The African Development Bank (AfDB) has signed up to provide $530 million to construct a transmission line in Angola.
The country’s north has a surplus of more than 1,000 MW of renewable power. The south, meanwhile, relies on diesel generators, requiring government subsidies.
Building the 343 km, 400 kV central-south transmission line will allow clean energy to be better distributed in the country.
The new line will be operational in 2023, the AfDB said. This will reduce the need to consume 46.8 billion litres per year of diesel in the south – cutting 80 million tonnes of CO2 emissions. Angola will also save more than $130mn per year in diesel subsidies.
The AfDB will provide $480mn in financing for the work. The Chinese-backed Africa Growing Together Fund (AGTF) will stump up another $50mn. The AGTF is a $2 billion facility from the People’s Bank of China, administered by the AfDB.
The bank also noted that metering in Angola would improve. As part of Angola’s Energy Sector Efficiency and Expansion Programme (ESEEP), 860,000 pre-paid meters will be installed. The statement said 400,000 new customers would be connected to the grid.
The ESEEP will be the “first step” in providing a connection to the Southern Africa Power Pool (SAPP). The new line will distribute power in Angola’s southern provinces and into Namibia.
Angola has increased its renewable energy generation from 1,017 MW to 2,763 MW between 2015 and 2019.
The financing commitment comes as Portugal’s MCA Group has broken ground on a major solar project in Angola.
The US’ Sun Africa broke ground on the solar project on March 11, said to be the largest in sub-Saharan Africa. Sun Africa is building a 370 MW solar portfolio in the country, made up of seven individual projects. The Biopio project will have 188 MW of capacity, making it the largest single plant in sub-Saharan Africa.
Sun Africa will build two of the plants in the Benguela Province. According to the World Bank, 43% of Angola’s population has access to electricity. The government aims to increase this to 60% by 2025.
The Swedish Export Credit Corp., South Korea’s K-Sure and South Africa’s DBSA are financing the $650mn project. Sun Africa has said around $150mn of equipment and services will come from the US. Hitachi and ABB are also working on the project.
The companies will manufacture solar panels in South Korea, while Sweden will provide equipment and transmission systems. Sweden is providing the bulk of the financing.
Angolan Minister of Energy and Water Joao Batista Borges was quoted as saying the project was a “strong bet” by the administration on new renewable energy.
The project is possible because of “the confidence that creditors have in Angola’s capacity to honour its commitments and, above all, in the stability of the country and its firm leadership”, Borges said.