Financing of Agriculture

In 2012, a team of scientists made a startling announcement:

“The greatest engineering project in Africa since the pyramids.”

Beneath the Sahara Desert, the driest place on Earth, was an underground freshwater ocean nearly one-quarter the volume of the Mediterranean Sea.

Algeria, a nation that is 80% desert, sits above an estimated 22,000 cubic miles of that water — four times the U.S.’s Great Lakes combined.

Now, Algeria has made it a national priority to extract some of this water and reclaim as much as 150,000 square miles of desert as arable farmland and developed residential land — creating entirely new, modern, verdant cities inside in the desert.

This Project is THE Top Priority of the Algerian Government

Algeria faces four issues that threaten its future, and it sees this multi-generational project as a solution to all of them.

Food Insecurity:

Algeria annually imports 75% of its food calories, at a cost of $8+ billion/year, and 95% of its seeds at a cost of $1 billion/year.

Solution: The project will create a state-of-the-art agriculture industry in the desert that will feed Algeria.

High Unemployment:

Algerian unemployment is 10%+ overall and 25%+ for citizens under 30 years old.

Solution: Over time, this project will create millions of jobs.

Urban Overcrowding:

Over-migration into Algeria’s few coastal cities is creating dangerous overcrowding, crime, and pollution.

One-Dimensional Economy:

Petroleum accounts for 80% of exports and 60% of government revenue, and Algeria’s petroleum reserves are running out.

Solution: The project will create a state-of-the-art agriculture industry, one that will not only seed and feed Algeria, but will also provide produce and seeds for neighboring nations.

SONATRACH & SONATRACH AAA

The Algerian government has invited SONATRACH — its national petroleum company and the largest company in all of Africa – to help realize this project. SONATRACH, in turn, has tasked its wholly-owned agricultural subsidiary, SONATRACH Agro-Alimentaire (“AAA”), with overseeing and executing the project.

SONATRACH is Algeria’s state-owned oil company and the largest company in all of Africa. It is the 12th largest oil consortium in the world, owns 80% of Algeria’s total hydrocarbon production, and employs 120,000 workers.

In 2021, it posted a net revenue of USD $33 billion.

SONATRACH Agro-Alimentaire (“AAA”) is an agricultural farming and producing company based in Algeria and constituted under Algerian commercial law. It is 100% owned by SONATRACH.

The Company’s goal is to become in the leading agricultural producer in all of Africa. It practices modern, technology-supported agriculture, eliminating traditional practices that are unprofitable and subject to climate risks.

Desert Bloom

Stage One of this transformative, multi-generational project has two interconnected initiatives that will launch simultaneously:

-The planting of 75,000 acres of palm groves in southern Algeria as a pilot program to be duplicated throughout the Algerian Sahara
-The erecting of specialized, high-tech, automated greenhouses in the Sahara for the micro-propagation of plant tissue and the hydroponic growing and multiplication of several varieties of seeds, both for Algerian use and for export throughout Africa.

Palm Groves

SONATRACH AAA will plant 75,000 acres of palm groves in the Sahara. Besides generating long-term revenue via the production of high value dates, these trees also create the farming environment necessary to grow other agricultural products. If this initial planting proves as productive as projected, SONATRACH AAA will replicate it in at least another 10 to 20 or more sites — a potential total 1,500,000+ acres of farmland.

The agricultural objective for the first grove of 75,000 acres is to plant five million palm trees and, conservatively, 25,000 acres of alfalfa and 25,000 acres of industrial potatoes.

The social objective is to create vast numbers of quality jobs in the newly reclaimed desert areas as more groves are planted and the local residential and commercial infrastructures are created to support these workers and their families

Financially, this initial grove is projected to generate an internal rate of return exceeding 50% beginning in its fifth year of operation and will grow more profitable each year thereafter.

Specialized, High-Tech, Automated Greenhouses

SONATRACH AAA will erect specialized, high-tech, automated greenhouses in the Sahara for micropropagation of plant tissue and the hydroponic growing and multiplication of several
varieties of seeds, both for Algerian use and for export.

AAA will deploy a world class in-vitro lab which will produce more than 20 million seedlings; it will also deploy 150 acres of state-of-the-art automated greenhouses yielding a variety of selected seeds that will be chosen for their strategic importance to Algeria’s seed security.

AAA believes it can become Africa’s leading seed producer, multiplier, and distributor, capturing a 40% market share. By strategically locating the greenhouses and palm groves, AAA will create agricultural market hubs for neighboring countries, such as Niger, Nigeria, Burkina Faso. Nigeria, in particular, is an enormous potential trading partner.

Creating Modern Cities in the Desert

We have engaged world-famous, highly-respected design, engineering, and city planning firm, Sasaki (sasaki.com), to devise an approach to creating 21st century cities in the Sahara to support the agricultural industry and associated infrastructure being created in several locations.

Market: Large & Growing Larger

The market is large and growing. The Algerian seed market alone represents USD $1 billion in annual sales, with 95% of that going to foreign sellers, something the government is determined to change. As for food, Algeria imports 75% of its food calories, spending more than $8 billion/year in food and agricultural commodities.

The opportunities become very interesting, very quickly.

Business Model

AAA’s initial business model will be 100% wholesale, selling its produce to the largest retailers’ customers in Algeria as well as some in neighboring nations. Its largest customer, at least in its early years, will be SONATRACH and its 200 subsidiary companies, and the Algerian government itself.

Team

Investment Opportunity

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.

Value Proposition

Project will transform the landscape of Africa and the lives of hundreds of millions
A top national priority of Africa’s largest nation
A personal priority of Algerian President Abdelmadjid Tebboune
Partners will be SONATRACH AAA and SONATRACH, Africa’s largest company
All loans 100% guaranteed by SONATRACH
Market need is enormous and, in part, captive
Projected profits are large, ongoing, and ever-increasing