On January 21st, at the Reform Club, London, Developing Markets Associates (DMA) in association with the UK Foreign and Commonwealth Office (FCO) and the Government of the Republic of Angola hosted the Angola Energy & Water Investment Round Table.
This exclusive round table was attended by 15 key stakeholders from the private sector, was sponsored by HSBC and was led by Angola's Minister of Water and Energy, HE João Baptista Borges. The round table was a precursor to the second Angola forum which is set to take place later this year.
Minister Borges gave an impressive presentation covering all aspects of his brief. He outlined the fact that Angola has significant challenges facing the power sector, with a strong need to invest greatly in infrastructure. Angola’s Investment Plan which was approved two years ago and runs up until 2025 includes security in energy supply.
The government wants to more than double energy access from 30% to 80% of the population by 2025. Achieving this will require a significant uplift in capacity for which the government must look to interconnectivity with other energy sources as well as expanding its distribution network. By 2025, while fuels are expected to account for over 60% of the electricity, natural gas and renewables will also feature strongly. Gas is particularly attractive as many power plants still run on diesel and jet fuel therefore making energy more expensive.
The projects are ambitious, including two very large hydroelectric plants, natural gas plants and a number of medium scaled hydro projects, including some bordering Namibia which will serve both countries along with the mining industry and local needs. The cost for the expansion plan is such that the government will be looking for different financing models, including PPP financing. The government particularly looks to more contribution from the banks as to how to structure the funding of these projects. The government is also currently restructuring the electricity sector, revising its laws, including the role of the regulator, and pricing policy, both of which aim to attract private investment.
Minister Borges then turned to the other sectors of his brief, namely water and purification. Currently about 50% of Luanda’s six million population consumes water from tanks as there is no piped water. Many people are not getting potable water and beyond the capital itself there are a vast number of people living in the periphery drinking un-purified water. In many parts of the country systems have not been renewed or rescaled for over 50 years.
The government will be investing over £1 billion in two projects to address the issues in the capital. Two projects have already been approved. Projects for 17 other capitals around the country are also already approved. A further programme for rural areas is being implemented with the aim of giving 80% of the population access to drinking water. While these projects have been assumed by the State and distribution will remain in the hands of the State, legislation has now also been passed to allow for some private investment in the water sector.
In reaching out to prospective investors the minister accepted that more and better information is required. With this in mind the government is reviewing all documentation and translating it into English; is building a ministry team to facilitate the collection of information and is beginning to ensure that some of Angola’s diplomatic representatives have at least the basic information. Minister Borges also endorsed the need to set up meetings and exchanges such as the said round table on a more regular basis.