ANGOLA BBW2 10 pages.qxd 10/5/11 17:11 Página 1 ANGOLA

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Over the past decade, the Republic of Angola has emergedas the fastest-growing economy in the world. Registeringan impressive annual GDP growth of 11.5% for the peri-od 2000-2010, Angola trumped even the much-vaunted

BRICs and emerging Asian economies to claim the top spot in ananalysis published by The Economist. This result comes in spite of aflatlining in Angola’s 2009 GDP, due to the republic’s heavy depen-dence on oil revenues as global petroleum prices fell sharply.Nevertheless, the Angolan economy rebounded in 2010 and last year’sGDP reached 5.9%.

Revenues from oil and diamond exports have also helped fuel Angola’sextraordinary development since peace was established in 2002, and thegovernment has reiterated its drive to further diversify an economy thatrelies on oil production and its supporting activities for about 85% of itsGDP. Diamond exports have contributed an additional 5% in recent years.In addition to diamonds, the republic’s soils also hold untapped copper,iron ore and phosphates, among others.

In March, Angola’s Ministry of Economy projected that the national econ-omy would grow at least 7% in 2011, with the oil sector contributing 2.5%and other sectors making up the difference. Opportunities in those othersectors exist across the board. The third-largest country in sub-Saharan Africa,Angola possesses extensive oil and gas resources, diamond and mineralwealth, hydroelectric potential and rich agricultural land.

An $18 billion government plan to overhaul the country’s dams and pow-er grids and prevent all power cuts by 2016 will act as a catalyst in theenergy sector and spur further enterprise elsewhere.

Last year, Angola was the largest supplier of petroleum to China, sup-

An abundance of energy resources, includingoil derivatives, considerable hydroelectricpotential, huge reserves of natural gas, andvast, fertile territory for agriculture powerone of Africa’s brightest stars

plying 19% of the market. Angola’s plans to cut its dependence on oil rev-enues could see relations improve further, with China seeing potential inagriculture, service industries, infrastructure and renewable energy.

In 2010, Angola’s parliament approved a new constitution and PresidentJose Eduardo dos Santos also gave his first State of the Nation address inNovember. During the fully televised speech, the president acknowledgedthe challenges of hunger and poverty the nation faces. A month prior, theUnited Nations’ resident coordinator in Angola, Koen Vanormelingen, saidthat poverty levels in Angola, measured in monetary income, had decreasedfrom 63% in 2002 to 38% in 2009. He added that the country is headedtoward a secure way to achieving the UN Millennium Development Goals,given its advances in peace, economic growth and social development. �

President Jose Eduardo dos Santos is moving the nation toward amore diversified economy

ANGOLAA striking natural phenomenon

This supplement was produced by VISTA REPORTS: 100 Pall Mall, St. James, London SW1Y 5NQ Tel: +44 (0) 20 7664 8655, E-mail: [email protected], www.vista-reports.com - PROJECT: Joel Malo, Saturnino Izquierdo and Fatima Ruiz

Part 2

Part 1 of our series on Angola is available online at:www.vista-reports.com/services

ANGOLA BBW2 10 pages.qxd 10/5/11 17:11 Página 1

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BESA’s green bankingWhen UNESCO named BancoEspirito Santo Angola (BESA) “Bankof the Planet” in 2009, it was inrecognition of the bank’s achieve-ments as well as a sign of positivethings to come.BESA goes above and beyond thecall of an ordinary financial institu-tion, involving itself in sustainabledevelopment and environmentalissues by financing groundbreakingprojects from a grassroots to themost multinational level as only aworld-class bank can.For example, BESA has become apioneer in the concept of greenbanking. Along with the AngolanDevelopment Bank (BFA) and theAfrican Investment Bank (BAI),BESA has funded BioCom, theBioenergy Company of Angola,which focuses on the production of

sugar and ethanol in the Cacusoregion. BioCom, a joint venturebetween parastatal oil and gascompany Sonangol, Angola-basedcompany Damer, and Brazilian firmOdebrecth, is expected to generate30 million liters of ethanol, 250tons of sugar, and 160,000 MWh of

electricity peryear.Behind BESA’sinvolvement inenvironmentaland corporatesocial responsi-bility issues is its

CEO, Alvaro Sobrinho, who, since2007, has spearheaded the bank’sfinancial and strategic initiatives toshare the concept of sustainabledevelopment throughout BESA,Angola and the world.To better concentrate on each ofthe bank’s varied interests, its

activities are divided into four pil-lars: economy (BESA), social (BESASocial), cultural and scientific (BESACultura) and environment (BESAEnvironment). This last realm iswhere the bank caught the atten-tion of UNESCO, which described itas “the banking institution thatmost stands out for its support ofspreading the message of environ-mental protection andsustainability.”Collaborating closely with theAngolan Ministry of Environment,BESA produces special environ-mental education kits—includingbooks, activity sheets and a CD—that, in the first phase, were dis-tributed among schools in theprovinces of Luanda, Huambo andHuila. The idea now is to take thisproject to the entire country.

The road to diversification

Angola’s economy faces a conundrum, particularly in its agricul-tural sector, where nearly 85% of what is consumed must beimported. Food self-sufficiency certainly counts for a lot interms of sustainable development, yet cash crops for export

can bring in the revenues needed to further fuel the agro-industrial sec-tor. Thus the question: should the focus be on fast results and economicgain? Or long-term benefits and well-being?

“The sectors of agriculture and fisheries have a significant importance,not only for their agro-ecological and economic potential, but also for thesocial role they play in the segment of the population depending onthem,” says Minister of Agriculture Afonso Pedro Canga. Of the country’s3.7 million hectares of irrigable land, only 3.5% is being utilized. This rep-

resents a huge opportunity for investors.Experts put their money on small farm-

ers and on public-private partnerships(PPPs) to produce enough for nationalconsumption, and at a cost below thatof imports. So far this combination hasdone rather well in corn, cornmeal, sweetpotatoes, legumes and coffee, which alsoyields enough for export. Yet Angola stillrelies on imports of basic foodstuffs, suchas wheat, rice, dairy and meat. As for cash

crops, Angola has had growing success with sugarcane plantations. Besidessugar, this crop lends itself to other lucrative uses, such as ethanol.

Before independence in 1975, Angola was self-sufficient in all cropsexcept wheat. It annually produced 220,000 tons of coffee; in 2009, just15,000 tons were produced, but a five-year plan is in place to raise pro-duction to a quarter of the pre-war glory days. “Our goal is to becomeself-sufficient in food production and we have potential to do so,” saysDr. Carlos Aires da Fonseca Panzo, national director of macroeconomicmanagement monitoring at the Ministry of Economic Coordination. �

Angola’s agriculture sector grew 29% in 2009, entering a new stage and becoming a key priorityon the government’s agenda in diversifying the nation’s oil- and diamond-based economy

Water, the next oil With 47 watersheds and thelargest water-flow rate inAfrica, Angola’s powerfulrivers hold the potential togenerate 18 GW of energy.Moreover, in light of theresources available, it is possible to build 150 mini-hydroelectric plants, with aproduction capacity close to 2 MW. Capanda Dam, the

country’s most importanthydroelectric producer andlargest ever civil constructionproject, lies on the KwanzaRiver in Malanje Province.Capanda’s four turbines eachproduce 130 MW, and repre-sent the first major steptowards producing and sup-plying electricity to all ofAngola.

“Agriculture willbe the basis of the economy, and industry thedecisive factor.” Agostinho Neto (1922-1979)First President of Angola

AlvaroSobrinho, CEO of BancoEspirito SantoAngola (BESA)

Before 1975, Angola was the world’s fourth-largest coffee exporter

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BESA. OFFICIAL BANK OF THE PLANET EARTH-UNESCO

HONOUR AWARDED BY UNESCO.United Nations Educational, Scientific and Cultural Organisation.


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A time for healing and growingAldeia Nova is a visionary project with a twofold mission: to afford displaced Angolans jobs,and to boost the country’s agricultural backbone

The 27 years of civil war in Angola that ended with a cease-fire in 2002 left the nation divided and crippled. Thousandsof families were left homeless, infrastructure was destroyed,and the countryside that had served as the breadbasket of

southern Africa was littered with landmines. In a mass exodus, farm-ers abandoned their dangerous lands in search of opportunities inthe cities, causing overpopulation in urban areas.

In 2004, President Jose Eduardo dos Santos launched ProjectosAldeia Nova (PAN), a pilot project to combat over-urbanization whilerebuilding Angola’s formereconomic strength: agricul-ture.

Portuguese for “new vil-lage,” PAN kicked off in CelaDistrict, part of the WakoKungo municipality ofKwanza-Sul Province. Some800 families—from both war-ring parties, the Armed Forcesof Angola and the NationalUnion for the TotalIndependence of Angola—were welcomed to newly con-structed settlements inunder-populated rural areaswhere they were given shel-ter and jobs, and reintegratedinto a new, peaceful socialenvironment.

Jose Cerqueira, projectdirector at PAN, says, “It isnecessary to create the conditions so that there are small towns infertile regions, so that people can work in agriculture and have thebenefits of the city.”

Little by little, the project recovered agricultural fields and built infra-structure, including schools and health centers. PAN, which was handedover to the Angolan government in February 2008, spurred the devel-opment of small enterprises and modern agricultural factories, whilecomplementary facilities, such as banks and hotels, began springingup in the area. Such is PAN’s success that there are plans to export themodel to other provinces, specifically Lunda Norte and Malanje.

Currently, PAN’s products, which come from the Social AgricultureProject Aldeia Nova, consist of sugar, grains, eggs, milk and milk prod-ucts, and cow, chicken and pork meat, among others. However, AldeiaNova’s biggest bets are on their sugarcane plantation project calledProCana. “I think the product that could make a major contributionto the revival of Angolan agriculture will be cane sugar to producesugar, ethanol and electricity,” explains Cerqueira. “Because it is aquick culture, you plant it today and after a year it can be harvestedand create some income. There is a big market in the world for ethanol.”

After PAN brought inexperts from the U.K., Brazil,and Portugal to conduct astudy on the Angolan sugarindustry, the project took offwith a 1,000-hectare sugar-cane nursery in Waco thatincludes varieties importedfrom Uganda and Brazil.

In recent news, PAN signeda contract for Quiminha, inthe Catete District just 43miles from Luanda. Underthe Regional and AgriculturalDevelopment Project ofQuiminha signed in January2010, PAN will produce eggs,poultry, grains and tomatoesto supply the capital city.

The next step for PAN is tofind international investorswho want to participate in

the development of new agricultural products, as well as in the trans-formation of the PAN experience into a larger segment of theagro-industrial sector that would create more employment opportu-nities and raise self-sufficiency for food. For this, PAN seeks not onlyfinancial investment but also the machinery, technology, and know-how to further promote development in the villages.

It is projects such as Aldeia Nova that are helping Angolans get backon their feet, providing them with the tools they need for their per-sonal well-being and growth, and for the socioeconomic developmentof the nation. �

PPAN is helping former soldiers and displaced families get back on their feet



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Escom, a sustainable model to followThe conglomerate is fully committed to adding value to Angola’s natural resources in asustainable manner that will bring wealth and development to the nation

Escom, one of the largest private investors in Angola, is a con-glomerate formed in 1993 by Portugal’s Espirito Santo Groupand local private investor Helder Bataglia. Escom started asa trading company and later diversified its investments to

provide continuity to its parent company’s projects in Africa, espe-cially those in Angola. “Right now, Angola is not only our main market,but also the most important part of our genetic code,” says Bataglia.“In fact our history is deeply intermingled with Angola and accom-panies its development.

“We came here in the early 1990s, but the resumption of the wargreatly affected our momentum and we had to adapt to circum-stances. In 1995, Escom began investing in sectors such as fishing,

mining and aviation, demon-strating that even during a war,we could create opportunities.When peace finally came wewere already here to contributeto the development of Angola,investing in new areas like realestate, infrastructures, oil andgas, and energy.”

Escom later opted out of avi-ation and fisheries to focus onadding value to Angola’s mostpromising natural resources. “In2003, a year after we achievedpeace, we decided to do a thor-ough restructuring,splitting Escom intofive major areas of

investment: mining, real estate, infrastructure, energy,and oil and gas,” says Bataglia.

In terms of mining, Escom has invested heavily in thediamond industry over the past 10 years. From 2001-09,the company dedicated some $430 million towarddiamond mining, and an additional $750 mil-lion has been budgeted for use in thatpursuit by the end of 2014. These signifi-cant figures represent Escom’s faith in thefuture of the sector and in the Angolaneconomy, in general.

“Today, in terms of exploration, weare the company that invests most inAfrica,” explains Bataglia. “Now wewill enter into the operational phaseof new mines, which represents theculmination of a period of several yearsof exploration and will significantlystrengthen the presence of Escom andof Angola, which will soon be one ofthe top three worldwide diamond pro-ducers.”

Supplying this optimism is the Luo minein which Escom is a partner, and which willproduce over 6 million tons of ore per year by2013, making it one of the 10 largest diamondmines in the world.

Another strategic area in which Escom is tak-

ing an active role is hydropower production. Indeed,it will be the energy produced at the Luapasso sta-tion in Lunda Norte that will supply mining areas ineastern Angola. Currently under construction, this pro-ject is being built in partnership with the NationalEnergy Company (ENE) and once the first phase iscompleted, the power will be channeled to the min-ing projects. Urban areas will benefit from furtherphases. Two other hydroelectric dams are under con-struction in Samuela and Camanenga, also in LundaNorte Province.

Escom’s investment in hydropower and mining isaccompanied by a growing interest in oil. Not longago, the company formed a partnership with theAngolan company Gema, thus acquiring a 2.5% stake

in Block 18, operated by Petrobras, and located next tothe fields where Total and BP currently operate.

The success of its Angolan operations allowed Escomto invest in infrastructure and energy in neighboring coun-tries such as Congo Brazzaville, South Africa, Mozambique

and Gabon, with the objective of becoming a regional play-er at the level of SADC and Central Africa. �

The 24-story, 102-meter Escom Building is the tallest building in Angola

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“In 2003, we decidedto do a thoroughrestructuring,splitting Escom intofive major areas ofinvestment: mining,real estate,infrastructure,energy and oil and gas.”

Helder Bataglia, Founder andChairman of Escom


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The commitment of a consortium at Luo to unearth the maximum potential of Angola’s massivekimberlite deposits is backed by major investment and combined international experience

Luo diamond mine beats challenges

Angola’s soils reportedly contain aquarter of the planet’s kimberlites,diamond-rich deposits held insubterranean volcanic formations.

In March 2003, a joint venture formed to tapthe nation’s massive kimberlite potential atthe Luo-Camatchia-Camagico diamond min-ing concession, which spans 116 square milesin the northeastern province of Lunda Norte.The Luo consortium is comprised of the state-run diamond group Endiama, two Angolanholdings called Hipergesta and Angodiam,and Escom, the mining division of Portugal’sEspirito Santo investment group.

Rugged topography and underdeveloped infrastructure are just acouple of the hurdles to accessing the five mineral-packed kimberlitepipes at Luo. Nevertheless, the venture started operations in 2005 witha $200 million initial investment and a goal of creating one of the world’slargest mining operations, generating 1,200 jobs in the process. Themine initially had a processing capacity of 1 million tons per year, butalready newer facilities have enabled the processing of 3 million tonsof diamond-bearing rock per year, with additional investments set toboost it to 10 million tons annually. The consortium has also developedtwo diamond treatment centers at the site.

“We faced many challenges but todayLuo is a reality,” says Dr. Mefira Adamou,director general of Luo. “Mining is a capital-intensive industry and to make somethingout of it takes a lot of investment. It is indeedan industry that does pay off, but it is a long-

term return. At Luo, we are not talking about profits because the projectis still in its implementation phase. To complete its construction will takeanother $500 million. Projects of this nature are the same all around theworld. The necessary capital is always around $1 billion, including machin-ery, infrastructure, etc. Costs in Angola are high because we have toimport everything.”

The Luo consortium remains extremely bullish about the outlook ofthe mine and its long-term view is also apparent in its support for thelocal community, where it has participated in the construction of schools,playgrounds and water and energy infrastructure. ■

“We faced manychallenges but todayLuo is a reality.”

Dr. Mefira Adamou, Director General of Luo


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Q&A with AntonioCarlos Sumbula,Chairman of EndiamaQ. Should the KimberleyProcess be redefined to includepotential human rightsproblems regarding thetreatment of diamondprospectors, now thattrafficking of conflictdiamonds has essentiallyceased?

A. I don’t think we need to redefineit; instead I think we should explainthat the Kimberley Process is sostrong and sustainable thatdiamonds are now all clean. Wecould talk about the rights of theprospectors, but that has nothing todo with the existence of blooddiamonds, it is instead about humanrights violations. Nevertheless, wemight need to keep explaining whatthe Kimberley Process is, so thatpeople understand it better.

Q. What is the current state ofmining projects in Angola?

A. We are still in thephase of promoting

new mines, and wewant to carry outcampaigns toattract the bigminingcompanies in

order to promote ourpotential for new projects.We have only carried outgeological surveys that cover40% of the country, whichmeans we have to bring in thebig mining companies that can

help us carry out prospectingcampaigns to identify new reservesof diamonds. We used to think thatonly the North and South Lundaprovinces had diamonds, but now itlooks like the whole country mighthave them. It is more a question ofwhich provinces don’t havediamonds! Angola has theresponsibility of communicating thisto the world.

The number of alluvial diamonds wehave found is so large, and theirquality is so good, that now we haveto find the kimberlite pipes thatproduced them. This is assuming allthe alluvial diamonds came fromkimberlite pipes. We are sure thereare lots of diamonds in Angola, sowe just need to find investors whocan help us carry out studies todetermine what our soil contains.

Q. What incentives are there to attract investors, in addition to the existence of so many kimberlite pipes in the country?

A. We have always offered verygood incentives. The fact that wehave always had investors here, evenduring the war, is a sign of that. Ourmining law has always containedincentives for investors.Now that we are at peace, the lawcan be further improved and we areworking on that right now, finishingup a mining code that will includemore attractive incentives forinvestors. The new law will be closerto other such laws around the world.

Q. Another important goal ofthe government is to add morevalue to the resources thecountry produces. Angolaalready has a facility to processsome diamonds, but whatother possibilities exist in thisarea?

A. The facility we have now is notyet adding as much value as we hadhoped; we are still working on thatto reach the level we originallyintended, and then after that to beable to process diamonds intogemstones. We are carrying out astudy to see if it would be moreprofitable to produce jewelry inAngola or to partner with a jewelrymaker in another diamond-producingcountry.

Diamonds: a glittering recoveryExceptional quality and sustainable, ethicalproduction set Angola’s diamond industry apart

Despite what many people believe, all diamonds are not the same.They have varying levels of quality, with only about 20% ofthe world’s production of diamonds being good enough foruse as gemstones. The quality of Angola’s diamonds is so high

that the proportion of gemstone quality to industrial-use quality is thereverse of normal production, with 80% of the country’s output fine enoughto be used for jewelry.

Anyone who has bought a diamond engagement ring hasprobably learned about the four C’s, the criteria that are usedto judge a gem’s quality: cut, color, clarity and carat weight.Angolan diamonds score highly on all of these criteria,making them a standard for Africa and for the whole world.

However, Angolan diamonds are not solely distinguishedby their high quality. Since the end of the country’s civilconflict in 2002, Angola’s government has been one of themain contributors to the process of ending the sale ofblood diamonds, gemstones that were sometimes minedwith slave labor and sold or traded for weapons thatfueled fighting in several parts of the continent.

Angola is the world’s fourth-biggest diamondproducer after Russia, Canada and Botswana.It is one of the members of the KimberleyProcess, an initiative that unites governments,industry players and other stakeholders to haltthe flow of conflict diamonds. The Processincludes a certification procedure that requiresits members to show that shipments of roughdiamonds are conflict-free.

Angola’s diamonds will soon be further distinguished by a change togovernment laws governing the diamond industry. The new rules willrequire mining operations to dedicate a proportion of revenue to devel-oping nearby areas, to show that the country can use its natural resourcesin a sustainable way and at the same time improve the lives of all Angolans.

Endiama (Empresa Nacional de Diamantes), the national diamondcompany, is the exclusive concessionary of mining rights in Angola. Theparastatal organization is part of the movement to establish the “Diamondof Angola” brand, which aims to help position the republic and its qual-ity diamonds as world leaders. ■

Antonio Carlos Sumbula, Chairman of Endiama


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Made in Angola

Five solid concepts form the bedrock of the“Diamonds of Angola” brand: quality, sustain-ability, commitment, assurance, and value. Ifdiamonds are forever, as the refrain goes, then

surely the effects of their production should also be ofsimilarly enduring, and beneficial, value.

Last year Angola produced 8.55 mil-lion carats of diamonds, generatingrevenue of $956 million, according toEndiama, which forecasts 9 millioncarats produced in 2011.

The Angolan diamond industry isgoing to great lengths to eradicatenegative misconceptions about thesector and to raise awareness thatthe “Diamonds of Angola” brand issynonymous with the highest interna-tional standards and meticulousquality controls.

The government, the diamond indus-try and proud Angolans alike want people to realizethat what lies behind the glitz, glamour and sparkle ofthe end product is of certified quality and guaranteedmethods of production.

Branding Angola’s diamonds will add value to the prod-uct and raise its profile in global markets, as brandedgoods carry greater margins and generate end-userdemand. Establishment of the “Diamonds of Angola”brand will also further extend the reach of the KimberleyProcess, verify that Angola’s diamonds are “conflict-

free,” guarantee that Angolandiamonds are of better quality, con-tribute to the social development ofthe region, and demonstrate that thereis concern for the environment duringthe exploration and extraction process.Furthermore, the initiative will high-light Angola as a producer of cleandiamonds where investment return inthe subsector is guaranteed.

“Diamonds of Angola” will helppeople associate Angola with a gem-stone of the finest quality in the world,and with a country that, thanks to

the vision of its president, generated the KimberleyProcess, thus becoming a pioneer in the abolishmentof trade in conflict diamonds and contributing topeace in Africa. ■

Endiama forecasts produc-tion of 9 million caratsthis year

Quality, sustainability, commitment, assurance, and value are thehallmarks of the “Diamonds of Angola” brand

DiamondSecurityCorpsOne measure the govern-ment took in 2004 to fightillegal diamond traffickingwas to set up the DiamondSecurity Corps, or CSD. Theagency oversees thesecurity of the whole chainof the diamond-producingindustry, from mines totrading houses and throughthe export process.The CSD’s goals are toensure the legal productionof diamonds, preserveAngola’s natural riches andmake sure miningoperations respect humanrights and take good careof workers. The CSDoperates autonomouslyfrom other governmentalsecurity bodies, but alsoworks closely with theNational Police andCustoms.



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ANGOLA BBW2 10 pages.qxd 10/5/11 17:11 Página 1 ANGOLA