Angola’s 2GW Connectivity Project MOU Signed

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Angolan engineer ProMarks and Swiss commodity trader Trafigura signed a memorandum of understanding with the Government of Angola to develop a southern African power transmission network. The aim is to install and operateAngolan engineer ProMarks and Swiss commodity trader Trafigura signed a memorandum of understanding with the Government of Angola to develop a Angola’s 2GW Connectivity Project, a high-voltage direct-current line to carry surplus electricity produced by hydroelectric dams in northern Angola to the Copperbelt of the Democratic Republic of Congo (DRC) and Zambia, and to integrate Angola’s grid with the Southern Africa Power Pool (SAPP).

The two will conduct a technical and economic viability study and will propose a public–private partnership model for the project.

ProMarks specialises in energy, distribution networks, high voltage lines and substations.

João Batista Borges, Angola’s energy minister, said the scheme was necessary for regional integration and for the economic and social development of the countries involved.

He said: “Angola, fortunately, has a surplus of energy that it can make available to Zambia and the DRC. The private promoters of the project will ensure its materialisation and enable this interconnection so that together we can contribute unequivocally to the creation of wealth and growth of our economies through the commercialisation of clean energy.”

Trafigura noted in a press statement that the electricity would be purchased from Angola’s National Electricity Transmission Network and sold to customers such as global mining companies in the Copperbelt, as well as other consumers in the DRC and Zambia.

Funding of the Angola’s 2GW Connectivity Project

The joint venture that will finance, build and run the line will be financed through a combination of equity capital and third-party debt. Planning, approvals and construction will take around four years after the final investment decision is made.

Trafigura added that it was part of the consortium building the Lobito Atlantic Railway (see further reading). As such, it was well placed to “work with its existing customer base to conclude long-term energy supply agreements”.

Julien Rolland, head of strategic projects for the Zurich-based company, said: “We see that the demand for power is significantly increasing across the Copperbelt region where mining activities are growing and are being supported by the logistics provided by the Lobito Atlantic Railway.”

Angola’s Energy Ambitions

Angola’s current installed capacity is estimated at 5.7 GW but only 70 percent is in use. The country’s current energy mix consists of 61.8 percent hydropower, 37.6 percent other fossil fuels and 0.6 percent hybrid (solar/fossil fuel). However, the Ministry of Energy and Water (MINEA) expects to reach 6.3 GW of generation capacity once the Soyo combined cycle gas plant (750 MW), and the Laúca hydroelectric project (2.1 GW) come fully online. Several hydro and solar projects are also being developed and expected to come online over the next two to five years. For these and future projects, external financing and private project development will continue to be key, especially given recent government budget restraints and Angola’s recent emergence from the economic downturn.

Current electrification rates are estimated at 43 percent in most cities and less than 10 percent in rural areas. As a result, both businesses and residents rely heavily on diesel generators for power. The government’s announcement to reduce government subsidies and the resulting higher fuel and electricity prices over the coming years are expected to create demand for alternative energy solutions.

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