 Energy and construction |
 making Angola the power house of southern Africa |
Like in many African countries, power cuts are a regular occurrence in Angola. That comes as no surprise considering only three out Angola's six power stations are still operational. The country's 500MW generating capacity and the existing transmission and distribution network are inadequate to cope with rising demand. But after years of wars and decay there are signs that the situation is about to change.
Rising demand in the construction industry
The government is currently implementing a $200mn national dam rehabilitation programme. Luanda's main dam at Cambambe has been allocated $70 million while Biopo and Matala will receive $3mn and $20mn respectively. The last three hydroelectric plants, Mabubas, Lumaun and Gove, all of which were badly damaged during the civil have been allocated the remainder of the funds. Last year the government already spent $15mn on power plant rehabilitation.
But by far the largest hydroelectric project in Angola is the construction of a new 520MW dam at Capanda about 300kms east of Luanda. In addition to doubling the country's generating capacity, the dam will also irrigate 120,000 hectares of arable land situated on the Capanda plateau.
The story of the construction of Capanda is probably one the longest and most trouble ridden in the history of civil engineering. Initiated in 1981 with the assistance of then soviet contractors it was due for completion by the beginning of the nineties. But the site came under attack from UNITA rebels following the resumption of war after the September 1992 elections. Construction was interrupted for fours years until government forces recovered the site by force in 1996. While the dam remained mostly undamaged, all support units had to be rebuilt and construction could not restart until 1998. Construction stopped for the second time during the whole of 1999 due to renewed fighting. Since then work has resumed but the site remains under guard by the Angolan Army, preventing further attacks from UNITA rebels. Despite all the trouble and delays Mr. Sonnenberg Managing Director of Gamek the government agency responsible for co-ordinating the project, declares: 'since the project began in the eighties declares that with enough effort and dedication we would complete the construction work'
The first two generators, each with a capacity of 130MW go into operation in April next year. They will be connected by a 240km transmission line to the Cambambe dam, which is connected to the existing transmission network for Luanda and the North. This will allow rehabilitation work to begin at Cambambe. As Minister of Energy and Water Luis Filipe indicates: 'Cambambe has an installed capacity of 80MW and there alone we will have 700MW once the rehabilitation program is over'.
The programme is part of a twenty year, $800 million spending program, which will result in the creation of a national grid interconnecting the three regional electricity sectors and establishing linkages with neighbouring countries. Progress has already been made with Namibia who signed a bilateral agreement with Angola in April last year to develop a hydroelectric facility on the Cunene River which runs along their common border. A $7mn feasibility suggests that the Epupa Falls site would be the best option both technically and economically but has raised environmental concerns since it would involve the relocation of the local Himba people.
| The principle organisation responsible for the generation, transmission, and distribution of electricity is the Empresa Nacional De Electricidad (E.N.E). 'In the short term we do not plan to privatise our generating and distribution companies. The first phase is to concentrate on restructuring ENE in preparation for the liberalisation of the electricity market' explains Minister Luis Filipe. Indeed, the government plans to let new participants into electricity generation and distribution, and a new set of laws regulating the electricity industry are expected to be approved by parliament before the end of the year.
The participation of the private sector in the expansion of Angola's electricity generating capacity is also a priority for the minister of energy and water: while we are doing our best to establish the best possible relationship with our bilateral creditors (…) we do not exclude issuing concessions to private operators for the rehabilitation of our hydroelectric power dams' explains minister Luis Filipe. So far, only the Russian owned Alrosa diamond company has come forward proposing a hydroelectric power plant on the Chicapa river to provide power for the enlargement of the Catoca mine, the fourth largest kimberlitic diamond mine in the world.
Today, only 15% of Angola's 11 million population have access to electric power. As the government starts addressing the issue more companies are getting involved in power generation or transmission. One of those companies is Jembas, Angola's only single technical assistance organisation. Founded in 1989 by first generation Angolans originally from Switzerland, Jembas plays an important role in providing Luanda electricity system with backup generators to supplement the city's insufficient hydroelectric power plant. 'We have installed a total of five turnkey projects, which are totally government funded. Put together they have a generating capacity of approximately 80MW', explains co founder Etienne Brechet.
Mr. Brechet has developed a profound understanding of the country's business environment. His company seems to be present wherever a market failure is obstructing the diversification and growth of Angola's fledgling economy. Currently he is concentrating most of his investments in power generation and telecommunications and recently opened regional offices in Lobito, Soyo and Cabinda. 'We believe economic and social development is about to take off in these areas' adds Mr. Brechet.
Indeed oil and gas infrastructure projects predict growing demand for energy, telecommunications and construction in the regions. This is already happening in Luanda where tall cranes have become a part of the capital's skyline. The biggest investors are property developers and hotel chains from Portugal. Last year they accounted for over half the $53mn in FDI (Foreign Direct Investment) invested outside the oil sector. Interviewed in his Luanda offices, the Managing Director of Habimat, José Carlos Queiroz explains 'foreign construction companies in Angola import their own materials but despite this our sales have grown by 50% per annum since we opened. Founded in 1998 by Portuguese based investors, Habimat supplies local contractors with tiles, ceramics and bathroom equipment from Spain and Portugal. The construction boom points at a recovery in business confidence and is a strong indicator that local operators now believe in long lasting peace. |
