Italian Investments in Algeria Reached €8.6 Billion in 2024

Italy is moving towards expanding its economic presence and investing seriously in the new Algeria by investing in strategic sectors that extend beyond the traditional energy framework, according to Alberto Cutillo, the Italian Ambassador to Algeria.

“Algeria is now seeking partners beyond mere suppliers and is moving towards establishing genuine industrial partnerships”, Cutillo added that Italian small and medium-sized enterprises (SMEs), with their expertise, technology, and capabilities, could be the ideal partners to support this direction.

In an interview with the Italian Ministry of Foreign Affairs’ economic diplomacy magazine, “MARSAD” published in November 2025, the Italian diplomat explained that the partnership between the two countries is no longer limited to hydrocarbons, although these remain a cornerstone of cooperation. It has expanded to include new fields such as phosphates, renewable energy, energy infrastructure, and digitalisation.

The Italian diplomat noted that cooperation in the energy sector is undergoing a qualitative transformation, pointing to pivotal projects under development such as the South2 Corridor project for transporting green hydrogen from North Africa to Europe, the Medlink project for electrical interconnection via a submarine cable, and a new digital interconnection cable project announced by Sparkle and Algeria Telecom.

Ambassador Cutillo emphasised that the Algerian-Italian Economic Forum, held in Rome on July 23rd, resulted in the signing of approximately thirty memoranda of understanding between institutions from both countries, reflecting a shared commitment to strengthening industrial partnerships.

He explained that Algeria’s central objective is to develop local production and improve self-sufficiency levels, stressing that Algeria is now more focused on finding partners to launch local projects than on simply seeking suppliers. Therefore, Italian small and medium-sized enterprises (SMEs), with their experience, capabilities, and technologies, can be the ideal partners to support this process.

Cutillo revealed that the initiatives of the Mattei Plan for the African continent consider Algeria as a model country, primarily based on agricultural development and vocational training. He highlighted a large-scale project to reclaim and cultivate desert land in the south with grains and legumes under the supervision of the Bonifiche Ferraresi company. He also mentioned the launch of a vocational training centre in Sidi Bel Abbès (western Algeria) dedicated to the agriculture and food processing sectors, named after Enrico Mattei, which is intended to become a regional benchmark for the Sahel and Africa.

The ambassador stated that the automotive sector is one of the most important areas transforming Algeria, explaining that the authorities are aiming to increase the local integration rate to 40% within five years. He cited the activity of the Stellantis company, which inaugurated its factory in Tafraoui (western Algeria) with a production target of 90,000 units annually by 2026 and a 35% integration rate.

The diplomat also highlighted the growing opportunities in the iron, steel, and mining sectors, emphasising the increasing demand for modern equipment and technologies for mineral processing and industrial waste recycling. He added that the establishment of an Italian-Algerian training centre for marble and stone was aimed at developing local expertise. He asserted that this project falls within the framework of a policy to transfer knowledge and strengthen industrial capabilities.

Cutillo emphasised that renewable energy is a cornerstone of Algeria’s future vision, explaining that the country possesses one of the world’s largest solar energy potentials and aims to reach a production capacity of 15,000 megawatts by 2035, in addition to investments ranging between $20 and $25 billion in green hydrogen production.

The ambassador explained that approximately 200 Italian companies are currently operating in Algeria, while Italian investments reached €8.6 billion in 2024. He emphasised that recent years have witnessed a significant increase in the interest of Italian companies in the Algerian market.

At the end of his interview, the Italian ambassador spoke about the similarity in the industrial fabric between Algeria and Italy, where small and medium enterprises prevail and are widespread in both countries, forming the backbone of the economy, which is the main economic actor and plays a crucial role in the Algerian landscape.