Angola to Raise Power Output Fivefold to Attract Investors

Angola, Africa’s largest crude oil producer after Nigeria, plans to build hydroelectric plants to boost power generation fivefold in a bid to attract investment in other industries to the country.

The goal is to have an installed capacity of 9,000 megawatts of generation capacity by 2025 compared with about 1,800 megawatts now, Jose Salgueiro, director of studies, planning and statistics at the Ministry of Energy and Water, said in an Oct. 2 interview.

“Everything is planned to have the electricity there because it’s the main way to say Angola is open for business,” he said in Luanda, the capital. “The promise of more power will attract more investment.”

The southwest African country of 21 million people plans to build about 15 plants with the help of companies such as Brazil’s Odebrecht SA and Xinjiang TBEA Group Co. of China as it seeks to almost double non-oil foreign investment to $4 billion a year by 2017. Angola suffers daily power outages as it recovers from a 27-year civil war in which homes, dams, plants and power lines were destroyed and an estimated 800,000 people were killed, according to the University of MassachusettsPolitical Economy Research Institute.

The government wants to diversify its economy, which the International Monetary Fund expects to expand by 6.2 percent this year, away from the petroleum spending that accounts for 97 percent of exports and 75 percent of taxes. Angola pumped about 1.74 million barrels of oil a day in September, according to data compiled by Bloomberg. The kwanza appreciated 0.3 percent to 97.47 per dollar by 2:22 p.m. in Luanda, paring the decline this year to 1.7 percent.

Power Access

The state wants to double the number of people with access to electricity to 60 percent in 12 years, ministry documents show. Citizens and businesses use diesel generators to maintain supply. One megawatt is enough to supply 2,000 average European homes.

The largest network so far approved will be four power plants southeast of Luanda along the Kwanza River, including the $3.9 billion Lauca dam with capacity of 400 megawatts by 2017, Salgueiro said. It will use equipment made by Spain’s Elecnor SA (ENO) and Germany’s Voith GmbH, ramping up to 2,069 megawatts of capacity eight years later, he said.

The $1.5 billion Cambambe 2 project will have 380 megawatts of capacity by 2015 and increase to 780 megawatts two years later. It joins Cambambe 1, which began in 1960, has 180 megawatts of capacity and will increase to 240 megawatts after a project to add 30 meters (98 feet) of height to the dam is completed in 2015, Salgueiro said.

Capanda Plant

The 2,047-megawatt Caculo Cabaca project may be started next year and completed within six years, while the Capanda plant on the same river, managed by state-owned Gabinete de Aproveitamento do Medio Kwanza, or Gamek, continues to have capacity for 520 megawatts, Salgueiro said.

The government’s most ambitious project is being studied for the Queve, Longa and Ngunza rivers further south to produce 774 megawatts by 2018 and rise to 6,284 megawatts in the decade following that, Salgueiro said.

A plan to increase capacity from Catumbela in Benguela province to 2,000 megawatts from 90 megawatts depends on the approval of a dam at Cacombo, he said.

A natural-gas power plant at Soyo near the mouth of the Congo River will use four turbines to have capacity of almost 500 megawatts by 2015 in a $1.6 billion project, including 300 kilometers (186 miles) of transmission lines to Luanda, he said. Capacity may rise to 1,700 megawatts in the next decade, he said.

Namibia Partnership

Angola is splitting costs and output with Namibia in building several power and water projects along the Cunene River that forms part of the border between the countries, he said.

The Jama ya Omo and Jama ya Mina projects, estimated to cost $500 million for 78 megawatts and $800 million for 227 megawatts, respectively, are expected to be approved in the 2014 state budget, Salgueiro said. A 100-megawatt wind-power project at Tombwa is also being considered and contracts have yet to be awarded, he said.

Two new water projects are also awaiting approval for Luanda, he said. The six-contract, $622 million Quilonga Grande will supply the city’s north from the Kwanza River and the 7-contract, $538 million Bita project will deliver to its south. Each will take three years to build, Salgueiro said.

The state plans to reorganize its three overlapping electricity companies along separate production, transmission and distribution mandates by early next year, he said. Along with Gamek, the state owns power distributor Empresa de Distribuicao de Electricidade EP, or EDEL, and Empresa Nacional de Electricidade EP, known as ENE.

Goals include increasing electricity usage to 15 percent of all energy by 2025 from 3 percent now, raising oil and gas to 55 percent from 33 percent and cutting wood burning to 30 percent from 64 percent, ministry documents show.

To contact the reporter on this story: Colin McClelland in Luanda at cmcclelland1@bloomberg.net

To contact the editor responsible for this story: Antony Sguazzin at asguazzin@bloomberg.net

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.