The Export-Import Bank of the United States (EXIM) has approved a $900 million loan to the Angolan government for the development of renewable energy in the country. This historic financing is aimed at supporting the construction of two solar power plants, marking a significant step towards the expansion of clean energy in Africa.
The EXIM will provide the ground-breaking loan to Angola’s Ministry of Energy and Water to support the development of the solar project with a combined capacity of 500 MWp. The project, initially announced during the G7 summit in 2022, is a joint initiative between the Angolan government and US-based companies AfricaGlobal Schaffer and Sun Africa.
Sun Africa, having already established an office in the Angolan capital Luanda, has committed to investing $1.5 billion in the country’s water and energy sectors. The investment primarily focuses on the southern provinces of Cunene, Cuando Cubango, Huíla, and Namibe.
Reta Jo Lewis, Chairman of the Board of US EXIM Bank, said, the $900 million loan to Angola aligns with President Biden’s Global Infrastructure and Investment Partnership (GIIP) while advancing the bank’s efforts to promote clean energy exports, strengthening trade relations between the US and Africa. This move will also support US exporters and workers in facing international competition.
Furthermore, this EXIM financing falls within the framework of the ‘China and Transformational Exports Program’ (CTEP), an initiative mandated by the US Congress to assist US exporters competing with China. China currently dominates the solar market, supplying equipment across Africa and globally, with the Chinese manufacturers having equipped the largest operational and under-construction solar power plants in major African nations.
The EXIM loan will support Angola’s energy goal to reduce its dependency on hydroelectricity, which currently accounts for 56% of its installed capacity, according to PowerAfrica. The country is turning to solar energy to increase the share of renewables in the energy mix to 70% by 2025, paving the way for a more sustainable and resilient future.