Angola needs to increase power to diversify economy

Angola parliament

from PEDRO AGOSTO in Luanda, Angola
LUANDA, (CAJ News) – ANGOLA must in the next five years ramp up its power transmission and distribution capacities if it is to attain its goal of industrialising and overcoming its over-reliance on an oil sector that is experiencing turbulence globally.

This requires increased collaboration between the public and private sectors to drive the Angola Energy 2025 agenda of the government of President Joao Lourenco.

Demand for electricity is projected to grow at an exponential rate until 2025 with the overall system overload peaking at 7 200MW.

This is more than four times the current levels as Southern Africa’s largest oil producer- and the continent’s second-largest after Nigeria- industrialises.

As Angola moves away from an over-dependence of crude oil, energy-intensive activities such as mining will result in rising demand.

“You cannot expand the industrialisation of the country without secure power throughout,” said Maria da Cruz, President and Chief Executive Officer of the United States- Angola Chamber of Commerce.

In light of this, the government plans to invest some US$23 billion as part of the Angola 2025 strategy.

“It (government) is going to need support from the private sector,” da Cruz said.

Da Cruz was speaking at a just-concluded webinar, held to assess how Angola can continue to prioritise its development of national transmission and distribution capacities in the long-term.

This is with a view toward increasing electrification, job creation and economic growth.

The Angola Energy 2025 vision aligns with the National Development Plan 2018-2022.

It focuses on creating increased capacity and distribution capabilities, supported by new renewables and private sector investment.

Paul Ghiotto, Deputy Political-Economic Chief/Energy Officer Political-Economic Section at the US Embassy Luanda, noted over the past decade, the Angolan government had channeled significant resources into improving access to affordable and reliable power for both urban and rural communities.

The development of hydro-power in the Kwanza river basin is hailed as providing a strong base of generation sufficient to meet future demand.

“There are also additional opportunities in generation. I would argue in gas-to-power, and particularly renewables in the solar sector,” Ghiotto said.

Angola is, in addition to government funding, eager to attract private sector investment into its lucrative power projects, mostly in distribution to end-users.

Frederico Martins Correia, Energy, Resources and Industrials Partner at Deloitte, said the government had improved regulations so that the private sector can invest in the sector.

“In terms of distribution, it is quite easy to create a company and be a player, and the government is very keen to create distribution companies locally,” Correira stated.

The government’s view is to keep transmission as a state-owned segment.

The waning oil industry as a result of the coronavirus (COVID-19) pandemic has made it more imperative than ever for Angola to diversify its economy.

Like many oil-producing African countries, Angola remains reliant on crude oil exports to make up the majority of government revenues.

The industry contributes 90 percent of Angola’s total export revenues.

Angola’s oil exports are projected to decline to 1,18 million barrels per day.

This is down from levels of three years ago when it was exporting 1,7 million barrels per day.

– CAJ News

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