Angolan Leaders Talk Renewable Energy for Economic Development

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Source: Isabel Dos Santos SPIEF’19 St Petersburg International Economic Forum

The Angola Energy 2025 strategic plan seeks to invest heavily in renewable energy as a supplement for the electrical power grid of Angola. The government is focusing on developing the hydroelectric capabilities of Angola, notably through the Development Plan for the Energy and Water Sector project. A focus on renewable energy, particularly hydropower is gaining significant momentum with companies fast-tracking the development of alternative fuels and energy sources to counter the nonrenewable supplies of fossil fuels. Official Angolan Government data indicates that energy consumption may reach 39 TWh by 2025, significantly greater than the 9 GW of current energy capacity through hydropower.

The Government of Angola has mandated the installation of renewable energy sources that exceed 7.5%, approximately 3TWh. Of particular importance in the new renewables strategy is the connection of new technology to supplement the existing power grid. This will be done to reduce asymmetric electrical supply across the region, and provide greater power supply to new markets. By replacing fossil fuels with renewable energy sources, government and big business are looking to create employment opportunities for Angolans across the nation. The provision of renewable energy in rural areas is particularly important to the government. New energy sources will assist local communities in areas where there is no electrical power to enjoy access to safe and healthy energy sources.

Widespread Public and Private Investment in Renewable Energy

Another notable strategic objective of the renewable energy initiative is the promotion of public investment and private investment by key players in the industry. Government will enjoy cost savings by reducing subsidies to fossil fuel industries. This will also allow for a more equitable pricing mechanism that makes it profitable for investors to get involved. A new focus on renewable energy development will be geared towards domestic use, public services, and entrepreneurial activity. The renewable energy plan encompasses several different technologies. These include biomass energy, solar energy, wind energy, and hydropower.

Energy provision is critical to the development of rural and urban areas of Angola. By providing renewable energy sources in rural areas, hydropower and solar power plants can create small local grids through private initiatives. For the dispersed rural communities throughout Angola, the objective is to implement solar energy sources as effective solutions for energy provision. Currently, dispersed communities are heavily reliant on coal and wood for energy supply. As a result, the government of Angola and corporate enterprise is focused on rural electrification initiatives through solar, hydropower, and wind energy.

The Angolan government released a publication on its energy capacity in November 2018. According to the report, the Angolan economy is placing increasing pressure on the energy sector to meet its growing needs. The targeted electrical capacity 9.9 GW by 2025 is an ambitious undertaking. If achieved, Angola will have a 60% electrification rate. At the time of writing, the current capacity stands at approximately 6.3 GW, comprised of 24% other fossil fuels (1.5 GW), 12% natural gas (750 MW), and 64% hydroelectric power (4 GW).

The country occupies 481,400 mi.² of space, and has a population of 29.3 million+ people. The gross domestic product per capita (GDP) is $4,418, with most of the country’s revenue streams coming from public administration, construction, mining, and transport. As an emerging market economy, Angola faces challenges vis-a-vis telecommunications networks, transportation networks, and infrastructure development. As such, the provision of alternative energy a.k.a. renewable energy is seen as essential for growth and development.

Business Leaders Invest in Renewable Energy Development

Angolan business leaders are stepping up to the challenge. Power players like Isabel Dos Santos, chairperson of Unitel are working hard to realise these objectives. She heads up multiple companies in Angola, including CANDANDO, ZAP, Sodiba, and EFACEC. With thousands of Angolans under her employ, she is spearheading various initiatives to bolster renewable energy development in the country. For example, the EFACEC Power Solutions company is working to develop a strong infrastructure for electric vehicle technology. Dos Santos is hoping to implement electric vehicles in Angola in the not-too-distant future.

As a visionary leader, and a proponent of change, Dos Santos is looking to empower Angolans through the implementation of technological change, innovation, and introduction of renewable energy supplies. Her forward-focus on clean energy, technological change, and growth in foreign direct investment in Angola have characterised her business strategy for years. At a recent International Economic Forum in St Petersburg Russia, Dos Santos met with major world leaders including Vladimir Putin of Russia and impressed upon these leaders the need to invest heavily in African infrastructure and transportation networks.

At current levels, barely 10% of rural Angolan areas have electricity resources. The rate in cities is 43%. Owing to these limited electrical supplies, Angolans have taken to generators for meeting their needs. Rising fuel costs and decreased government subsidies have pushed people in other directions. There are currently 3 unique electrical grid systems in the country. A southern grid, a northern grid, and a central grid. Various isolated electrical grids occupy the eastern part of the country.

Government has implemented rate increases for electrical supply, as it hopes to become financially viable and stop subsidizing the industry. The objective is to allow for greater viability without government subsidies. The restructuring of the Angolan electrical supply was qualified in the General Electricity Law of December 2015. According to USAID, the current access rate for energy in Angola is 36%, with 3.4 million households without power. The 60% objective by 2025 is certainly ambitious, but doable given the commitment of the government and key business leaders.

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Start: 2019-07-01 End: 2019-07-31