Why it Matters
The MCDF grant is a project-preparation step rather than a construction award, but it is significant because it supports the technical work required to move Algeria’s Central Corridor Railway Project towards bankability. The planned 495km section between Laghouat, Ghardaïa and El Meniaa forms part of a broader north-south railway development aimed at improving freight, passenger transport and rail-road-port integration.
For the wider region, the project is positioned as groundwork for a future Trans-Saharan Railway extension towards Tamanrasset, Niger and the Sahel. If advanced, the corridor could strengthen agricultural and mining trade flows, reduce logistics costs and improve access to Algeria’s Mediterranean ports.
The first phase of Algeria’s planned Trans-Saharan Railway development has received grant support from the Multilateral Cooperation Center for Development Finance (MCDF), marking an early project-preparation step for a north-south rail corridor intended to strengthen regional connectivity, trade and logistics integration.
A USD630,000 grant was approved by the MCDF Governing Committee during its meeting in Beijing on 10 June. The grant was requested by the Asian Infrastructure Investment Bank (AIIB) and will support the preparation of the Algeria Central Corridor Railway Project.
The proposed investment covers the construction of approximately 495 kilometres of north-south railway infrastructure between the oasis towns of Laghouat, Ghardaïa and El Meniaa in central Algeria. The project is aimed at improving Algeria’s rail-based passenger and freight transport, reducing logistics costs and strengthening rail-road-port integration.
The grant will finance a technical study for the project, with a particular focus on the railway’s operating environment through the Sahara Desert. According to the release, MCDF support will be used to optimise wind and sand hazard mitigation measures for railway infrastructure traversing desert terrain. The objective is to improve reliability and operational sustainability by reducing maintenance requirements and lifecycle costs.
The grant will also support technical reviews by an international panel of experts, helping to incorporate international financial institution standards and good practice into the project’s preparation.
The Algeria Central Corridor Railway Project is intended to lay the groundwork for the longer-term Trans-Saharan Railway extension towards Tamanrasset in southern Algeria, Niger and the wider Sahel region. The corridor is expected to support cross-border agricultural and mining trade, while improving supply chain logistics and access to international trade routes through Algeria’s Mediterranean ports.
The preparation work is also linked to the project’s future financing structure. MCDF grant-supported activities are expected to help ensure that the project is bankable and able to meet the requirements for an estimated USD3.2 billion in potential financing. The financing is expected to be co-financed by the African Development Bank, AIIB and the Government of Algeria.
For Algeria and the wider region, the project sits within a broader corridor-development context, where rail investment is being positioned not only as domestic transport infrastructure, but as a platform for cross-border trade, mineral and agricultural logistics, port access and regional integration.
