AfDB grants major US $1 billion loan for Angola energy sector
In support of the Government of Angola’s efforts to reform the power sector, the Board of Directors of the African Development Bank (AfDB) approved on Tuesday, May 13 in Tunis a US $1 billion loan for the Angola Power Sector Reform Support Program. The overarching objective of the energy sector budget support program is to promote inclusive economic growth by improving operational and cost efficiency in the sector and consolidating public financial management reforms.
“The Government of Angola has already shown strong ownership and commitment to the power sector and the public financial management reform process. Therefore, the Bank is happy to help Government to effectively implement the ongoing reforms with needed financing and technical expertise, in collaboration with other partners. We expect that the program will ultimately impact positively on economic competitiveness and poverty reduction,” noted Alex Rugamba, Director of the AfDB’s Energy, Environment and Climate Change Department.
The Angola Power Sector Reform Support Program has three components:
- Restructuring the energy sector and improving its regulatory environment;
- Fostering private sector investment in the energy sector; and
- Enhancing transparency and efficiency in public financial management.
“To support implementation of the program, the Bank will also provide technical assistance and capacity-building support, to undertake a comprehensive public financial management diagnostic and produce a medium-term action plan to address weaknesses in public financial management,” explained Mr Isaac Lobe Ndoumbe, Director of the Governance, Economic and Financial Reforms Department at the AfDB.
The expected results are: improved operational efficiency, competitiveness and sustainability of the electricity sector, and strengthened transparency and efficiency of public finance.
According to Septime Martin, AfDB Resident Representative in Angola, Angola’s current Energy and Water Action Plan requires US $23 billion between 2013 and 2017. To implement the reforms in the power sector, the Government has launched the Electricity Sector Transformation Program with a clear roadmap to:
- Set up a new electricity market structure;
- Improve electricity sector operational efficiency, competitiveness and sustainability; and
- Strengthen transparency and efficiency of public finance.
The Government has requested assistance from the Bank to meet these medium- and long-term financing requirements. The Bank’s support is aligned with the Electricity Sector Transformation Program.