Voith Hydro Group: SEK finances major expansion of sustainable energy in Angola
In November 2012, Voith Hydro Group secured an order relating to the expansion of the Cambambe dam in Angola.
Voith Hydro’s contract to supply generators and turbines for a new power station is worth over EUR 100 million in total.
Voith Hydro in Västerås provides generators, project management and automation systems. It is one of the Nordic region’s leading suppliers of hydroelectric generators and has been a jointly-owned company in the Voith Hydro Group since 2006. The company became a wholly-owned subsidiary at the start of 2013.
Financing for the project was finalized in summer 2013. SEK has financed a large proportion of the Group’s deliveries for the project via an export credit guaranteed by Euler Hermes and structured by Voith Financial Services GmbH. The arranging banks were HSBC and Société Générale. The extent of the Swedish deliveries justifies financing at commercial interest reference rates.
“This is an excellent way of promoting the export of sustainable Swedish technology to Angola, which like many African countries greatly needs to expand its domestic electricity production and distribution. Just 30% of the population in Angola today have access to electricity.
The project in Angola means that Voith Hydro will supply and install four generators and turbines, along with control systems and other related systems. The new hydroelectric power station will be built right next to the existing plant, to make use of the infrastructure that is already available. The expansion of the hydropower station will double Angola’s hydroelectric capacity, helping to fulfill the country’s ambition to increase the proportion of electricity produced from renewable energy sources.
“Our equipment will contribute to sustainable economic development in Angola,” said Voith Hydro’s President and CEO, Roland Münch.
The project is being implemented by renovating a 70-metre high hydroelectric dam on the Kwanza River, 180 km south-east of Angola’s capital, Luanda. The dam was built in 1964 and is 300 meters long. Its existing power station has four turbines, which were renovated by Voith Hydro as part of phase one of the expansion project. During phase two, an additional generator hall will be built, including four turbines. In phase three, the height of the dam will be raised by 30 meters to a total of 102 meters. At this point the dam will cover an area of 5.5 square kilometers as opposed to the previous 1.3 square kilometers. Capacity for the four generators and turbines will total more than 700 MW.
SEK has classified the expansion as an A Project, which means that it is a project with a potentially significant environmental and/or social impact. It has therefore undergone an extensive social and environmental review. SEK has concluded that the project has a relatively small impact on the environment, as the area that will be laid under water is mostly used for fishing, water supplies, recreation, etc.
SEK’s sustainability impact assessment has been supplemented with updated assessments by South African consultancy firm SRK Consulting. A group of representatives from HSBC bank, MIGA and Euler Hermes has examined the project on site. An Environmental and Social Action Plan (ESAP) has been drawn up containing mandatory and proposed measures to mitigate the sustainability risks associated with the project. An independent consultant will conduct annual checks to ensure that the ESAP measures are implemented and reported to the relevant financiers.
“Our equipment will contribute to sustainable economic development in Angola”
Roland Münch, President and CEO at Voith Hydro