A PRODUCTIVE VISIT BY LULA

C O N F I D E N T I A L SECTION 01 OF 02 LUANDA 001116 SIPDIS SIPDIS E.O. 12958: DECL: 10/29/2017 TAGS: PGOV PREL ECIN ENRG SUBJECT: A PRODUCTIVE VISIT BY LULA Classified By: CDA FRANCISCO FERNANDEZ FOR REASONS 1.4 (B) AND (D) ¶1. (U) SUMMARY: Brazilian President Luis Ignacio da Silva's high-profile state visit on October 17 and 18, 2007 resulted in seven new technical assistance accords, the doubling of Brazil's credit line to Angola (to USD 2.3 billion) and the announcement of a business deal to build a sugarcane-based ethanol plant. Lula took advantage of the visit to thank Angola for its continued support of Brazil's efforts to obtain a permanent seat on the UN Security Council. END SUMMARY Old History, New Partnerships -------------- ¶2. (U) Hailing shared history, blood, and language ties, Brazilian President Luis Ignacio da Silva laid the groundwork for ever-stronger economic and diplomatic ties with Angola during a two-day state visit. During the visit, da Silva announced a USD 1 billion increase to Brazil's USD 1.3 billion credit line to Angola. Use of the credit line is restricted to national reconstruction projects, and bids must include some Brazilian goods and services. ¶3. (U) da Silva also announced expanded technical assistance to Angola, signing a malaria control initiative and four education-related accords. The malaria initiative includes capacity-building and train the trainer programs for lab technicians and doctors, and assistance with Angola's malaria epidemiological monitoring system. Under the "School for All" initiative, Angolan Ministry of Education officials will learn special education techniques and theory from Brazilian officials, and teachers will have an opportunity to learn Brazilian sign language. Three other education accords focused on curriculum reform, training for primary school teachers, and an expansion of opportunities to study science at Brazilian universities. ¶4. (C) On the diplomatic front, the two countries agreed to regular, formal discussions of bi-lateral issues and strengthened cooperation between their diplomatic academies. The Brazilian embassy in Luanda reported that the GRA's desire for technical assistance, exchange programs, and other educational opportunities was far greater than Brazil was willing or able to support, since much of Brazil's assistance along these lines is already dedicated to their South American neighbors. Angola's lack of human capacity was noted as a stumbling block by the Brazilians; for example, embassy sources reported there are more available slots to attend Brazilian universities than qualified Angolan students to fill them. Biofuels and Alternative Generation -------------- ¶5. (U) Though not a government-government agreement, da Silva's visit helped conclude a deal between Brazilian construction giant Odebrecht, Angolan oil parastatal Sonangal, and Damer, a previously unknown Angolan company, to build a biofuel plant in Malange Province. Plans include the construction of a plant capable of producing not only ethanol for export but generating 140 megawatts of electricity per year through the burning of bagasse. The bagasse and ethanol will be prdoced from sugarcane, a new crop for the region. The project is expected to generate 2,000 new jobs. ¶6. (C) The deal, billed in the press as an agreement between Sonogal and Odebrecht, allocates a 40 percent stake to Odebrecht, 20 percent to Sonangol, and the remaining 40 percent to Damer. Brazilian embassy sources stated Odebrecht was "evasive" when questioned about Damer, while other sources report that Damer is connected to Angolan President dos Santos, who reportedly also owns the 30,000 hectares of undeveloped land allocated to the venture. Ties That Bind -------------- ¶7. (C) According to Brazilian embassy sources, President da Silva,s visit - his second to Angola - wasn't originally on the docket for this African tour; but, hard lobbying on the importance of this bi-lateral relationship by the Brazilian ambassador and Foreign Ministry forced a change of plans. Dos Santos will now reportedly travel to Brazil in early November to participate in program aimed at highlighting Angola for Brazilian audiences in Rio de Janeiro. He is also expected to make an official state visit in the first quarter of 2008. While much of Brazil's Africa-policy is based on catering to Brazilians of African descent and their cultural connection to Africa, Angola is specifically targeted for its potential to develop into one of the continent's prime markets for Brazilian goods and services. This point was LUANDA 00001116 002 OF 002 underscored by press reports of an 80 percent increase in trade between the two countries in 2007. While Brazilian embassy sources caution this sudden increase may be due in part to past miscalculations of the trade balance, there is little doubt that the Brazilian business community is thriving in Angola. ¶8. (C) COMMENT: Angola sees Brazil as a natural partner, and many of Angola's leading businessmen, including members of the Dos Santos clan, reportedly have substantial business holdings in Brazil. Large Brazilian construction firms are also benefiting from Angola's construction boom. Given their shared history and common language, these business ties will only deepen. The Brazilians also see investment in Angola's infrastructure, especially that linking it to the rest of SADC, as a wise investment and a potential entry for them to the rest of the Southern African market. END COMMENT. FERNANDEZ