PSA Group has signed an agreement in Algeria for a production joint venture in which it will invest €100m ($118m) and take a 49% interest.

The agreement was signed as part of the France-Algeria joint economic committee (COMEFA), in the presence of Youcef Yousfi, Algerian minister of industry and mining, and Bruno Le Maire, French minister of the economy, finance and industry.

As part of the project, PSA said it would support the development of Algeria’s automotive industry with an upskilling and training programme for employees, as well as help expand the local supplier base.

The plant will manufacture models to supply the Algerian market. It is expected to be fully operational in 2019, with local operations gradually commencing from 2018.

Jean-Christophe Quémard, executive vice-president, Africa-Middle East at PSA, said: “Algeria is one of Groupe PSA’s historical markets and we are particularly proud to set up a manufacturing base there. The country is at the centre of the Middle East and Africa region, which is a key driver of profitable international growth as part of our ‘Push to Pass’ plan.

“The agreement will allow us to have production capacity in the heart of the region and thereby achieve our goal of selling 700,000 vehicles by 2021."

The local partners involved are Condor Electronics, Palpa Pro and Entreprise Nationale de Production de Machines-Outils (PMO).

In the past year, PSA has announced plans for facilities in a number of markets in the region including Tunisia, Iran and Kenya.