ: Large-scale power generation projects are very demanding. In our most recent case, the $2.7bn, 9-GW turbine project we are conducting with Sonelgaz, the challenges for such an ambitious project were evident even from the beginning, although by and large it has been a success.
Projects of this nature and size often face logistical complications. For example, we had to arrange for the delivery of various parts to different ports, so as to not inundate any single facility or increase congestion. One key factor that allowed the process to proceed as smoothly as it did is Algeria’s “green corridor” initiative, an expedited Customs process put in place by the Algerian government to facilitate the importation of goods and materials that are of strategic importance or that contribute to the development of productive activity. This helped ensure that key parts and materials were able to enter the country in an efficient and timely manner.
How can Algeria improve human capital in the power and energy sectors?
FREDJ: Human resources are a commonly-cited challenge in Algeria, and while it is true that there are problems, it is important to underscore the fact that there are also strengths to be found in the local labour pool, such as language aptitude and creative and innovative problem-solving.
The government obviously plays a crucial role in strengthening the education sector, but companies also need to make appropriate investments in training and recruitment. For example, our new turbine production facility in Batna, which is being operated in conjunction with Sonelgaz, will conduct comprehensive training sessions for our employees in production techniques and quality control. We have also launched an ambitious executive education programme in conjunction with the National Polytechnic School of Algiers.
If private sector initiatives such as these, together with the government’s efforts, are successful, then the impact on the energy and manufacturing sector could be significant. Even research and development (R&D) can take hold here, which could help contribute to the establishment of a truly virtuous cycle; as the government and companies invest in R&D, momentum can pick up quickly, facilitating additional funding for such critical activities.
To what extent can local content be incorporated into energy manufacturing?
FREDJ: A strong and dynamic energy sector, in any country, can be further strengthened by a strong domestic industrial sector. There are needs for servicing, fabrication and innovation, for example.
In this regards, Algeria stands out among emerging economies. This is most evident with respect to the scope of its industrial infrastructure. The growth of the economy, which began in earnest in the early 2000s, has led to major investments in the country’s infrastructure networks, which helps support manufacturers. For instance, for a country of its size, it is very well electrified. Algeria has a long history of substantial industrial capacity, which only began to decline in the late 20th century. The potential for growth in manufacturing is huge, if Algeria can only revive its industrial capacity and improve its overall competitiveness, it will be well on its way.
To do that, however, there needs to be a clear strategy for the direction of the economy. In the recent past, there has been a tendency to start big, and prioritise large and ambitious projects and developments, before subsequently focusing on the growth of smaller actors. That is beginning to change, and decision makers in Algeria are now clearly conscious about the importance of tapping smaller actors.
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