Chinese contractor to begin work on $1bn Angolan power plant

Angola has announced that work is to begin on a $982m gas-fired power plant in the north-western city of Soyo (pictured). 

The project will be undertaken by China Machinery Engineering Corporation (CMEC), which signed an agreement with Angola’s Ministry for Energy and Water in August last year. 

The plant "is of great importance for the economic and social development of the country" and is part of the government’s plan to reduce the Angolan energy deficit by 2017, according to a presidential statement, reported Ventures Africa.

The combined-cycle plant will be fuelled by Angolan natural gas. To date, much of the gas produced by Angola’s deepwater oil wells has been flared off or re-injected into the oil reservoirs.

Angola has attempted to commercialise the gas bi-product by opening a liquefied natural gas (LNG) plant in 2013, but it is currently experiencing technical problems and its output is well below its capacity of 5.2 million tons a year. Its total cost may reach $14bn.

The Chinese contractor will start work after receiving the first instalment of $148m from the Strategic Financial Oil Reserve for Basic Infrastructure, a fund set up in 2010 by the office of the Angolan president to channel profits from oil exports into construction work.

Angola plans to invest $23bn in its energy sector by 2017. The largest scheme presently under way is the 2GW Laúca hydroelectric power station in the Kwanza riverbed. Work on this scheme began last year and will be completed by the end of 2017.

Angola presently has an installed capacity of 1.8GW. The strategic goal is to raise this to 9GW by 2025. 

Jose Salgueiro, director of studies, planning and statistics at the Ministry of Energy and Water, said in an interview in October 2013: "Everything is planned to have the electricity there because it’s the main way to say Angola is open for business. The promise of more power will attract more investment."