IEEJ：August 2016 © IEEJ2016

IEEJ:August 2016

REPUBLIC OF ANGOLAMINISTRY OF ENERGY AND WATER
COUNTRY REPORT
Knowledge Co-Creation Program – Energy Policy
Japan, May 29 to June 25 2016
By Mr. Jacinto Caculo – Director of Energy and Water – Malanje Province

1. GENERAL INFORMATION - COUNTRY OVERVIEW
1.1. Geography and Demography overview
Angola is located in the Western region of southern Africa, occupying an area ofapproximately 1,246,700 km2 area that makes Angola the sixth largest country of Africa. The
extent of its coastline is of more than 1,600 kilometers, bordering the Atlantic Ocean. Angola
has land borders to the North with the Republic of Congo and the Democratic Republic of theCongo, to the East with the Democratic Republic of Congo and Republic of Zambia, and to theSouth with the Republic of Namibia, with an extension of more than 1,400 km.

Figure 1 – Map of Angola

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Although Angola is located in a tropical zone in the southern hemisphere, it has however a
climate that is not characteristic of this region, notably due to the confluence of three factors:
the orography in the countryside, the influence of the cold Benguela current along the South
coast and the influence of the Namib desert to the southeast of the territory.
The territory of Angola is essentially characterized by contrasts between the dry and hot
climate, known as Cacimbo, from May to August, characterized by low precipitation along thecoast, and the humid climate in the months from October to April, milder and with moreabundant rainfall in the interior.
Angola is divided in 18 provinces (Bengo, Benguela, Bié, Cabinda, Cuando Cubango, CuanzaSul, Cuanza Norte, Cunene, Huambo, Huila, Luanda, Lunda Norte, Lunda Sul, Malange,
Moxico, Namibe, Uige and Zaire), which are in turn divided into Municipalities with a total of163. The Municipalities are in turn divided into a total of 618 communes. The Provinces aregoverned by a Provincial Government and the Municipalities and Communes have local
administrations.
With regards to demographics, Angola conducted a general census in May 2014 which results
indicate that Angola has a resident population of 25.789.024 inhabitants of which 12.499.041
are male (48%) and 13.289.983 are female (52%). Urban population represents over 62% of
the total population.
1.2. Political, economic and socio-economic conditions
Angola is one of the fastest growing economies in sub-saharan Africa. Its economy is largely
dependent on the oil sector, of which Angola is the second largest producer of the continent
after Nigeria. In recent years, however, Angola’s economy has experienced a significant
diversification, with the growth of the non-oil sector being superior thant that of the oil
sector, driven mainly by agriculture, energy, manufacturing, construction and service sectors.
Nevertheless, Angola’s economy still remains largely dependent on oil, which accounts for an
estimated 95% of exports, 70% of government revenue and 46% of GDP.
Apart from the oil sector, which remains the main contributor to GDP as it can be seen in
the following picture (represented within the Mining and Quarrying category) the Mining
sector (other than oil) accounts for 2.5% of GDP (included in the Mining and Quarrying
category in the graphic below), mostly dominated by diamond production, of which Angola isthe sixth world supplier. Agriculture, Construction and Manufacturing are slowly increasing its
importance and the services sector is slowly developing.

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Figure 2 - GDP per Sector (Source: Outlook, 2015)

Angola is governed by a multi-party democracy since 1992, the year it held the first generalelections. In 2008, new elections took place. The MPLA has been the governing party since thecountry’s independence, and both Presidents that Angola has had to date are issued fromthis party. Currently, the President of the Republic is Mr. José Eduardo dos Santos, whobecame, at the time of his inauguration, in 1979, the youngest President of the continent. In
the international panorama, Angola supports initiatives that foster peace and resolution ofregional disputes, sponsoring the diplomatic means in the prevention of conflict.
1.3. Energy Situation
1.3.1. Energy Resources
1.3.1.1. Large Hydroelectric Plants
Angola is currently one of the countries in the world with the largest penetration ofrenewable energy in the electric sector, mainly due to the weight of its hydroelectric plants. In
2013, around 50% of the electrical energy produced in the country originated fromhydroelectric plants.
The Ministry of Energy and Water Action Plan for the 2013-2017 period reinforces the focus
on large hydroelectric plants through the construction of Laúca with 2060 MW and
Cambambe II with 960 MW which are currently under construction. Other importanthydroelectric projects are also planned, such as Caculo Cabaça, Jamba-Ya-Mina, Jamba-YaOma and Baynes, which is a joint project with Namibia, located at the border.
1.3.1.2. Fuelwood and Charcoal
Most of the rural areas have no access to electricity and other forms of modern energy.
Fuelwood still constitutes one of the energy sources most commonly used in the rural areas ofAngola for heating and cooking. The uncontrolled use of this resource has caused somedeforestation problems, although circumscribed to the outskirts of small towns and villages.
Charcoal, mostly used in urban areas, is mostly produced in a non-sustainable way, given thatthe trees cut for its production are not replaced or do not obey to any sustainable exploitation
and reforestation program.

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Statistics on fuelwood or charcoal use or production are not sufficiently known in Angola andit is therefore difficult to estimate the impact of this practice.
1.3.1.3. Renewable Energies
Angola has, besides its enormous hydric potential, a considerable potential of renewableenergy sources with potential for power generation – hydro until 10 MW, Solar, Wind andBiomass.
Angola has only recently completed a first survey and mapping of its renewable resources,and besides some mini-hydropower centrals, the “Aldeia Solar” project and the recently
launched BIOCOM project (based on sugar cane biomass) it does not have for the momentlarge renewable energy projects.
Energy Matrix
The energy matrix of the Republic of Angola is predominantly represented by biomass, atabout 64%, petroleum products 33% and electricity only 3%. This puts the country in thedilemma of energy dependence on fossil fuels biomass products. The installed capacity in2013 was 1,848 MW which corresponded to an available capacity of 1,476 MW, of which 52%
was hydro and 48% thermal, and total losses of 26% in 2012. Generation was 6,203GWh in
2012. Electricity generation grew 88% over the past 5 years (CAGR of 13,5%).

Figure 7 – Angola's Energy Matrix 2014 (Source: MINEA)

2. CURRENT ENERGY POLICY AND MEASURESPOLICIES AND LAWS

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Angola has developed a series of policies and laws in the past years to define the main
objectives and orientations of the energy and electric sector. The mains policies and laws
developed are presented in the following sections:i.

Long Term Strategy Angola 2025

The long term strategy Angola 2025 was approved in 2008, with the major strategic objectiveof “transforming Angola into a prosperous, modern country, without poverty […] and with agrowing insertion in the world and regional economy”. The long term strategy considers theimplementation of a development strategy for the energy sector which promotes investment
optimization, both across time and across different energy sources, in order to meet internal
consumption and exports.
The strategy establishes global strategic objectives and pillars that represent important
challenges which should guide the development of the power sector, namely:
1.
2.
3.
4.
5.

ii.

To promote human development and the well-being of Angolans
To ensure a high rate of economic development
To develop national territory harmoniously
To promote an equitative and sustainable development
To promote Angola’s competitive insertion in the World Economy

Policy and Strategy for National Energy Security

Presidential Decree Nr. 256/11 of September 29th approved the Policy and Strategy for
National Energy Security, which defines the main strategic guidelines for the energy sector,
including the redefinition of the existing institutional framework. In the long term, the policy
embraces the need to transform the sector in order to respond to the major challenges
associated with demand growth, along 6 axes:
1.
2.
3.
4.
5.
6.
iii.

Generation park growth
Use of renewable energies
Electrification and grid expansion
Tariff review and economic-financial sustainability
Restructuring and strengthening of power sector operators
Promotion of private capital and know-how
General Electricity Act, 2014 (Nr. 27/15, Changes Act Nr 14-A/96, of May 31st)

The General Electricity Act, dated from the 31st of May 1996, was revised in 2014 andapproved in 2015.
The General Electricity Act Revision aimed at reviewing the responsibilities of all public actors
directly involved in generation, transmission, distribution and commercialization of electricenergy, establishing the principles for tariffs and harmonizing the General Electricity Act withother current legislation.

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iv.

Public Private Partnership Law

The Angola’s PPP law 02/2011 was published on the 14th of March with the goal of attracting
private sector investment in Angola. The law’s objective is to define the general rules of theoverall operation of the public private partnerships, from its initial stages to the adjudicationand subsequent follow-up of the implemented projects.
v.

Oil & Gas – Law Nr. 10/04 Petroleum Activities Law

The main legislation governing the Oil & Gas Sector in Angola is the Petroleum Activities Law(PAL) from 2004 and the Law on Taxation of Petroleum Activities (PTL) also from 2004. Under
these legislations, the Ministry of Petroleum (MINPET), representing the government, is
responsible for the granting of concessions and prospecting license.
The Ministry of Petroleum (MINPET) is the Ministry that supervises the whole of the Oil & Gas
Sector, being responsible for the execution of the National Policy and Coordination,
supervision and Control of the entire Oil & Gas Activity.
Sonangol, a public company created in 1976 by the Angolan government from thenationalization of ANGOL and supervised by MINPET, exists to control hydrocarbon resource
exploration on Angola. Sonangol is according to current legislation the exclusive concessionaire
for exploration of oil and gas in Angola, as well as being responsible for all the chain of value
associated to Oil & Gas in Angola.
In order for Oil & Gas operations to be carried out in Angola, the MINPET must issue either aprospecting license, under which the holder may perform activities of prospection, explorationand production in a defined area, or a petroleum concession to Sonangol, the soleconcessionaire for petroleum operations according to current legislation, who may carry out
operations alone or jointly with third party operators, once authorized by the MINPET.
Sonangol is therefore involved in nearly all Oil & Gas activities in Angola.
vi.

Electric Sector Structure

The Electric Sector, under custody of the Ministry of Energy and Water, has recently suffered alarge restructuring, with the extinction the former companies which operated all the segmentsof the sector, and the creation of three new companies, PRODEL, ENDE and RNT.
The following illustration presents a summary of the Electric Sector’s restructuring:

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Figure 8 – Restructuring of the Electric Sector (Source: Programa de Transformação do Sector Eléctrico - PTSE)

The Ministry of Energy and Water of Angola, MINEA, has as an objective to propose,
formulate, manage, execute and control the Government’s policy in the areas of energy, waterand sanitation. Amongst its responsibilities, the Ministry must propose and promote theexecution of the Energy and Water policies, to establish clear strategies to exploit in areasonable way all energy resources, ensuring their sustainable development; to plan andpromote the national policy on electrification; to foster research in its domains; to create thenecessary legislation to rule the sector’s activities, etc.
Other relevant Laws:
1. Biofuels Law Nr 6/10, from 23 April
2. Atomic Energy Law Nr. 4/07

MEASURES AND PROGRAMS
1. Action Plan 2013-2017
The Angolan Government has a very ambitious Action Plan for the period up to 2017 witharound $18b investments underway and is currently finalizing a long term vision for the power
sector with a clear roadmap to take modern electricity services to 60% of the population by2025.
The 2013-2017 Action Plan for the Electric Power Sector is mainly focused in the increase ofgeneration capacity, with 3 mains structuring projects currently under construction:
 Cambambe Hydropower Plant: This power plant, located in the river Kwanza,
currently with 180 MW of capacity, is currently being expanded and risen, with an
extra 80 MW added to the existing plant, and a new central is being built which willallow expanding the available power to 960 MW. The centrals should be operational
between the end of 2016;

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 Soyo’s Natural Gas Combined Cycle Power Plant: Soyo’s Central, with around 750
MW, will profit from natural gas available in gaseous state at Angola LNG’s terminal in
Soyo. This central will be connected to Luanda through two Very High Voltage lines
also under construction. The central should be operational during 2016;
 Laúca Hydropower Plant: This power plant, also located in the Kwanza River, will haveapproximately 2 GW of installed power and will be one of the largest in Africa and theworld.
In total, these 3 projects represent an increase in power of 3,5 GW, more than the total power
currently installed and a significant reduction in average generation cost. Additionally, Angola
has recently approved the Caculo Cabaça project with an additional 2 GW in the Kwanza river.
The Action Plan also envisages a strong investment in transmission, with the interconnectionof the North, Central and South Systems until 2017 and the creation of a new System in theEast, interconnecting the capitals of Lunda Norte, Lunda Sul and Moxico. More than 6.000 km
of Very High Voltage transmission lines and over 40 substations are planned.
Finally, on the distribution level more 600.000 new connections are planned in Luanda as well
as a high level of investment in the electrification of the remaining province’s andmunicipalities’ capitals, with a total of 2 million customers expected to get access to electricity
by 2017, mostly through usage of pre-paid meters, representing more than 40% electrificationrate.
2. Transformation Program for the Electricity Sector – PTSE
The Transformation Program for the Electricity Sector (PTSE, Portuguese acronym) is alreadyunderway.
The main objectives of this program are to ensure the economic and financial sustainability ofthe sector; to promote the entry of private capital and private know-how through an attractive
compensation regime based in PPAs with differentiated feed-in tariffs for specific cases andthe creation of the Unique Buyer, who will acquire all the energy produced in the public
system; to restructure the current organization through the creation of unique public entities
for each of the sector’s domains (Production, Transmission and Distribution); to reinforce therole of the Sector’s Regulator, IRSE, in the new Market Model.
3. National Strategy for Renewable Energy
The Government of Angola recently approved the National Strategy for Renewable Energy
establishing concrete targets for the various renewable energy sources until 2025 with a totalof 800 MW of renewable power – other than large hydro - installed, around 8 % of the totalmix, which represents an ambitious objective in terms of renewable energy penetration.
This strategy aims at contributing to the Policy and Strategy for National Energy Security, by
promoting the diversification of the national energy mix and to the Integrated Rural
Development and Poverty Fighting Program, as well as fostering growth and job creation. On

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the international side, this strategy contributes to fighting climate change and is in line with
Angola’s participation in SADC and IRENA (International Renewable Energy Association).

3. PAST ENERGY DEMAND AND SUPPLYElectricity consumption in Angola is limited. It is estimated that only 40% of people has accessto eletricity of whom 70% are located in Luanda, aplying constant pressure on supply.
Energy Demand, Electrification and Distribution
The Power Sector in Angola is characterized by a low consumption per capita (around 375
kWh per inhabitant), resulting from a low electrification rate of around 40% of the
population.
The economic growth of the past years associated with a high electrification effort andimportant investments in what concerns reinforcing power generation and existing power
plant’s operation has translated in a strong increase of offer and demand. Between 2008 and2014 the energy consumption recorded an annual average growth rate of 15.5%. As a result
the Angolan energy consumption referred to production reached 9.48 TWh in 2014, without
considering suppressed demand and self-generation.

Figure 8 – Consumption per type of customer 2008-2013 (Source: Gesto)

The strong growth of the energy consumption along the past years is associated with: i) a
great effort from the Government of Angola in order to extend electricity coverage; ii) an
improvement of the population’s living conditions, which results in higher electricity
consumption and iii) an increase of the available generation capacity.
Although available generation capacity has grown significantly over the past years, power
demand is still suppressed. Suppressed demand results in frequent power supply cuts alongwith a widespread use of generators for self-consumption, with a greater incidence in thehumid months due to the use of air conditioning. Geographically, in 2014 the energy
consumption was still highly concentrated in the northern system, representing roughly 78%
of the country’s energy consumption. The weight of the northern system is mainly due to the9

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consumption associated with the province and city of Luanda where, according to the 2014
census, there are over 6 million inhabitants and where the highest density of industries andservices is observed within the country.
The energy consumption in Angola is mostly urban and residential. It is estimated that theresidential sector demand accounts for 45% of total generation, followed by services (roughly32%) and industry (approximately 9%). Technical losses of energy are believed to reach 14%
due to the conservation conditions of the electric grid.

Figure 9 – Consumption per type of customer and electric system – 2014 (Source: Gesto)

Electricity Generation
In 2014, the total installed power capacity of Angola amounted up to 2.230 MW, which
represented an increase in 3,15% when compared to the previous year. Of this total installedcapacity 87% (1.940 MW) was available, an increase in 2% of availability with respect to 2013.

Figure 10 – Installed and Available Power in Angola by type – 2013 and 2014 (Source: ENE)

Around 40% of the installed and available power is from hydro source, the remaining 60%
corresponding to diesel based thermal generation.

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Overall, the North system accounts for 65% of the total installed and available power,
followed by the Central System (15%) and the South System (8%).
Energy consumption (and production) has been steadily increasing for the past years at a rateof more than 15%, having reached 9,5 TWh in 2014.

Figure 11 – Energy Production in Angola 2009 – 2014 (Source: ENE)

In 2014 energy production from hydropower source reached 5 TWh (53%) and diesel thermal
generation 4.4 TWh (47%).

Figure 12 – Energy Production in Angola for 2014 (Source: ENE)

4. OUTLOOK OF ENERGY DEMAND AND SUPPLY
Until 2025 demand is expected to grow at a strong pace, with the overall system load reaching
7.2 GW – more than four times the current level. An average annual growth of 15% is expected
to take place until 2017, slightly decreasing to 12.5% between 2017 and 2025. The highest rateof growth until 2017 is associated with the implementation of the Action Plan 2013-2017 andwith the significant level of investment considered in the Action Plan.
The country has an investment program ongoing to put in place 5,000 MW until 2017.

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Figure 13 – Trend of the maximum energy load of the system until 2025 (Source: Gesto)

The energy demand referred to generation is expected to reach 39.1 TWh in 2025 with aconsiderable influence of the residential sector (37%) and a significant contribution fromservices (28%) and industry (25%).

Figure 14 – Consumption per type of customer until 2025 (Source: Gesto)

Angola will thus see a sharp growth in energy consumption, meaning that the average energy
consumption per inhabitant will increase from 375 kWh per capita in 2013 to 1230 kWh in
2025. This growth is mainly due to three factors:
 The Angola 2025 strategy’s main goal is to provide access to basic energy services tothe population. Regarding energy supply from interconnected systems, it is establisheda goal for increasing the electricity coverage from 30% to 60% by 2025. With thistarget it is expected a total of 3.7 million customers in 2025 (more than three times

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the present number), meaning that more than 18 million people will benefit fromenergy supply.
 The population living in remote areas should be supplied by small hydro, solar panels
or even diesel solutions, depending on the best technical and cost/benefit solution,
considering that the target population has mainly low-income.
 Angola has currently undergoing a program called “Aldeia Solar” which objective is toimplement photovoltaic solar systems in rural areas not covered by the main grid, witha particular focus on public buildings. Two phases of this program have already been
completed, but despite the progress accomplished the number of localities benefitingfrom these solution is still low.
The total hydro electrical potential of the country which can be economically developed isassessed at about 72,000 GWh per annum, corresponding to an installed capacity of about
18,000 MW.
In 2025, as a result of the implementation of the Energy Security Strategy and Policy, theenergy matrix should present profound changes and more balance and sustainability insectoral terms (consumption matrix) and in terms of energy sources (energy mix). Electricalenergy will see its weighting increase significantly from the current 3% to about 12% or 15%,and oil derivatives will also increase in weighting from 33% to about 55%, to the detriment of
the high current weighting of the use of biomass. The intention is to make the transition tomore efficient and cleaner energies, in particular to replace biomass by LPG (Liquefied
Petroleum Gas) in the residential sector, and higher use of renewables sources of energy.

Energy matrix
2011
3%
64%

33%

Electricity

Energy matrix
2025
30%

Oil and Gas
Biomass

15%
Electricity
55%

Oil and Gas
Biomass

5. MAJOR DIFFICULTIES AND BOTTLENECKS CURRENTLY FACED IN FORMULATING
ENERGY POLICIESThe Electricity Act provides for the possibility of private participation in Generation andDistribution but until now this participation is negligible due the amount of investment neededin the Electricity Sector.
This situation is due, amongst other factors, to the lack of:

Proper regulations (of the PPP Law)

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

Incentive policies
Attractive tariffs enabling returns on the invested capital; andAn effective electricity market regulator.

6. SUBJECTS I WOULD LIKE TO STUDY
i.
ii.
iii.
iv.

Japanese Electric Power Institutional and Regulatory Framework and roleof the Regulator;
Legal framework of the Public Private Partnership in Japan
Incentive policies, specially for power generation plants under 10 MW;
Incentive policies for the creation of private companies assembling
renewable energy equipment and components for rural electrification.

Contact : report@tky.ieej.or.jp

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