Algiers - A German construction company has secured the contract to build the world's third-largest mosque in Algiers, during a two-day visit to the Algerian capital by Chancellor Angela Merkel, it was announced Thursday.

German architects Engel and Zimmermann, together with construction engineers Krebs and Kiefer, are to build the mosque to hold 40,000 faithful over the next four years.

Other members of the large business delegation travelling with the chancellor on her first visit to the country expressed confidence that other major deals would soon be signed.

Among the contracts under consideration is the delivery of four German-built frigates to the Algerian navy at a cost of some 5 billion euros (8 billion dollars).

Merkel put business interests at the focus of the visit to Algeria, which is the third-largest provider of natural gas to European markets.

Mutual trade between Germany and Algeria was running at 1.2 billion euros in 2007. "We can increase this and want to do so," Merkel said.

Engel and Zimmermann were announced the winners of the mosque contract last year. Partner Juergen Engel said in Algiers that actually signing the contract was the big moment, however.

The mosque, with its minaret soaring to 214 metres, is budgeted to cost around a billion euros.

Ekkehard Schulz, board chairman of steelmaker ThyssenKrupp, predicted a rise in mutual trade, with North Africa becoming an increasingly important region for Germany.

ThyssenKrupp, in alliance with other companies, was working on building one of the world's largest fertilizer plants in Algeria, he said.

German energy companies E. ON and RWE are interested in oil and gas contracts, and there are plans for a combined gas and solar energy electricity generation plant. Germany is among world leaders in solar technology.

On Wednesday Merkel met President Abdel-Aziz Bouteflika and his ministers.

The visit came just three days after the launch in Paris of the Union for the Mediterranean, a programme to bind the nations of Europe and North Africa that was devised by French President Nicolas Sarkozy. (dpa)