$18 million World Bank loan was meant to divide Sonelgaz and Sonatrach

World Bank loan to Algeria in the preparation of hydrocarbons law which President Abdelaziz Bouteflika rejected its orginla copy was meant to privatise electricity and hydrocarbons sector.

• The Bank’s report No 258228 said the $18 million loan aims at opening the door to national and foreign private investment in energy sector.
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• It tried to hide the privatisation processes but Bouteflika made changes to the hydrocarbons law in an unexpected step.
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• The Bank was trying to speed up the privatisation of hydrocarbons sector, Sonatrach and Sonelgaz by transferring energy-related activities. This attempt is not in conformity with the presidential decree No 105-95 about maintaining the country’s energy strategic reserves.
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• The Bank tried to take advantage as much as possible from the clear contradiction and the intentioned amalgam in the ordinances No 03-01 on investment and No 04-01 on privatisation.
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• Article No 15 of the privatisation-related ordinance stipulates that all economic public corporations can be privatised. That means Sonatrach and Sonelgaz are included in them. The second article of the investment-related ordinance defines investment as privatisation processes and not new investments in various sectors.
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• Law No 01-02 on electricity and gas distribution came to concretise the privatisation of Sonelgaz and divide it into independent units. The company was divided into 39 subsidies.
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• Article No 61 of the same text says electricity and gas markets are opened in a three-year deadline after the promulgation of this law. That speeds up the privatisation of Sonelgaz.