Angolan President João Lourenço’s lofty goal to clean up deep-rooted corruption faces a major hurdle, as the country has become embroiled in a dispute between General Electric and the Angolan-registered power producer Aenergy, owned by Portuguese businessman Ricardo Leitão Machado. Potential sanctions of up to $550 million are at play, the remainder of a US$1.1 billion credit line General Electric established with Lourenço’s predecessor, Jose Eduardo dos Santos, to boost Angola’s electricity production via twelve turbines spread over thirteen separate contracts.
Aenergy was to act as the local contractor responsible for constructing the turbines and furnishing material from General Electric. However, a dispute regarding the payment of four of the turbines, valued at about US$120 million, resulted in a delay of the project’s implementation and a falling-out between Aenergy and the Angolan government.
When Lourenço assumed office, he began revisiting contracts granted by his predecessor, leading him to eventually cancel via presidential decree all thirteen contracts after negotiations for the four turbines fell through.
General Electric is seeking to recuperate its investments
Aenergy is accusing the Angolan government of engaging in fraudulent behavior, and General Electric is seeking to recuperate its investments, placing the company in the position of a tendentious ally with Angola during the ongoing civil liability proceedings.