Angola Boosts Power Output with Loans from China

---

Researched by Industrial Info Resources (Sugar Land, Texas). Angola’s oil production is expected to reach about 2 million barrels per day (bpd) by the end of 2007 from the current level of around 1.5 million bpd. This increase in production and revenues and the concomitant development pressure put onto the energy infrastructure of the West African country will see electrical power generating capacity rise by 30% by the end of the year from 3,379 megawatts at the end of 2006 to 4,814 megawatts by the end of 2007. These capacity statistics do not include the considerable amount of power generated by dedicated power units used in the oil industry and by standalone generators for commercial and industrial enterprises.

Approximately $650 million was invested in 2006 on projects aimed to guarantee an increase in energy production capacity. In 2007, a number of existing projects will be completed, including the 220 kV Luanda Sul substation, the Cambambe/Viana/Cazenga transmission line in Bengo province, and the Kifangondo/Mabubas substation in the north of the country. These projects, representing a total investment of $67 million, are being developed by China’s state-owned National Machinery and Equipment Import and Export Corporation (CME).

The projects resulted from contracts signed in August 2005 between Angola’s ENEA state power utility and CME under a credit line granted by China’s Eximbank. The Luanda Sul substation and the transmission line are designed to improve energy supply, as the link will connect to the new Viana-Luanda substation. The authorities in Luanda, the country’s capital, are scheduled to install 127 transformers and two substations by the end of March as part of a second phase in the project to rehabilitate and extend low and medium tension networks in Luanda. The scheme will cost $40 million and serve 26,000 clients.

Since 2004, China has increased its credit lines to Angola and now has over $5 billion invested in projects in the country. The US-China Economic and Security Review Commission reported that since the beginning of 2006, the state oil company Sonangol has exported almost half the country’s oil production to China, putting it ahead of Saudi Arabia in volume. Angola is currently the largest single foreign supplier of oil to China. China will not have an equity share in Angolan production and exports until the Greater Plutino offshore field goes in to production. China also has a stake in another block and will receive 50% (200,000 bpd) from the output. Initially, India had bid for the block, but Sonangol awarded it to China after promises of a $2 billion soft loan.

The province of Kwanza Sul will also benefit from the power boosting program in 2007 where the overhaul of transmission lines, begun in February 2006, will allow access to power from the Cambambe hydroelectric dam in Kwanza Norte province.

A new substation began operating in Bengo province in 2006 and at the same time production capacity was raised by more than 60 megawatts as the Caminhos de Ferro and Cazenga thermal power stations came into operation. Luanda’s Empresa de Distribicao de Electricidade currently produces 190 megawatts of power. The Angolan government is launching projects to provide more power to the southern provinces of Huila and Namibe.

Industrial Info Resources (IIR) provides marketing communication services ranging from industrial database solutions to market forecasting, custom analytics, and specialty promotions that support high-level image campaigns.