AfDB funds US$530mn electricity project in Angola

AfDB Angola March 21The African Development Bank (AfDB) has committed US$530mn for the construction of a 343km and 400 kV central-south transmission line that will connect the north and south transmission grids in Angola

The north of Angola has a surplus of more than 1,000MW of mostly renewable power, whereas the south relies on expensive diesel generators, supported by government subsidies.

Transmission capacity will increase by 2,250MW and eliminate the need for polluting, diesel-powered generators in southern provinces. The project, once operational in 2023, will avert the consumption of 46.8 billion litres of diesel per year in the south, cutting 80 Megatonnes of CO2 emissions. The government of Angola will save more than US$130mn per year in diesel subsidies.

The finance package, approved in December 2019 by the board of directors of the AfDB, consists of US$480mn in financing from the Bank, along with US$50mn from the Africa Growing Together Fund, a US$2bn facility sponsored by the People’s Bank of China and administered by the AfDB.

The funding covers the first phase of the Energy Sector Efficiency and Expansion Programme (ESEEP) in Angola, which will assist the government to connect the country’s transmission grids and tackle limited operational capacity within the Angolan power distribution utility ENDE.

According to AfDB, the new transmission line will become the backbone for the power distribution to the southern provinces of Angola and Namibia and will enable further power trading between countries in the region.

Boosting Angola’s energy sector

The funding follows two other recent Bank contributions to Angola’s energy sector strategy. In 2015, the Bank approved a US$1bn power sector reform loan for Angola, which resulted in the creation of an independent regulator and the unbundling of the sector into generation, transmission and distribution companies. The programme encourages ownership of the reforms by the Government, and enhanced donor coordination, through project implementation and procurement support for the power utilities, provided in cooperation with Power Africa/USAID.

Angola has significantly improved capacity, operational efficiency, and sustainability of the electricity sector. In the period 2015-2019, Angola’s total installed capacity in renewable energy rose from 1,017MW to 2,763MW, mainly through the improved exploitation of the country’s abundant hydropower.

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