The energy sector of Angola: Vision, Action Plan and Investment Opportunities AEMP Round 3 25 – 26 June, 2019 1
Section 1 Country Energy Sector Overview 2
Angola believes that access to electricity is key to economic I. growth and country development, benefiting the overall population's standard of living and welfare. Electricity and Income Correlation Angola aims to double its electrification rate until 2025 and equal that of reference countries Electrification rate 100% Latin America and the Caribbean 90% • Middle East and North Africa 1900 KWh per capita • 2600 KWh per capita 80% 70% 60% World : 50% • 2900 KWh per capita Angola 2025 40% Increase electrification to Source: World Bank, 60% 30% 2010 Angola 2010 : 20% Sub-Saharan Africa Legend: • 247 KWh per capita • 552 KWh per capita 10% The diameter indicates average GDP per energy consumption capita ($) per capita 1000 3000 2000 4000 6000 5000 7000 8000 9000 10000 3
Long term Vision & Objectives I. Angola’s strategy to Light up and power Africa by 2025 • • Electrification rate of 50% Electrification rate of 60% • • Up to US$ 3 billion of private investments Up to US$ 9 billion of private Milestones mobilized. investments mobilized. • Restructuring and strengthening power sector operations • Electrification (urban and rural) and grid expansion • Tariff review and economic/financial sustainability • Use of renewable energy Policy • Promotion of private capital and know/how • Increase generation capacity Generation, 2018 – 2022: US$ 13.6 billion budget 2022 – 2025: US$ 23.1 billion budget Transmission & Distribution Installed 7.5 GW Target for 2022 9.9 GW Target for 2025 Capacity Target Transmission & Angola Power Sector Long Term Vision 2025 Distribution Technical Assistance 2018 2019 2020 2021 2022 2023 2024 2025 4
Angola Energy Sector Action Plan I. Key pillars Ensure and Increase Increase the electricity access rate from 30% to 60% Electricity Supply Quadruple generation capacity from current ~2.000 MW to ~9.500 MW in 2025 Extend more than 2.500 km of lines and substations in the transmission grid , and establish international interconnections Rehabilitate distribution networks, adding more than 1,5 million consumers Improve the efficiency of public companies Industry Competitiveness Implement a new market model that allows for cost reductions Develop a new regulatory model encouraging efficiency System Reduce tariff subsidization Sustainability Develop an optimal generation mix , making better use of Angola’s natural resources Develop the capabilities of the local workforce 5
Angola Energy Sector Snapshot I. Potential 1.3 – 2.1 3.7 3.9 18.3 GW GW MWh/m 2 /year GW Total wind energy potential Average solar irradiance Hydro energy to be exploited Biomass and waste potential • 6.7 GW more of hydro are expected by • Angola has a solar potential of 17.3GW • 2025 . 604 MW, or 13 projects , have conditions for This potential for electricity generation is distributed over 368 projects • Angola’s Energy 2025 vision sets a target of quick grid connection . Several of these sites spread over 42 projects 100MW for small hydropower plants. are close to the main network which minimizes • PV systems are the most appropriate • • Planned investments until 2025 will technical restrictions or significant investments. 3.3 GW of projects are forestry related. technology to harness the solar potential. represent only 30% of utilization. Production Key Indicators Peak energy 82 MW 6,400 MW 1650 Households without consumption Total Installed Capacity 3.4 M Of supply is generated by IPPs MW power (reached in 2014) Energy consumption per client (2014) Electricity production by source (2014) Losses 14% Thermal Industry Residential 9% 45% 47% Average consumption Access Rate 36% 15.5% growth rate Hydro Population electrified localities / Total Population (2008-2014) 53% Services 32% 6
Angola Energy Programs, Policy & Reforms I. Country generation programs/Expansion Energy Sector Stakeholders plans • • The Ministry of Energy and Water of Angola (MINEA) More than 6,000 km of very high voltage transmission • IRSEA – Regulator lines and over 40 substations are planned. • PRODEL – Generation Company • Plans exist to link the grids through a north-central • RNT – Transmission Company south backbone and expand the grid from 3,354 km • ENDE – Distribution Company to 16,350 km by 2025 and to connect to the Southern • GAMEK – Project Development Africa Power Pool (SAPP) through Namibia (ANNA) *On a local level, Provincial Governments (18 in total) have their and the Democratic Republic of Congo (Inga). own Directions of Energy and Water Country’s Priorities Energy Policies and Reforms • The Angolan Government has an ambitious Action Plan The AfDB jointly with JICA supported the Government for the period up to 2025 with around US $18 billion with US$ 1.2 billion through its Power Sector Reform worth of investments into renewables underway, and it Support Program to support the energy sector has a long-term vision for the power sector with a clear reforms undertaken by Angola between 2014 and roadmap to provide modern electricity services to 60% of 2017. the population by 2025. • Order no. 11/17: to review and extend the Angola’s National Vision of 2025 to 2050. 7
To successfully achieve the proposed goals in the energy sector a large amount I. of investment is necessary in generation assets and grid infrastructures. Installed capacity Transmission grid # Consumers GW Kilometers Millions 7,000 3.5 12.0 9,9 GW 6,000 3.0 3.2 10.0 6,123 X 4,5 0.75 5,000 2.5 0.85 5,200 8.0 1.60 4,000 2.0 X 3 5,9 GW 6.0 X 1,8 0.75 3,000 1.5 3,354 1.6 1.37 4.0 2,000 1.0 6.70 2,0 GW 0.8 2.0 1,000 0.5 3.73 1.10 0.87 0 0.0 0.0 2013 2019 2025 2013 2019 2025 dez-13 dez-19 dez-25 Other Renewables Combined Cycle A significant investment extending The expected growth in generation is Conventional Thermal Hydro transmission lines to connect the new followed by the extension of the generation and unify the four distribution network and consumer Quadrupling generation capacity is a key transmission systems base pillar for electrification and supply security Sources: Data 2012 – MINEA Expanded Council Board; Financial Reports ENE e EDEL; Estimated data PSEA, 2009, Data 2019 - MINEA 8
Angola is managing large, concurrent infrastructure developments, carefully I. planned to take advantage of Angola's unique national resources – natural gas, hydro, wind and solar CONGO CABINDA SIMPLIFICATION How to take advantage of Angolan North natural resources ZAIRE UIGE System Benefit from the hydro potential of L. NORTE Kwanza river – Laúca and Caculo-Cabaça East K. NORTE MALANJE System LUANDA SE. Capanda elevadora SE. Cambambe* Install combined cycle gas turbines, BENGO L. SUL partnering with Sonangol/ Angola LNG K. SUL Center System MOXICO National integration of transmission BENGUELA systems HUAMBO International interconnection with HUILA Namibia and Congo South K. KUBANGO Rural electrification with distributed System NAMIBE renewables sources CUNENE Grid connections until 2025 NAMIBIA 9
The Electricity Sector Transformation Program (PTSE) sought to improve I. efficiency by unbundling activities and a new market regulation that allows private participation. Market and Regulation Models Public Companies Restructuring Allow Private Generation Until 2015 Current Status Value Chain Establish a Single Buyer to purchase all energy generated Private Private Generation Power Purchase Agreements Investors Generation Investors National Company negotiated by Single Buyers with generation companies Transmission Transmission National Company Incentives and liberalization in generation and distribution, Distribution with private players and Munici- Private Customer palities Distribution Concessions Operations Tariff model design to promote National Company energy efficiency to project I R S E A Regulator poorer consumers Institiuto Regulador dos Serviços de Electricidade e de Água Engineering Office Engineering Develop service quality (for strategic projects) improvement 10
Section 2 Investment Opportunities 11
Project #1: Hydroelectric Power Plant – CHICAPA II II. IMPACT 1.25 31.2 20,800 CO 2 kton/yr Households Emissions MW Electrified Savings Deal Snapshot • Financing the construction and operation of the Hydroelectric Power Plant of Chicapa II, in Lunda Sul, which will increase the energy generation of Chicapa I, from 86.9 Chicapa River in Lunda Sul GWh/year to 135 GWh/year and improve the power supply to Saurimo, a growing city, to local mining industries as well as support the expansion of the transport network in the Eastern Region. • Indicative Investment Amount: USD 180 million Alignment with Action Plan • Expansion on Electricity Access on urban areas, capitals of Municipalities and rural areas; • Construction of the new water supply system from the river Chicapa, one of the weaker provinces in access to drinking water; Chicapa I in Lunda Sul 12
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