Accessing a $1 billion market : The renewable energy investment opportunity in the DRC
The DRC, with its vast territory, has one of the lowest rates of access to electricity in in the world. Less than 2% of the rural population has grid access and even in urban areas, only around one quarter of households have a mains electricity supply. Off-grid systems and the technology needed to make them available to the poorest households have reached a tipping point in the last five years. In contrast, extending the coverage of the national electricity grid would take decades and require massive investment.
The total market for efficient, decentralised energy supply is estimated to be in the region of $1 billion per year. This conference, organised by the Congolese Association for Renewable and Decentralised Energy, ACERD, in partnership with the ÉLAN RDC programme, will explore how investors, government and development partners can unlock the full potential of this market.
Solar power for the people
The under-development of the electricity grid creates opportunities for mini-grid, off-grid and solar home system supply in most regions of the country. In only a few urban areas is the electricity access rate above 20%. In the countryside, only around 1% of the population has access to the public supply.
The vast size of the DRC and the fragmented nature of the current grid is a major obstacle to the expansion of electricity access. There are three networks: the western grid (covering the provinces of Central Congo and Kinshasa), the eastern grid (covering North and South Kivu) and the southern grid (covering Haut Katanga and Lualaba provinces). The Inga-Kolwezi link connects the western and southern grids. Some 50 million people are beyond the reach of the grid, thus creating huge potential for the off-grid solar market.
The market potential for mini-grid and off-grid systems is estimated at US$ 921 million per year. Yet households’ use of off-grid solar products remains low. The main purchasers of these systems are religious communities, health centres, financial institutions and other large organizations. Many rural households without grid access still rely on unsafe and expensive technologies such as kerosene lamps, batteries or candles for lighting. Replacement of these with a high-quality solar lighting system generates typical household savings of $6-10 per month.
At present, the market for household off-grid products is dominated by informal street vendors, despite the presence in the DRC of manufacturers and distributors of efficient and high-quality products. Informal sellers usually sell cheap, poor quality LED rechargeable lamps, with short lifetimes.
The geography of the DRC makes solar off-grid products an excellent option to meet household lighting needs. Because of the significant capital cost of solar systems, however, the majority of consumers need to buy the systems on credit, either through a bank loan or via a Pay-as-you-go arrangement. Both of these approaches require access to substantial capital, from either public-sector support to the market or private-sector investment.
Improved cook stoves for an improved environment
At the moment, more than 96% of the population of the DRC uses wood and charcoal for cooking. This is causing significant deforestation. There is very little use of improved cookstoves (ICS), which results in high fuel consumption, poor interior air quality and heavy time costs.
Although awareness of the economic and health benefits of ICS is growing, adoption by households remains low. The purchase price is beyond the means of most families and many of the products on the market are of low quality and performance, which has damaged the reputation of sector. There are, however, high quality products available with proven performance advantages over conventional cookstoves. A study in Kinshasa for Elan RDC found two main benefits from the use of ICS. Fuel costs were significantly reduced – by approximately $10 per month on average – and the length of time spent cooking was reduced by almost one-half.
The barriers to growth of this market are similar to those affecting solar lighting – high levels of informality in the market, many products of low quality, limited purchasing power of consumers. Higher quality standards and greater access to appropriate credit can help to boost market development, for the benefit of consumers and the wider economy.
A bright future
There is still a long way to go before the DRC can provide modern, effective and healthy heating and lighting to its entire population, especially in the most remote corners. One part of the strategy to achieve these ends is to exploit the potential for hydroelectricity contained in the Congo River. The other part is to support the development of smaller-scale, distributed systems for cooking and lighting.
 Source: Mini Grid Market Opportunity Assessment: Democratic Republic of the Congo. African Development Bank, July 2017
 Source: ELAN RDC Survey