Angola’s finance ministry and Standard Chartered have closed a €1.29bn deal backed by Germany’s export credit agency (ECA) to finance the construction of photovoltaic electricity distribution infrastructure.

The transaction, which is the latest of several the bank has led for the Southern African country, will support an electrification project that is being developed by the Angolan energy and water ministry. It is expected to benefit approximately 203,000 households in 60 communities.

The dual-tranche facility is made up of a €1.2bn Euler Hermes-supported secured term loan and a €92mn commercial term loan. Standard Chartered acted as sole bookrunner, original lender, facility agent, structuring bank and mandated lead arranger across the entire deal, while Afreximbank came in as mandated lead arranger on the commercial tranche.

The project is managed by Portuguese engineering and technology contractor MCA Group. It will see the building of 48 hybrid photovoltaic generation and energy storage systems that will provide access to 100% renewable electricity for communities not connected to the national electricity grid. It also includes the expansion of the national grid in Malanje, to the northwest of the country, and the building of new lines and networks connecting other municipalities.

Standard Chartered says it structured the financing to help meet eight of the United Nations’ Sustainable Development Goals and align to environmental and social risk management international best practices. It adds that the installation of the new electricity network can save up to 7.9 million tonnes of CO2 emissions.

“This project is not only of crucial importance for Angola and sub-Saharan Africa but helps to reduce greenhouse gas emissions,” says Edna Schöne, executive board member at Euler Hermes. “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.”

The electrification project is part of a wide-ranging infrastructure development push in Angola, which initially began in 2002 to address the devastation left by the country’s almost three-decade-long civil war.

Recently, the Angolan government has signed a flurry of large deals, several of which have been financed by Standard Chartered. These include a landmark US$1.1bn transaction in September 2021 to develop critical water supply infrastructure in the country, as well as two Euler Hermes-supported deals worth a total of €238mn to support the country’s agricultural industry and transport network, closed in 2022. This year, the bank provided a UK Export Finance-backed social loan of €149mn for the construction of a hospital in Kilamba, a large residential area just outside the capital city of Luanda.

So far in 2023, the government has also tapped Investec and UniCredit for a €225mn ECA-backed loan to finance the building of three hospitals, and landed two loans from Deutsche Bank – the first to build a large-scale automated agri-food production facility, and the second to support the construction and rehabilitation of one of the country’s most crucial road transport arteries.