Angola’s Investment Windfall Continues Ahead of Biden’s First and Last Visit to Africa
Angola’s investment windfall has continued, as multiple lenders and companies announce they will either expand or make investments in the country.
Luanda will host US President Joe Biden in what will be the outgoing president’s first and last visit to the continent.The visit is strategic, as Washington and Beijing are engaged in a tussle for control of Central Africa, which hosts some of the raw materials necessary to make the electric revolution succeed.In anticipation of the visit next week, multiple investors have announced plans to invest in Angola.“We see great opportunities to acquire mature assets in Angola, reduce emissions from those assets and further develop them,” said Paul McDade, CEO of Afentra, and independent energy firm, adding, “We anticipate more large companies divesting in the future, with independents stepping in to acquire mature fields. We aim to continue working alongside Angolan companies, combining efforts to secure additional assets. The challenge lies in convincing investors to finance these projects.”
At the Angola Oil & Gas Conference & Exhibition, Martin Deffontaines, Managing Director of TotalEnergies Angola said the energy giant is driving new upstream programs in the country.
The company’s Kaminho Deepwater Development secured a $6-billion Final Investment Decision (FID) in May.
“The world is changing and we have to adapt. We are committed to net-zero by 2050 as a company. We are closing flaring at all our FPSOs, of which we currently operate six in Angola. We will close the Dalia FPSO flare, which will save around 50,000 KT of carbon emissions per year. It’s a permanent effort we are making.” he added.
On the sidelines of the UN General Assembly meeting this year, Angola and Zambia signed a concession agreement with the Africa Finance Corporation (AFC) for the infrastructure solutions provider to connect railway lines in both countries, in a deal that perhaps best illustrates the ongoing tussle for dominance in the electric vehicle (EV) revolution.
The rail line is a much needed extension of the Benguela Railway Line which runs through Angola from West to East, connects to Tenke in the Democratic Republic of Congo (DRC), and to the Cape to Cairo Railway.
“It will offer the shortest route for export and imports, linking key mining regions, agricultural clusters and businesses in Zambia and DRC to the Port of Lobito. It will significantly facilitate the movement of cargo from the Copperbelt and Northwestern Provinces, through Angola to the Western markets,” the AFC added in a statement.
Just days later, the African Development Bank promised to provide $160mn to help Angola plug budget holes over the next year.
The decision was made during a meeting between AfDB head Dr. Akinwumi Adesina and Angola’s President João Manuel Lourenço on Friday 20th September in Luanda.The budget support will go into economic reforms which “include diversifying away from oil, promoting private sector, tackling the country’s debt burden, reduce poverty, achieving food and energy security, and creating youth employment.”Angola adds about 550,000 new workers annually, and more than 40% of its 35 million youth are unemployed.Why Biden’s Visit Matters“On October 13-15, President Biden will travel to Luanda, Angola, where he will meet with President João Lourenço of Angola to discuss increased collaboration on shared priorities, including bolstering our economic partnerships that keep our companies competitive and protect workers; celebrating a signature project of the G7’s Partnership for Global Infrastructure and Investment (PGI), which advances our joint vision for Africa’s first trans-continental open-access rail network that starts in Lobito and ultimately will connect the Atlantic Ocean to the Indian Ocean; strengthening democracy and civic engagement; intensifying action on climate security and the clean energy transition; and enhancing peace and security.
White House statement, September 24, 2024In mid-2023, the Lobito Atlantic Railway, a company owned by Trafigura(Singapore) Mota Engil (Portugal) and Vecturis SA (Belgium) signed a three-decade concession to run the Benguela Rail Line. A year later, a bulk cargo vessel named MV Lindsaylou, carrying sulphur meant for the DRC, was the first to dock at the Port of Lobito under the joint venture that saw the cargo transported through the Benguela Railway.
The JV has promised to spend US$450mn on the Angola side of the railway, and US$100mn on the DRC side.
Seen simply, Washington and Beijing are making pragmatic choices about which side of Africa to put their investments in. Each is choosing the ocean that offers the shortest route to them: for Washington, the Atlantic; for Beijing, the Indian Ocean. The economic benefits to the countries’ the existing lines pass through may not extend past construction, but the cargo transported to the ports has ramifications at a global scale. It’ll also create alternative routes to the sea for Kinshasa and Lusaka, hopefully cheaper ones, for much needed imports.
