Power policy

In 2021, hydro accounted for 68% of Angola’s total generation and 67% of the 5.8 gigawatts of installed capacity. The country aims to add 800 megawatts of renewables capacity (500 megawatts of biomass, 100 megawatts of solar, 100 megawatts of wind and 100 megawatts of mini hydro) by 2025. The $23 billion strategy aims to reach 9.9 gigawatts of total capacity and boost electricity-access rates from around 34% in 2018 to 60% in 2025.

By that time, natural gas is to meet 20% of generation, hydro will account for 64%, while 8% will come from other renewables. Of the 9.9 gigawatts of new build, just under a third will be developed through public-private partnerships.

Angola has a feed-in tariff for renewable energy projects with tariffs varying if the project is up to or greater than 10 megawatts in size. Net metering for projects of up to 10 megawatts or larger is also available.

Power prices and costs

The government raised tariffs in 2019, after maintaining them since 2013. The higher retail tariffs for electricity were expected and were a consequence of electricity sector reform that started in 2014. Nonetheless, Angola has some of the lowest tariffs in the world partly due to heavy subsidies. Commercial prices went from $31.50 per megawatt-hour in 2018 to $18.30 per megawatt-hour in 2021. Industrial prices plummeted 9% to reach $11.59 per megawatt-hour in 2021. Residential rates were set at average of $17.27 in 2021.

Extensive fossil-fuel subsidies significantly affect the price at which electricity is offered by the state generation company, reducing the potential incentive for consumers to install small-scale solar photovoltaic (PV) systems. Empresa Nacional de Distribuição de Electricidade (ENDE), Angola’s national electricity company, cannot charge cost-reflective tariffs and is dependent on government subsidies. Higher rates are expected to improve the utility’s financial position and potentially attract independent producers.

Power market

Much of Angola’s infrastructure was destroyed during its 27-year civil war, which ended in 2002. The power network is fragmented across three regional grids and some isolated systems. In March 2020 Angola received a multimillion-dollar loan from the African Development Bank (AfDB) to fund the North-Central-South backbone connection. This transmission project, which was under construction as of the end of 2022, is part of the government’s Energy Sector Efficiency and Expansion Program (ESEEP).

Significant investment expanded Angola’s power-generating capacity from just 700 megawatts in 2002 to around 14.1 gigawatts in 2021. The country saw capacity grow 64% in the last five years with the commissioning of the 750-megawatt Soyo natural gas-fired plant and the completion of additional phases of the Lauca hydroelectric dam totaling over 1.6 gigawatts. When fully commissioned, the $4.3 billion Lauca project will become the largest hydropower plant in southern Africa, alongside Mozambique’s Cahora Bassa.

The Angola government hopes to reach a 60% electrification rate by 2025. As of 2021, the national rate was 45.9%, with much lower rates in rural areas. Angola has ambitious, if unsupported, near-term plans to develop renewable energy. It seeks to connect more than 800 megawatts to the grid by 2025.

Through power sector reform, the government has sought to strengthen the role of independent regulator Instituto Regulador dos Serviços de Electricidade e de Água (Regulatory Institute for Energy and Water Services, IRSEA). It has also sought to unbundle the power market, creating PRODEL-EP on the generation side, together with RNT and ENDE as the transmission- and distribution-system operators. Generation and distribution/retail are technically open to private participation, but state-owned firms still dominate the market. State-owned PRODEL-EP owns most grid-connected generation assets. Two independent power producers, Aggreko Angola and CIF, also participate in the market. With an energy sector dominated by large hydro, Angola has not received significant investment in other forms of utility-scale clean energy in recent years. However, its 2025 energy strategy will require substantial investment in renewables, much of which is likely to come in the form of concessional financing.

Doing business and barriers

Angola’s economy grew 0.7% in 2021 after contracting for five years due to a slower-than-expected economic recovery for its large petroleum sector. Declining crude production, falling oil exports and high inflation suggest a challenging economic outlook. Investments in power-generating capacity in the form of new large hydro facilities have improved the reliability of power supply in the capital region in recent years. However, soaring demand and population growth mean electrification will not be an easy process.

The government highly stimulates the development of mini-grids and small-scale PV projects to expand electricity access in rural areas. The mapping of resources has been carried out to some extent across all technologies and several solar hybridization projects are underway, but no concrete steps have yet been taken to advance a planned solar auction program or to develop the country's wind resources.

State-run utility ENDE is prohibited from charging cost-reflective tariffs and is fully dependent on government subsidies. The grid regularly experiences significant technical and commercial losses. The country is aggressively modernizing its power plant fleet, growing generation capacity with a focus on constructing new large hydroelectric facilities, as well as expanding and modernizing existing facilities.

Angola’s average cost of importing in terms of border and documentary compliance far exceed Sub-Saharan Africa averages, according to the World Bank's Doing Business 2020 survey.

The sector suffers from several inefficiencies, including non-payment from customers as more than 80% do not even have meters. Electricity production and distribution costs are high but average consumer tariffs are low. Official estimates of total sector losses are over 60%. ENDE, PRODEL and RNT, the country’s main offtakers, are all heavily indebted.

EV market

Angola’s electric vehicle (EV) market is extremely immature as the country has just officially allowed such cars on the road in 2022. Before the regulatory change, startup company T’Leva introduced 1,000 EVs to Angola’s roads, and initially encountered resistance due to the lack of a legal framework for EV circulation.

EV policy

Angola introduced its first EV policies in 2022, with a 50% reduction of both import tax and vehicle tax up to 2032 for EVs.

Buildings market

As a sub-Saharan country, Angola does not have a developed low-carbon heating market. It also lacks substantive policy support to improve building energy efficiency.

Buildings policy

Angola has stated on its most recent NDC that its target by 2030 on energy efficiency is the installation of 4,000 efficient LED lamps in public buildings and another 4,000 in public spaces. In partnership with the AfDB, Angola is in the process of implementing the Energy Sector Efficiency and Expansion Programme Phase 1 (ESEEP I). The program focuses on reducing non-technical losses and decreasing dependence on state-subsidies for fuel, and the planned completion date is the end of 2024.