Spain Offers €100 Million to End Dispute with Sonelgaz

The Spanish company Duro Felguera offered to pay approximately €100 million in compensation to resolve the ongoing dispute with the Algerian National Electricity and Gas Company (Sonelgaz) over the stalled Djelfa power plant project (southern Algeria)..

In this context, some Spanish media, including Okdiario, reported, citing sources close to the matter, that this offer came after negotiations in Algeria between representatives of the Spanish company and Sonelgaz officials, which took place last week, specifically on Monday and Tuesday.

As is known, the National Electricity and Gas Company (Sonelgaz) previously demanded compensation of 413 million euros from the Spanish side due to Duro Felguera’s failure to implement the contract to build a 1,200 MW combined-cycle power plant in Djelfa. The Spanish company was awarded the project in 2014 but has suspended it since 2021.

The company’s Mexican president, Eduardo Espinosa, and the Energy and Plants Division general manager, Saul Paunero Asenjo, arrived in Algeria last Sunday (March 9) for the same purpose: negotiating with Sonelgaz. According to the same sources, they met on Monday and Tuesday with Sonelgaz representatives to discuss ways to end the dispute and settle the matter.

According to Okdiario, the Spanish offer is approximately €90 million, an amount the company had previously allocated in its 2024 financial statements to address this dispute.

The Spanish industrial engineering company is facing a critical juncture as the bankruptcy protection period it secured approaches its expiration date due to numerous problems it is grappling with. This coincides with the ongoing round of negotiations regarding its stalled project to build a combined-cycle power plant in Djelfa. This project has emerged as a last chance to pull it back from the brink of bankruptcy.

The Spanish company unilaterally decided last June to suspend work on its project in Djelfa province due to financial difficulties. According to its financial statements, this resulted in losses of €52.4 million during the first half of 2024. This crisis was one of the factors that prompted the company to enter the bankruptcy protection phase in December 2024.