HomeIndustry SectorsFinance and PolicyUS$1 billion loan for Angola electricity sector rehabilitation

US$1 billion loan for Angola electricity sector rehabilitation

Angola’s electricity sector has suffered from the long term effects of a civil war in the country during decades past and a lack of investment. Most people in Angola with access to modern energy, source this from diesel generators, which is expensive.

In spite of development in Angola following the 27-year war, which came to an end in 2002, infrastructure progression is stagnant as electricity is the backbone of many sectors. This is why the African Development Bank (AfDB) will be lending the country US$1 billion to rebuild electricity sources and also to encourage useful reforms.

“The bank is happy to help the government to implement the ongoing reforms with needed financing and technical expertise, in collaboration with other partners,” AfDB energy, environment and climate department director Alex Rugamba says. “The government has already shown strong ownership and commitment to the power sector and the public financial management reform process.”

According to a recent US Energy Information Administration analysis, Angola’s government earned nearly 80% of its overall revenue from oil in 2011. Reliance on oil has decreased because of electricity issues and power sector cracks. Funding from the African Development bank loan will also go to financial management, which will help stabilise revenue streams that contribute to oil production.

Angola’s government plans to spend US$23 billion by 2017 to quintuple installed capacity by building large dams and improving the power transport and distribution networks. The country has been ruled by Jose Eduardo Dos Santos, who has been in power since 1979, and he has long been accused by local opponents and international lenders of keeping Angola’s finances opaque and mismanaging the country’s wealth.

The International Monetary Fund in March 2014 warned of continued weaknesses in Angola’s financial management and urged the government to take steps to promote transparency. Transparency International ranks Angola 153 out of 177 countries in its Corruption Perceptions Index.

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