“The most significant engineering endeavor in Africa since the construction of the pyramids.”
Underneath the Sahara Desert, the driest location on Earth, lies an underground reservoir of freshwater almost one-quarter the size of the Mediterranean Sea.
Algeria, a country that is 80% desert, sits atop an estimated 22,000 cubic miles of this water — four times the combined volume of the Great Lakes in the United States.
Now, Algeria has prioritized extracting some of this water as a national agenda, aiming to reclaim up to 150,000 square miles of desert for agricultural and residential development. This initiative envisions creating entirely new, modern, green cities within the desert.
Algeria confronts four challenges jeopardizing its future, and it views this multi-generational project as the solution to all of them.
Algeria imports 75% of its food calories annually, amounting to over $8 billion per year, and 95% of its seeds, costing approximately $1 billion per year.
Solution: The project aims to establish a cutting-edge agriculture industry in the desert to fulfill Algeria’s food needs domestically.
Algeria’s unemployment rate exceeds 10% overall and rises to over 25% for citizens under 30 years old.
Solution: In the long term, this project will generate millions of jobs.
The influx of migrants into Algeria’s limited coastal cities is resulting in hazardous overcrowding, increased crime, and pollution.
The surge of migrants into Algeria’s coastal cities is leading to dangerous overcrowding, rising crime rates, and heightened pollution levels.
Petroleum comprises 80% of exports and contributes 60% of government revenue in Algeria, yet the country’s petroleum reserves are dwindling.
Solution: The project aims to establish a cutting-edge agriculture industry, which will not only sustain Algeria’s food supply but also produce and supply crops and seeds to neighboring countries.
SONATRACH, Algeria’s state-owned oil company, is the largest firm in Africa and ranks 12th globally among oil consortiums. It controls 80% of Algeria’s hydrocarbon production and employs 120,000 workers. In 2021, it reported a net revenue of USD $33 billion.
SONATRACH Agro-Alimentaire (“AAA”) is an agricultural company based in Algeria, operating under Algerian commercial law and fully owned by SONATRACH. The company aims to become a leading agricultural producer in Africa. It adopts modern, technology-driven farming methods, eliminating traditional practices vulnerable to climate risks and unprofitable outcomes.
The Algerian government has called upon SONATRACH, its national oil company and the largest firm in Africa, to collaborate on this project. In response, SONATRACH has assigned its wholly-owned agricultural subsidiary, SONATRACH Agro-Alimentaire (“AAA”), to manage and implement the project.
The initial phase of this transformative, multi-generational project consists of two interconnected initiatives that will begin simultaneously:
SONATRACH AAA plans to plant 75,000 acres of palm groves in the Sahara. Apart from yielding valuable dates for long-term revenue, these trees will also foster the agricultural conditions needed to cultivate other crops. If the initial planting demonstrates the expected productivity, SONATRACH AAA will replicate it in at least another 10 to 20 sites or more, potentially totaling over 1,500,000 acres of farmland.
The agricultural goal for the initial 75,000-acre grove is to plant five million palm trees, along with 25,000 acres each of alfalfa and industrial potatoes.
Simultaneously, the aim is to generate significant employment opportunities in the newly reclaimed desert regions as additional groves are established, supported by the development of local residential and commercial infrastructure for the workers and their families.
Financially, this first grove is expected to yield an internal rate of return surpassing 50% starting from its fifth year of operation, with increasing profitability in the subsequent years.
SONATRACH AAA will construct specialized, cutting-edge automated greenhouses in the Sahara for micropropagation of plant tissue and hydroponic cultivation and multiplication of various seed varieties, catering to both Algerian domestic needs and export markets.
AAA will establish a world-class in-vitro lab capable of producing over 20 million seedlings. Additionally, it will set up 150 acres of advanced automated greenhouses to cultivate selected seeds strategically chosen for their importance in ensuring Algeria’s seed security.
AAA aims to become Africa’s foremost seed producer, multiplier, and distributor, targeting a 40% market share. By strategically siting the greenhouses and palm groves, AAA will establish agricultural market hubs for neighboring countries like Niger, Nigeria, and Burkina Faso. Nigeria, in particular, represents a significant potential trading partner.
We have enlisted the renowned design, engineering, and city planning firm, Sasaki (sasaki.com), to develop a strategy for building 21st-century cities in the Sahara. These cities will support the agricultural industry and associated infrastructure being developed across multiple locations.
The market is substantial and expanding. The Algerian seed market alone accounts for USD $1 billion in annual sales, with 95% of that revenue flowing to foreign suppliers, a trend the government aims to reverse. Additionally, Algeria imports 75% of its food calories, amounting to over $8 billion per year in food and agricultural commodities.
These opportunities become increasingly intriguing in a short span of time.
AAA’s initial business model will focus entirely on wholesale operations, supplying its produce to major retailers’ customers in Algeria and some in neighboring countries. Its primary customer, particularly in the early stages, will be SONATRACH and its 200 subsidiary companies, along with the Algerian government.
CEO of SONATRACH, has been Chairman and CEO since February of 2020. He was named by Forbes magazine in its 2021 ranking as one of the most influential CEOs in the Middle East and North Africa region. During his 27 years at the SONATRACH, he has held various senior positions, including Executive Director of Strategy, Planning and Economics and Vice President Business Development and Marketing.
Executive Finance and Accounting Director of Agro-Alimentaire is a Senior Manager within the General Management of SONATRACH, and Project Manager Level II, in charge of performance within the Corporate Affairs Department.
(Vice President) As a seasoned professional with nearly 19 years of experience in Planning and Project Controls, I have an outstanding track record of successfully managing Gigascale Renewable Energy projects.
(CEO of Joint Venture Partner, Syn Energy), with over 30 years of business experience, is an innovator and leader in the business world. He has started, acquired, and built companies with aggregate revenues over a billion dollars. Mr. Gulati’s business acumen is always in demand -- he serves as Senior Advisor to several venture capital funds including Hudson Venture Partners, Blue Water Capital Partners, Crossbow Venture Partners, and Delta Venture Partners.
Agro-Alimentaire seeks $2.5 billion in debt or equity financing.
All debt funding will be fully guaranteed by SONATRACH, AAA’s parent, which has
annual revenues of USD $33 billion and produces one-third of Algeria’s GNP.
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