Algeria has become an attractive destination for foreign investment, with several countries, including Germany, showing interest in the country's market. The Algerian market is more appealing than ever, with Germany displaying a strong interest in investing in Algeria, particularly in the energy sector. This development comes as France's presence in Algeria appears to be waning.
The strengthening of Algerian-German partnerships follows a historic state visit by Algerian President Abdelmadjid Tebboune to Berlin in July. During the visit, 31 contracts and memoranda of understanding were signed in various fields, including energy, renewable energy, automotive, pharmaceuticals, and transportation. The two countries have also agreed to open an air route between Algiers and Berlin, which was launched by Air Algérie.
One of the key projects between Algeria and Germany is the SoutH2 Corridor, which aims to transport green hydrogen from Algeria to Germany via Tunisia, Italy, and Austria. The project, which has the support of the European Union, involves the annual shipment of 4 million tons of hydrogen produced in Algeria. The project was discussed at a meeting organized by the Algerian-German Chamber of Commerce in Algiers.
Germany is also interested in Algeria's fossil fuel sector, with Sonatrach and German company VNG signing a contract for the supply of liquefied natural gas and a memorandum to intensify gas negotiations. Additionally, a joint declaration was signed to reduce methane emissions. German company Boehringer Ingelheim has also partnered with Algerian pharmaceutical group Saidal.
The automotive sector is another area where Algeria and Germany are cooperating, with Opel and Algerian group Halil signing an agreement to boost their industrial cooperation. The two partners had previously announced plans to open a large Opel factory in Algeria, which is expected to be the largest production site for the German brand outside of Europe.
The growth of German investments in Algeria comes as French economic presence in the country appears to be declining. In the period from August 2025 to July 2026, economic exchanges between France and Algeria fell to 8.6 billion euros, down from 9.3 billion euros in 2025 and 11.2 billion euros in 2024. Over 600 French companies went bankrupt in Algeria in 2025 due to the crisis between Algiers and Paris.
Algeria's economic diversification efforts and plans to reduce imports from France are expected to further impact French businesses in the country. With the 2027 presidential election approaching, marked by a rise in far-right and anti-Algerian sentiment, 2026 is likely to be a challenging year for French companies in Algeria.
Key points
- Germany and Algeria have signed 31 contracts and memoranda of understanding in various sectors.
- The SoutH2 Corridor project aims to transport green hydrogen from Algeria to Germany.
- French economic presence in Algeria is declining, with over 600 French companies going bankrupt in 2025.
