(Ecofin Agency) - The Algerian national group of port services and two Chinese firms signed on January 17, in Alger, a loan agreement worth $3.3 billion for the construction of a commercial port at El Hamdania, in the Cherchell region (about 50 km West of Alger).

According to the terms of the agreement, the port will be built by an Algerian consortium comprised of public group for port services, China state construction Corporation (CSCEC) and China Harbour Engineering Company (CHEC).

The mixed association of comapnies, which will be established on a 51-49% interest basis in respect to the Algerian legislation on investment, will take care of preliminary studies, construction, operation and management of the infrastructure, Algeria’s press agency APS revealed quoting minister of transport, Boudjema Talai.

The El Hamdania port which should be completed by 2023 will be operated by Chinese firm Shangai Ports.

With a 20m draught (vertical distance between waterline and keel), this deep water port will not only serve local commerce via sea but will also be a hub for regional trade. Mr talai indeed said the port would connect Algeria to South East Asia, but also Africa to both Americas.

Connected to roads and railways, the port is to have 23 docks and a processing capacity of 6.5 million containers and 25.7 million tons/year of freight. Moreover, with the the establishment of two sites that make total of 2,000ha dedicated to industrial projects, this port is to truly become a development hub.