Angola Energy Low-Cost Electricity

Market Overview

Angola has the lowest electricity rate in the Southern Africa Development Community (SADC), with an average of 11.1 Kwanzaas (Angola currency) per Kilowatt-Hour (kWh), whereas the SADC regional average rate is more than eight times higher, averaging 89.1 Kwanzaas per kWh. Currently, Angolan Government subsidies keep the electricity market afloat and any increase in electricity prices (the last increase occurred in 2019), especially if up to SADC regional prices, would make electricity too expensive for the average Angolan, and would have a huge economic impact on the economic health of the public companies that manage the sector.  These public companies include the National Electricity Transmission Network (RNT), the National Electricity Distribution Company (ENDE), and the Public Electricity Production Company (PRODEL).

The companies that make up Angola’s Public Electric System rely on government subsidies to keep energy costs affordable for many low and middle-income households in Angola. These subsidies present a huge cost to the government and create a market solely dependent on government assistance to survive. As a result, most public electricity companies function at a deficit and cannot invest in additional infrastructure to distribute power and enlarge the national power grid system to areas currently without coverage. Therefore, these companies do not attract new consumers to the network, severely limiting their market potential. On the other hand, Angola has made large investments in energy production and soon, will add another 2 GigaWatt (GW) to its production capability (through the Caculo-Cabaça dam in Cuanza North), reaching 9 GW.  With low distribution and high production, Angola is a country with unused, untapped excess electricity.
 

Market Opportunities: Unused Excess Production

Capitalizing on the surplus energy production in Angola can be an excellent opportunity and entry point for U.S. companies in this sector. One of Angola’s development goals is to export excess energy to neighboring countries, and to integrate into the Southern African Power Pool. U.S. companies with experience in building power lines and laying long-route power cables should consider exploring the Angolan market and submit proposals to enlarge the power grid. The U.S. Commercial Service in Angola can help U.S. companies identify public-sector projects related to grid expansion and connect U.S. companies to U.S. government resources aimed at increasing power connectivity in Africa. For example, the U.S. Agency for International Development’s Power Africa program is a key initiative that U.S. companies in this sector could tap into for support.

Additionally, U.S. companies that specialize in large-scale battery storage, and advanced technologies to monitor and manage the electrical grid (i.e., energy management systems, smart grids, etc.) should consider exploring opportunities in Angola to increase efficiency and reduce energy losses. Angola needs these kinds of advanced tools to monitor and store their excess energy supply.

Finally, to the extent that U.S. companies are interested in localization, Angola could be an ideal place if involved in an industry with high energy consumption such as mining and manufacturing. The government is looking for companies that can be “off takers” of the excess energy and buy energy to generate national income. U.S. companies that can use excess energy available at a cheap cost are encouraged to look at this dynamic market to keep production costs low.

Next Steps

For more information about the opportunities in the electricity/energy sector and to design your market-entry strategy for Angola, please contact Commercial Assistant Mauro Fonseca at Mauro.Fonseca@trade.gov.