World Bank highlights China’s support for improvements in electricity generation in Angola

1 July 2019

Angola’s electricity production capacity, one of the critical factors for the country’s development, has been increasing thanks to support provided by China, according to the World Bank.

The World Bank’s assessment comes in a recent report on the Angolan private sector, entitled “Creating Markets in Angola – Opportunities for Private Sector Development”, which identifies priority areas as agro-industry, transport, information and communication technologies, health, education and financial services, as well as electricity.

“With financial support from China, Angola has made notable improvements in production capacity, although access to electricity remains limited,” the report said.

The World Bank also reported that electricity production capacity has more than doubled since the end of the civil war (2002), reaching around 3.3 gigawatts in 2017, of which 59.5% from water sources and the remainder from fossil fuels.

This, after the Cambambe II hydroelectric project (700 megawatts) went into operation in mid-2017.

According to the World Bank, transmission and distribution remain “fundamental challenges for the sector”, with only 30% of the population currently having access to electricity (43.0% in cities and only 8.0% in rural areas).

“Access to electricity is a problem for many companies, including in Luanda and industrial areas (such as Viana, the suburban area of Luanda), which forces companies to rely on expensive power generators. Generators are also required as a backup because of the poor reliability of the power supply. Electricity consumption by the industrial sector is low, accounting for only 8.0% of total production,” the report said.

The World Bank recalls that Angola is “slowly recovering” from a “severe” macroeconomic crisis caused by a “sharp and prolonged” drop in oil prices since mid-2014, after years of prices of this commodity on international markets.

In terms of foreign trade, it said, Angola is now one of the least diversified economies in the world, with 96.5% of exports in 2016 consisting of oil and diamonds.

Among the sectors of the non-oil economy that have performed the best are services, namely financial services, consumer services (real estate, retail and telecommunications, among others) and construction, whose weight has gone from 5.0% of GDP in 2004 to an estimated 13.7% in 2017.

Agriculture grew more modestly, reaching 10% of the Gross Domestic Product, while manufacturing industry stagnated at a low level of 5.0% of GDP. (Macauhub)