ICBC provides $180 million for 36MW Luachimo Hydroelectric Power Plant Construction Project

Project narrative

In 2013, the Government of Angola and the Industrial and Commercial Bank of China (ICBC) signed a $180 million loan agreement for the 36MW Luachimo Hydroelectric Power Plant Construction Project. The borrowing terms of this loan are unknown. However, it is known that the borrower was expected to use the proceeds of the loan to finance approximately 85% of the cost of a $210 commercial contract between Angola’s Ministry of Energy and Water and China Gezhouba Group Company ltd. (CGGC), which was approved through a Presidential Order issued by Angola's then president Jose Eduardo dos Santos on September 27, 2013. The purpose of the project is to increase the power generation capacity of the existing Luachimo Hydroelectric Power Plant from 8 MW to 36 MW and rehabilitate 9 defunct substations. The Luachimo dam is located on the Luachimo River, near Dundo village in Lunda-Sul Province and was originally built in the 1950s. The geographical coordinates of Luachimo Hydroelectric Power Station are: 07°21'47.0"S, 20°50'36.0"E (Latitude:-7.363056; Longitude:20.843333). Upon completion, the Luachimo hydroelectric power plant is expected to to provide power for 10,000 households in the region. CGGC is the general EPC contractor responsible for project implementation. However, a Portuguese company (COBA) was contracted in 2014 to prepare the implementation of the project and provide technical assistance related to the dam’s electromechanical and electrical equipment. Another company called EFACEC received a $83 million contract in 2014 for supplying generating equipment from CGGC’s subcontractor, NIARA Power. On October 13, 2016, a formal groundbreaking ceremony took place. Commercial operation of the new hydropower plant was originally scheduled scheduled to start in June 2019. However, as of August 2020, the project had only achieved a 60% completion rate. The power plant was officially inaugurated on May 17, 2024. This project has also become a source of local controversy. In 2017, Maka Angola revealed the identity of the alleged owner of NIARA Power and EFACEC. The article claimed that the daughter Jose Eduardo Dos Santos, Isabel Dos Santos, was the majority shareholder in EFACEC and the owner of NIARA Power’s parent company (Niara Holdings).