Close ties with Brazil and China position Angola for future funding from BRICS bank
Angola is well positioned to receive funding from the future BRICS bank due to its close ties with Brazil and China, according to the Economist Intelligence Unit (EIU).
The recent state visit to Brazil by Angolan president, José Eduardo dos Santos, underlined the extent of the two-way relationship and in more practical terms included setting up a sixth Brazilian credit line worth USD2 billion focused on power production.
According to the Angolan government two projects have so far been earmarked to receive Brazilian funding: construction of a power plant at the Cambambe, dam in Kwanza Norte province and the Laúca hydroelectric facility, on the Kwanza River.
The Economist Intelligence Unit argues that this support is a sign of “strong economic and political ties between the two countries,” as well as “Brazil’s focus on its operations in Angola,” as well as Angola’s capacity to invest in infrastructure and “secure access to funding from a number of sources.”
A meeting between José Eduardo dos Santos and his Brazilian counterpart Dilma Roussef discussed the issue of the next BRICS (Brazil, Russia, India, China and South Africa) summit, which will take place in Brazil in July, the EIU said.
One of the topics on the meeting’s agenda was the project to launch a BRICS bank that can be used as an alternative source of funding to the World Bank and the International Monetary Fund (IMF) and which may be a new source of aid for Angola.
“Angola, which ahs string ties with China, Brazil and Russia would be an ideal candidate to receive funding from this kind of operation,” when it is set up, the EIU said.
The new credit line increase the total aid to Angola from Brazilian development bank BNDES to US$8 billion, which has allowed for construction of important infrastructure as well as bolstering the presence of large Brazilian companies in Angola.
Brazilian group Odebrecht, which has been in the country since the beginning of the 1980s, is considered to be Angola’s largest private employer.
Over the last few months Angola has secured new aid from China, the United States and Brazil, which demonstrates the interest that these powerhouses have in improving economic relations with this emerging African nation.
During a recent visit to Luanda by Chinese Prime Minister Li Keqiang, the China Export Import Bank announced new credit lines totalling US$170 million to fund reconstruction of a hydroelectric facility in Moxico province as well as an agro-industrial project in Zaire province and construction of a management training institute in Lubango.
The head of the Chinese government also pledged to donate USD28 million to fund unspecified development projects in Angola, which since 2002, according to the EIU, has received over US$10 billion in funding form China, mainly focused on infrastructure. MDT/Macauhub
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