REFERENCE CODE GDPE0704ICR PUBLICATION DATE JANUARY 2014 ANGOLA POWER MARKET OUTLOOK TO MARKET TRENDS, REGULATIONS, AND COMPETITIVE LANDSCAPE

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1 REFERENCE CODE GDPE0704ICR PUBLICATION DATE JANUARY 2014 ANGOLA POWER MARKET OUTLOOK TO MARKET TRENDS, REGULATIONS, AND COMPETITIVE LANDSCAPE

2 Executive Summary Hydropower Dominates Angola s Power Mix Hydropower is the dominant source of electricity in Angola and accounted for XX% of its total installed capacity in The remaining XX% came from oil-based thermal power. Oil is the only thermal power source in Angola, and gas- and coal-based generation is still non-existent. Continued Increase in Annual Power Consumption and Generation Annual power consumption in Angola increased from XX Terawatt hours (TWh) in 2000 to XX TWh in 2013 at a Compound Annual Growth Rate (CAGR) of XX%. This high rate was the product of economic growth due to the boom in oil production that the country has been enjoying since 2002, when the violence of the Angolan Civil War that had gripped the country since 1975 finally ceased. Annual electricity generation also increased from XX TWh in 2000 to XX TWh in 2013 at a CAGR of XX%. Power Market, Angola, Annual Power Consumption and Generation (TWh), Annual consumption and generation (TWh) Hydropower and Gas-based Generation to Increase in the Future Angola s power sector is set to witness an increase in both hydropower installed capacity and gasbased generation capacity. It is currently utilizing only a fraction of its XX Gigawatt (GW) hydropower potential, with installed capacity of XX GW, although this is a dramatic increase at a CAGR of XX% from XX GW in Between 2014 and 2030 it is expected to increase at a higher CAGR of XX%. Electricity consumption is expected to gather momentum at a CAGR of XX% between 2014 and 2020 due to growth in its oil-powered economy and the government s focus on increasing electricity access. The other source of electricity in the country, namely oil, is not expected to expand much as the government intends to export most of what it produces in the future and use the gas that is drilled alongside oil for power generation. A 40 Megawatt (MW) project is set to come online in Gas-based capacity is further set to expand post-2020 as electricity consumption races forward in the war-ravaged country, where electricity access rates are set to increase from the current XX% as the government builds up its power infrastructure Annual power consumption Annual power generation Source: GlobalData, Power etrack, Capacity and Generation Database [Accessed on December 26, 2013] 2

3 Table of Contents 1 Table of Contents 1 Table of Contents List of Tables List of Figures Introduction GlobalData Report Guidance Angola, Power Market, Snapshot Angola, Power Market, Macroeconomic Factors Angola, Power Market, Supply Security Angola, Power Market, Generation Infrastructure Angola, Power Market, Transmission Infrastructure Angola, Power Market, Opportunities Angola, Power Market, Challenges Angola, Power Market, Market Analysis Angola, Power Market, Supply Structure Angola, Power Market, Key Market Players Angola, Power Market, Financial Deals Deal Volume and Value Analysis, Angola, Power Market, Demand Structure Angola, Power Market, Regulatory Scenario Angola, Power Market, Key Electricity Policies Renewable Energy Policies

4 Table of Contents Sector Reforms Angola, Power Market, Foreign Investment Scenario Angola, Power Market, Capacity and Generation Overview Angola, Power Market, Cumulative Installed Capacity, Breakup by Type of Power Plant, Angola, Power Market, Cumulative Installed Capacity and Annual Power Generation, Cumulative Installed Thermal Capacity and Annual Thermal Power Generation, Cumulative Installed Hydropower Capacity and Annual Hydropower Generation, Angola, Power Market, Transmission and Distribution Overview Angola, Power Market, Transmission and Distribution Overview Angola, Power Market, Grid Interconnection Angola, Power Market, Electricity Trading Angola, Power Market, Competitive Landscape: Snapshot of Leading Power Generating Companies Key Company in the Angola Power Market: Empresa Nacional de Electricidade Business Description SWOT Overview Appendix Market Definitions Power Installed Capacity

5 Table of Contents Active Installed Capacity Electricity Generation Electricity Consumption Thermal Power Plant Hydropower Plant Nuclear Power Renewable Energy Resources Abbreviations Bibliography GlobalData s Methodology Coverage Secondary Research and Analysis Primary Research and Analysis Disclaimer

6 Table of Contents 1.1 List of Tables Table 1: Power Market, Angola, Gross Domestic Product ($bn), Population (million), and Annual Electricity Consumption (TWh) Table 2: Power Market, Angola, Annual Electricity Consumption (TWh), Table 3: Power Market, Angola, Foreign Direct Investment ($bn), Table 4: Power Market, Angola, Cumulative Installed Capacity (GW) and Annual Power Generation (TWh) Table 5: Power Market, Angola, Cumulative Installed Thermal Power Capacity (GW) and Annual Thermal Power Generation (TWh), Table 6: Power Market, Angola, Hydropower Potential of Major River Basins (GW and TWh), Table 7: Power Market, Angola, Cumulative Installed Hydropower Capacity (GW) and Annual Hydropower Generation (TWh), Table 8: Power Market, Angola, SWOT Profile of Empresa Nacional de Electricidade, Table 9: Abbreviations List of Figures Figure 1: Power Market, Angola, Gross Domestic Product ($bn), Population (million), and Annual Electricity Consumption (TWh) Figure 2: Power Market, Angola, Annual Electricity Consumption (TWh), Figure 3: Power Market, Angola, Cumulative Installed Capacity (GW) and Annual Power Generation (TWh) Figure 4: Power Market, Angola, Cumulative Installed Thermal Power Capacity (GW) and Annual Thermal Power Generation (TWh), Figure 5: Power Market, Angola, Cumulative Installed Hydropower Capacity (GW) and Annual Hydropower Generation (TWh),

7 Introduction 2 Introduction Angola is a developing economy in southern Africa, largely dependent on oil and diamond resources. Subsistence farming provides a livelihood to nearly XX% of the workforce. Although Angola recorded high economic growth rates of around XX% from 2004 to 2008, socioeconomic problems continue to plague overall development, due in turn to the Civil War, Additionally, rampant corruption, high poverty rates, and social inequity are lingering detrimental factors which adversely affect overall economic development. Angola is a member of the South African Development Community (SADC), which aims to develop social and economic relations between member countries. In 2009, it entered into a Trade and Investment Framework Agreement with the US to generate investment opportunities and increase trade volumes between the two countries. In July 2010, the US also entered into a Strategic Partnership Dialogue with Angola, which strengthened bilateral ties between the two countries. The global economic recession of 2008 caused a slowdown in the country s Gross Domestic Product (GDP) growth rate. In 2009, it stood at XX% before increasing to XX% in 2010 (constant prices). For the previous five years, the economy had grown at an average rate of XX% per year. The slowdown in the GDP growth rate was due to lower international prices for oil and diamonds, but high international prices in 2011 helped the economy to recover to register a growth rate of XX% (IMF, 2013). With an estimated GDP of $XX trillion in 2012, the country registered a growth rate of XX% from The industrial sector is estimated to have contributed XX% of the country s GDP in 2012, followed by the services sector (XX%) and the agricultural sector (XX%) (OECD, 2013). The major reasons for the increase in the GDP growth rate in 2012 were expansion in the oil and gas sector and a public expenditure program designed to encourage economic diversification. The Ministry of Energy and Water is responsible for formulating, executing and monitoring energy, water and sanitation policies. The Instituto Regulador do Sector Eléctrico de Angola (IRSE) is the relevant regulatory body. Empresa Nacional de Electricidade de Angola (ENE), the national electricity company, undertakes electricity generation, transmission and distribution activities. It distributes electricity to major urban centers, except the city of Luanda, where Empresa de Electricidade de Luanda (EDEL) is responsible for electricity distribution activities. 7

8 Introduction 2.1 GlobalData Report Guidance The executive summary captures the key growth trends in Angola s power market. Chapter three provides a snapshot of the key parameters that affect Angola s power sector, as well as key points about its power market. Chapter four provides analysis of Angola s power market. Chapter five details the regulatory scenario of the Angolan power market and the inward foreign investment scenario. Chapter six provides information on Angola s cumulative installed capacity and annual generation trends, as a whole and by individual generation source. Chapter seven describes the country s power transmission and distribution infrastructure and includes information on interconnectors with neighboring countries. The section also covers electricity imports and exports and upcoming grid-related projects. Note: All 2013 market figures provided in the report are estimates except where actual data were available. 8

9 Angola, Power Market, Snapshot 3 Angola, Power Market, Snapshot 3.1 Angola, Power Market, Macroeconomic Factors Angola s economy showed double-digit growth from 2004 to 2008 but then fell to only XX% in 2009 and XX% in 2010 due to the global financial crisis. It performed slightly better in 2011 with a XX% growth rate and rebounded more strongly in 2012 at XX%. Economic growth was helped by the implementation of the stand-by arrangement of the International Monetary Fund from 2009 to 2012, which helped it to achieve better financial stability, comfortable foreign exchange reserves, stable exchange rates, and lower inflation. Domestic arrears were also settled during this period and progress was made in improving financial transparency and accountability. However, significant challenges remain, such as high dependency on the oil sector, the rebuilding of economic and social infrastructure, and a general improvement in administration and governance. The economy is expected to grow at a Compound Annual Growth Rate (CAGR) of XX% from 2014 to 2018, compared to XX% between 2000 and The country s population increased from XX million in 2000 to XX million in 2013 at a CAGR of XX% and is expected to continue to growing at roughly the same rate from 2014 to 2018 to reach an estimated XX million. Electricity consumption in Angola grew from XX Terawatt hours (TWh) in 2000 to XX TWh in 2013 at a CAGR of XX%. The large increase in consumption was due to the vigorous growth in the manufacturing sector, due in turn to the growth in the country s oil-driven economy. Even between 2014 and 2018, growth in electricity consumption is expected to maintain pace, increasing at a CAGR of XX% to XX TWh by

10 Angola, Power Market, Snapshot Figure 1: Power Market, Angola, Gross Domestic Product ($bn), Population (million), and Annual Electricity Consumption (TWh) GDP ($bn) and population (million) Annual electricity consumption (TWh) GDP (constant prices) Population Annual electricity consumption Source: GlobalData; IMF,

11 Angola, Power Market, Snapshot Table 1: Power Market, Angola, Gross Domestic Product ($bn), Population (million), and Annual Electricity Consumption (TWh) Year GDP (constant prices) Population Annual electricity consumption Source: GlobalData; IMF,

12 Angola, Power Market, Capacity and Generation Overview Cumulative Installed Thermal Capacity and Annual Thermal Power Generation, Cumulative thermal power installed capacity in Angola was XX GW in 2000, which increased to XX GW in 2013 at a CAGR of XX%. It is expected to increase to XX GW by 2030 at a CAGR of XX%. Annual thermal power generation increased from XX TWh in 2000 to XX TWh in 2013 at a CAGR of XX%, and is expected to reach XX TWh by 2030 at a CAGR of XX%. 24

13 Angola, Power Market, Capacity and Generation Overview Figure 4: Power Market, Angola, Cumulative Installed Thermal Power Capacity (GW) and Annual Thermal Power Generation (TWh), Cumulative installed thermal capacity (GW) Annual thermal power generation (TWh) Cumulative installed thermal capacity Annual thermal power generation Source: GlobalData, Power etrack, Capacity and Generation Database [Accessed on December 24, 2013] 25

14 Angola, Power Market, Capacity and Generation Overview Table 5: Power Market, Angola, Cumulative Installed Thermal Power Capacity (GW) and Annual Thermal Power Generation (TWh), Year Cumulative installed thermal capacity Annual thermal power generation Source: GlobalData, Power etrack, Capacity and Generation Database [Accessed on December 24, 2013] 26

15 Appendix 9 Appendix 9.1 Market Definitions Power Power refers to the rate of production, transfer or energy use, usually related to electricity. It is measured in watts and often expressed in kilowatts (kw) or MW. It is also known as "real" or "active" power Installed Capacity This term refers to the generator s nameplate capacity, as stated by the manufacturer, or the maximum rated output of a generator under given conditions. It is given in MW on a nameplate affixed to the generator Active Installed Capacity This refers to the component of electric power that actually performs work, given in kw or MW Electricity Generation This refers to the production of electric energy, achieved through the transformation of other forms of energy. It also refers to the amount of electric energy produced and is measured in Gigawatt hours (GWh) Electricity Consumption Electricity consumption is the sum of electricity generated, plus imports, minus exports, minus transmission and distribution losses. It is measured in GWh Thermal Power Plant A thermal power plant is a plant in which the turbine generators are driven by burning fossil fuels Hydropower Plant A hydropower plant is a plant in which the turbine generators are driven by falling water. 37

16 Appendix Nuclear Power Nuclear power refers to electricity generated by the use of thermal energy released from the fission of nuclear fuel in a reactor Renewable Energy Resources Renewable energy resources are naturally replenishing energy resources that are limited in the amount of energy available per unit of time. Biomass, geothermal, solar and wind energy are all examples of renewable resources. 9.2 Abbreviations Table 9: Abbreviations ANIP Agência Nacional para o Investimento Privado CAGR Compound Annual Growth Rate EDEL Empresa de Electricidade de Luanda ENE Empresa Nacional de Electricidade GDP Gross Domestic Product GW Gigawatt IRSE Instituto Regulador do Sector Eléctrico MW Mega Watt SADC South African Development Community TWh Terawatt-hour Source: GlobalData. 38

17 Appendix 9.3 Bibliography BP Statistical Review (2013). BP Statistical Review of World Energy June 2013 [database]. Available from: Review/statistical_review_of_world_energy_2013_workbook.xlsx [Accessed on December 26, 2013]. IMF (2013). World Economic Outlook Database, April 2013 [database]. International Monetary Fund. Available at: [Accessed on December 26, 2013]. Laxmidas S (2013). Angola says $23 billion electricity plan needs sharper, skilled sector, Thomson Reuters, September 25, Available from: [Accessed on December 20, 2013]. Macauhub (2011). Angola s electricity sector needs investments of $16.5 billion by 2016, Macauhub English, December 19, Available from: [Accessed on December 17, 2013]. McClelland C (2013). Angola to Raise Power Output Fivefold to Attract Investors, Bloomberg L.P., October 4, Available from: [Accessed on December 24, 2013]. MEW (2013). Challenges of Angola Power System for the Period Ministry of Energy and Water, Available from: ola%20power%20sector.pdf Musaba L (2013). The SAPP Priority Transmission Projects. The Southern African Power Pool, July 12, Available from: ission%20prtojects_12%20july% pdf 39

18 Appendix OECD (2013). African Economic Outlook 2013 [database], Table 2. GDP by Sector (%) Angola. Available from: [Accessed on December 23, 2013]. PennWell Corporation (2013). APR wins 40 MW mobile gas turbine power contract in Angola, PennWell Corporation, December 10, Available from: [Accessed on December 24, 2013]. The Daily Fusion (2013). LNG Production Started at Chevron s Angola LNG Project, The Daily Fusion, June 21, Available from: [Accessed on December 24, 2013]. The World Bank (2013). Ease of Doing Business in Angola. The World Bank, Available from: [Accessed on December 19, 2013]. Trinity International L.L.P. (2013). Africa Power Guide: Angola. Trinity International L.L.P., Available from: [Accessed on December 16, 2013]. UNCTAD (2013). World Investment Report 2013, Global Value Chains: Investment and Trade for Development. United Nations Conference on Trade and Development, Available from: US Department of State (2012). Angola: Investment Climate Statement for 2012, US Department of State, Available from: [Accessed on December 20, 2013]. 40

19 Appendix 9.4 GlobalData s Methodology GlobalData s dedicated research and analysis teams consist of experienced professionals with backgrounds in marketing, market research and consulting in the power industry, and advanced statistical expertise. GlobalData adheres to the codes of practice of the Market Research Society ( and the Strategic and Competitive Intelligence Professionals ( The following research methodology is followed for all country outlook reports Coverage This report gives detailed information on Angola s power market. It examines Angola s power market structure and provides historical and forecast numbers for generation, capacity and consumption up to The report provides insights on the market s regulatory structure, import and export trends, competitive landscape and leading active and upcoming power projects Secondary Research and Analysis The capacity, generation and consumption data is collected and validated using a number of secondary resources, including, but not limited to: Government agencies, ministerial websites, industry associations, the World Bank, statistical databases Company websites, annual reports, financial reports, broker reports and investor presentations Industry trade journals, market reports and other literature GlobalData s proprietary databases, including the Capacity and Generation Database, the Power Plant Database and the Transmission and Distribution Database Further to this, the following secondary information is collected and analyzed to project Angola s power market scenario through to 2030, analyzing factors such as the following: Angola s macroeconomic scenario Government regulations, policies and targets Government and private sector investments 41

20 Appendix Contract and deal announcements Utility expansion plans The sector s historic track record Other qualitative insights built through secondary research and analysis of company websites, annual reports, investor presentations, industry and trade journals, and data from industry associations Primary Research and Analysis Secondary research is further complemented through primary interviews with industry participants to verify and fine-tune the market numbers obtained through secondary research and gain firsthand information on industry trends. The participants are drawn from a diverse set of backgrounds, including equipment manufacturers, industry associations, government bodies, utilities, distributors, and academia. The participants include, but are not limited to, C-level executives, industry consultants, academic experts, business development and sales managers, purchasing managers, plant managers, government officials, and industry spokespeople. 9.5 Disclaimer All Rights Reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior permission of the publisher, GlobalData. This report is a licensed product and should not to be reproduced without prior permission. 42