Rural electrification project that will supply sustainable energy to almost 1 million Angolans.
Angola has a target to increase the national electrification rate to 60% by 2025. Rural electrification is an important part of Angola’s strategy to diversify its energy mix. Additionally, it also helps in social inclusion, which aims to promote the human capital development and well-being of Angolans.
A new rural solar project in Angola will provide sustainable electrification to 1 million people across the provinces of Moxico, Lunda Norte, Lunda Sul Bié and Malanje (source: MCA Group), and who were not previously connected to the national grid.
The project comprises; 48 hybrid photovoltaic generation systems with energy storage in lithium-ion batteries (“mini grids“) that will operate autonomously without recourse to diesel generation; expansion and hybridisation; construction of medium/low voltage distribution networks and the supply and installation of a total of 202,657 prepaid meters for households.
Standard Chartered was selected by the Ministry of Finance of Angola based on our proven ability in structuring large Export Credit Agency (ECA) supported financing for renewable energy and infrastructure projects and for our strong track record in the country. The ECA partner is Germany based Euler Hermes. The development, procurement, engineering, construction and project management of the project was led by MCA (a consortium of MCA Deutschland GmbH and M. Couto Alves Vias, S.A).
Standard Chartered’s role
Standard Chartered acted as the ECA co-ordinator and structuring bank, sole bookrunner and mandated lead arranger of EUR1.29 billion of financing for the solar project.
Standard Chartered has structured the financing package to include two facilities; A Euler Hermes supported facility for EUR 1.2 billion and the remaining EUR 0.09bn as a commercial loan. Furthermore, the funding is also structured to help meet eight of the UN’s Sustainable Development Goals, and also align to environmental and social risk-management best practices.
The project is expected to have a significant positive impact on the local energy mix. According to MCA estimates the project (as an alternative to extending the state grid or installing diesel generators as the main source of electricity) can save up to 7.9 megatonnes of CO2e and EUR 5.9 billion over a 20-year period (source: MCA Group).
Edna Schöne, Executive Board Member Euler Hermes commented, “Thanks to this project, one million Angolans can be supplied with electrical power from renewable sources. We are grateful that we, as the ECA (“Export Credit Agency”) are able to support MCA as EPC (“engineering, procurement and construction”) contractor. Many German SMEs involved in this project as subcontractors of MCA are supported by the German government through the granting of export credit guarantees, thus ensuring the transfer of climate-friendly, efficient technologies. The Rural electrification project therefore meets an important objective: Expanding the use of renewable energies on an international level.”
Manuel Couto Alves, Executive Chairman and Founder, MCA Group also commented, “For MCA Group, it is most inspiring to be part of projects that help shape the future of communities and countries. We take particular care in helping our generation and those to come to have a brighter planet and a cleaner nature by using natural energy sources. We truly aim at empowering lives for generations.”
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