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TematicheItalia ed EuropaThe new German and Italian interests in Algeria

The new German and Italian interests in Algeria


Since the war in Ukraine started, the energy crisis has been the most crucial challenge for the EU. The member states work together and separately on solutions for an alternative to Russian gas. Algeria appears attractive to the EU policy, precisely the new German and Italian foreign/energy policy in this historical context. The question is what the role of North Africa and Algeria for Germany, Italy, and the entire EU could be. Furthermore, Algeria, as a Maghreb country, a Mediterranean country of moderate Islam with a secular government, seems vital for Africa’s stability. 

Algeria as a regional power in North Africa

Territorially, Algeria is OPEC’s largest member country and the greatest country in Africa (almost 45 million inhabitants), with a growing young population. Besides, Algeria’s military is one of the biggest in Africa and has the most significant defence budget. Also, it has one of the largest economies on the continent, based mainly on energy exports (oil and gas).

At the beginning of 2023, 85% of total Algerian gas exportation goes to Europe, in the first place, to Italy. Moreover, the World Bank Group ranks Algeria as the first country in Africa for its potential for wind power, defined as ’’world-class wind potential’’. Additionally, Algeria has vast oil and natural gas reserves; Sonatrach, the national oil company, the major company in Africa, supplies ample natural gas to Europe; the Hassi R’Mel gas plant, located in the desert, is one of the largest in Africa. 

In 2021, Algeria was a critical energy partner for the EU; it was the third foremost natural gas supplier after Russia and Norway. Then, due to the new geopolitical relations, in January 2023, Algeria surpassed Russia and became the second enormous gas exporter to the EU after Norway. Thus, huge oil and gas reserves make the Western Mediterranean country an attractive object of analysis for the EU decision-makers and possible long-term agreements. 

This February, the First Vice President of the European Commission and EU climate chief, Timmermans, defined Africa as likely the EU’s most important renewable energy partner in the future, as this continent has a high potential for renewable energy production, in particular solar power. He underlined especially the role of the Mediterranean and North African countries, stressing the EU-Africa energy partnership. Specifically, in 2021, the EU announced the new Global Gateway strategy to counter China’s New Silk Road plan, using its financial and diplomatic tools to ensure energy cooperation with Africa.

German energy interests in Algeria

After the war outbreak in Ukraine, Germany, like Italy, started to think urgently about gas diversification. The German group Siemens Energy was especially alarmed in July 2022 when Russian Gazprom significantly cut gas deliveries via Nord Stream 1 under the Baltic Sea to about 20 percent of the pipeline’s capacity.  Disgruntled Germany rebuked Russian actions and removed to consider deeper energy cooperation among others, also with Algeria, to mitigate and surmount the effects of the energy crises. 

Likewise, Chancellor Scholz previously described the new international context as Zeitenwende (“historical turning point”). As a result, Germany suspended the certification of the Nord Stream 2 pipeline, which was supposed to increase Russian gas supplies to Europe significantly. Hence, after cleavages with Russia, the revolutionary transformation of Germany’s energy policy should be analysed as the Zeitenwende process in the security strategy.

Regarding recent energy issues, Germany’s Vice Chancellor and Minister of Economics and Climate action, Habeck, has announced a visit to Algeria in the spring of 2023, seeking new non-Russian energy sources. In August 2022, Chancellor Scholz supported the construction of the Iberian pipeline by 2025. Namely, he suggested getting gas to flow from Algeria to central and northern Europe via the Iberian Peninsula. It means the revitalization of a project begun in 2003 but never completed; in previous years has failed due to the high costs involved. The project should include Algeria, Spain, Portugal, France, and the European Commission. 

Two months before Scholz’s statement, in June 2022, in an interview with Spiegel, Arkab, Algeria’s energy minister, said Europe and Germany must first invest in Algeria to develop new gas fields jointly. Then, in August 2022, German Foreign Minister Baerbock and her Algerian counterpart Lamamra agreed there was political will on both sides to strengthen further bilateral relations.

Nowadays, the German development agency – Geselschaft für Internationale Zusammenarbeit investigates the Algerian green hydrogen potential, which is part of the German-Algerian Energy Partnership. In 2021, GIZ made a study on the potential of Power to X technologies in Algeria by 2050 that revealed the country could make much electricity from the solar energy needed to produce green hydrogen. 

Italian diplomatic offensive in Algeria

This year, the Italian Prime Minister, Meloni, visited Algeria in January. She met with the President of Algeria, Tebboune, and Prime Minister, Benabderrahmane. Italy (Eni) and Algeria (Sonatrach) signed important energy agreements.

Meloni underscored that this was the first mission of the new Italian government in North Africa to reinforce the economic, energy, political, and cultural cooperation in the Mediterranean; according to the prime minister, it means how much Algeria is a reliable, fundamental, and strategic partner. The Italian goal will be to reconnect the southern shore with the northern shore of the Mediterranean. In addition, Meloni mentioned the Piano Mattei for Africa -’’the model of equal cooperation’’, the model of development and cooperation, especially in the energy field.

The following month Italy repeated the intentions to cooperate with Africa on energy supplies using the EU funds under the REPowerEU plan (€300 billion) to avoid Russian gas altogether and build an energy hub for the entire EU. Some funds (about €225 billion) will also be available from the NextGenerationEU pandemic recovery plan launched in 2021. Namely, the goal is to build SoutH2 Corridor, a link to bring hydrogen produced in northern Africa and arriving in northern Europe. The talks between Rome and Brussels regarding the EU funds for the energy hub should be completed by the end of April 2023.

In the summer of 2022, only a few months after the outbreak of war in Ukraine, Algeria became the biggest Italian gas supplier; the Algerian Sonatrach confirmed the release of four billion m3 of gas to Italy. Visiting Algiers in July, the Italian Prime Minister, Draghi, announced that this Mediterranean country would accelerate on gas supplies and confirmed a privileged partnership in the energy sector.

Indeed, the Italian advantage may be its geographical closeness to the western Mediterranean and Algeria and long-lived partnership; the two countries, back in 1982 in Rome, signed an agreement on supplying Algerian gas to Italy. Then, in 2007 with an agreement relating to a gas pipeline between Algeria and Italy through Sardinia, the Italian (Porto Botte) and Algerian (El Kala) coasts were connected by an undersea pipeline.In the last two years, Algeria was dominantly in Italian and German diplomatic focus. Arguably, national governments within the self-help system are central actors driven by energy security national interests in a war context; their radical change in energy policy results from bargaining power and quid pro quo politics (gas for investments). Therefore, Scholz and Meloni seek cooperation with the EU, presenting their national energy policy/security interests as a common European strategy.

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