EDEL: A Successful Electricity Company in Angola

Angola is located in southwest Africa and has the highest potential economic growth of any country on the continent. Angola’s electricity is sold and distributed by Empresa de Electricidade de Luanda (EDEL), a state-owned enterprise. As the strategic partner of EDEL, ZTE has contributed to the development of electricity in Angola, and the cooperation between the two companies has been emulated within other government sectors. ZTE Technologies interviewed Helder de Jesus Garcia Adao, board chairman of EDEL. He talked about the current state of Angola’s electricity sector, the challenges associated with large electricity projects, and the overall objective of EDEL.

Q: Could you introduce EDEL?

A: EDEL is dedicated to electric power distribution and operates in the capital Luanda. EDEL was founded in 1982 and is derived from two former companies: LAI and SEMAIS. The merger of these two companies gave rise to EDEL, which has been growing fast in terms of infrastructure and number of clients in recent years. With the end of the war, Angola has experienced rapid development. Now we live in a time of reform and transformation. This means companies will be reformed and structured, and we are prepared for this new stage. We currently have around 1,215 workers and 550,000 clients. Our greatest challenge is the electrification of areas where we hold a concession (i.e., Luanda and Bengo). In these provinces, there are many virgin, non-electrified areas. The city has recorded large growth in housing over the past 10 years in all directions; so this is a great challenge for our current business. We also have other challenges, such as repairing and rehabilitating the network in areas that already have electricity. We have put a lot into training our technicians to upgrade the network. In recent years, we have undertaken various projects to expand and develop power supplies, and we have extended partnerships with various companies.

Q: What is the current state of Angola’s power sector?

A: Electricity production is lower than demand. All the equipment we have available is being used to full capacity, and we do not have any equipment in reserve. There is a lot of pent-up demand for electricity, including infrastructure projects that have been defined by the government. The first phase in the government’s electricity infrastructure program will run from 2013 to 2017. The large projects will be concluded by 2017, and this will help satisfy the demand. With these infrastructure projects underway, the supply curve is expected to gradually match the demand curve.  

Q: What are the challenges associated with large electricity projects in Angola?  

A: Training and expertise is a challenge. We need to train our technicians how to operate the new hydroelectric plants, Kaculo and Lauca, as well as the combined cycle plant in Soyo and second plant in Cambambe. Safety is also a big part of the necessary training. Staff will be trained, but we have done this before in past projects, such as construction of the Capanda substation, which was completed successfully and still being operated by our local staff.

Q: ZTE entered Angola in 2003 and started a partnership with EDEL in 2012. At the end of 2012, EDEL and ZTE signed the first contract for supply and installation of prepaid services. What do you think about ZTE’s cooperation with EDEL so far?

A: ZTE had no references, so we had to make a wager that the partnership would turn out ok. The only background we had on ZTE was its partnership with Angola Telecom. The project with ZTE has been going well apart from a few timing issues. In general, we are pleased with the work ZTE has done and this partnership overall. We are almost in the final stages of the projects we have undertaken together, and ZTE has left us with a good impression. This assures us that we can invest in the partnership for new projects. Of course, there are some details that require further attention from ZTE, but in general, we are very satisfied and want ZTE to be a big partner. We can count on ZTE in the near future.  

Q: What has been ZTE’s contribution to energy development in Angola? Beyond the power sector, what other areas can ZTE contribute in? 

A: ZTE has a lot of potential; it is a multinational company with good technology. We can explore what we want in coming years and see how ZTE might be able to help us in different areas, particularly in telecommunication, information, and IT technologies. We are also thinking about maintaining this connection with prepay, and how we can test this partnership in other areas or sectors so we can deepen this relationship between the two companies.   

Q: Will the partnership with ZTE be emulated within other corporate or government sectors in Angola?   

A: Yes, certainly. ZTE already has a relationship with Angola Telecom and ENE. This means that in the medium-term, other doors could open for ZTE in other sectors of the Angolan economy.  

Q: Why is Angola transforming large electricity companies such as EDEL, GAMEK and ENE? 

A: The objective is to make these companies as efficient as they can possibly be. Currently, these companies still depend on the state, which is the largest investor in the sector and subsidizes energy. Tariffs need to be adjusted to become closer to real market price. The real overall objective is to make these companies more efficient and less dependent on the government.  

Q: Will this transformation affect the relations with ZTE and other companies? 

A: The main objective of transforming the sector is to create a company dedicated to each segment within the value chain. That is the main focus of the transformation. Any of these companies that rise within the scope of this transformation will always need partnerships with companies. During the current transformation, companies will need this relationship or partnership with partners. In this respect, a change is also needed in electricity laws so that they permit the participation of many private-sector companies. At present, the tendency is for very restricted relationships with private companies. 

Q: What is EDEL’s objective for the next five years?   

A: The future distribution company has to further the objectives of the whole reform process so that companies within the electricity sector become more efficient. EDEL must also formulate strategic objectives where the challenges remain the same. One of these objectives involves expanding electrification to secure access to energy for the largest number of clients. This is defined in the government program for 2017, including 600,000 new connections or 600,000 new clients in Luanda between 2013 and 2017. We predict that a future distribution company will have more than 1,000,000 clients in the rest of the country by 2017. Electrification is a big challenge, but there are also other important challenges. The most important responsibility of the distribution company is to maintain the sustainability of the sector because the company is in the last segment of the chain that aims to assure stability of the sector.