Standard Chartered announces EUR 1.29 billion of financing for the Angolan Ministry of Finance to construct photovoltaic electricity distribution infrastructure. The new generation systems will support rural villages across the country to become more self-sufficient and less reliant on Angola’s main electricity network.
The electrification project is being developed by the Angolan Ministry of Energy and Water and benefits approximately 203,000 households (circa one million Angolans) in 60 communities[1]. These are namely the provinces of Moxico, the country’s largest province located in the East, Lunda Norte and Lunda Sul in the North East, Bié in the central part of the country and Malanje that is found in the North West.
The loan will fund 48 hybrid photovoltaic generation systems with energy storage that act as ‘mini grids’ and operate autonomously and will provide access to 100% renewable electricity[2] for communities not connected to the national electricity grid. Additionally, the financing will support the expansion of the national grid in Malanje and build new lines and networks connecting other municipalities. The installation of the new electricity network will help diversify the country’s energy mix and calculations[3] show that it can save up to 7.9 megatonnes of CO2 emissions.
Commenting on the financing deal, Claudia Conceicao, CEO, Standard Chartered Bank Angola said: “As Standard Chartered, the commitment to sustainable development and supporting communities to transition to renewable energy is reflected in our financing of the solar powered electricity infrastructure in Angola. The bank recognizes the importance of investing in clean energy infrastructure to support economic growth while protecting the environment.”
The financing is backed by German Export Credit Agency Euler Hermes[4] and the contractor MCA Group[5] is managing the construction and project management. Of the EUR 1.29 billion total, EUR 1.2 billion is supported through Euler Hermes and the remaining EUR 0.09bn is a commercial loan. Standard Chartered acted as sole Bookrunner, Original Lender, Facility Agent, Structuring Bank and Mandated Lead Arranger. The Bank structured the financing to help meet eight of the United Nations’ Sustainable Development Goals[6] and align to environmental and social risk management international best practices.
Yoshi Ichikawa, Head of Structured Export Finance for Europe, Standard Chartered Bank, said: “We are thrilled to complete the financing of this important project for the Angolan government to supply renewable energy-sourced electricity to local communities. It’s another great example of our collaboration with ECAs and contractors to deliver for our clients.”
Edna Schöne, Executive Board Member, Euler Hermes, said: “We are really proud that we, as ECA, can play a part in supporting this sustainable project with Export Credit Guarantees of the Federal Republic of Germany. This project is not only of crucial importance for Angola and sub-Saharan Africa but helps to reduce greenhouse gas emissions. We are pleased that many German small and medium-sized companies are involved in this project and will contribute to its success with their technology and know-how.”
Manuel Couto Alves, Executive Chairman and Founder, MCA, said: ““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.”
This transaction follows the recent announcement[7] of EUR 238 million of ECA-supported financing for the government of Angola to build new infrastructure, supporting the country’s agricultural industry and transport network, and EUR 149 million of Social Loan financing for the Angolan Ministry of Finance to build a new hospital in Kilamba, with a specialist burns ward[8]. In September 2021, the Bank also announced[9] US$ 1.1 billion financing to develop critical water supply infrastructure to serve the Angolan capital Luanda.
[1] Data provided by MCA Group
[2] Data provided by MCA Group
[3] Data provided by MCA Group
[4] German Export Credit Agency Euler Hermes: exportkreditgarantien.de/en
[5] https://www.mcagroup.com/
[6] These are UN SDGs One, Two, Seven, Eight, Ten, Eleven, Twelve and Thirteen
[7] https://www.sc.com/uk/2022/12/01/standard-chartered-announces-eur-238-million-of-financing-to-build-agricultural-and-transport-infrastructure-in-angola/
[8] Standard Chartered announces EUR 149 million Social Loan financing to build a new hospital in Angola | United Kingdom (sc.com)
[9] https://www.sc.com/en/feature/usd-1bn-financing-project-water-infrastructure-angola/
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