Power policy

The DRC’s power sector is still at a very early stage of growth. The vast majority of the country’s domestic power generation – some 96% – comes from hydropower, mostly from the Inga I and Inga II dams in Kongo Central province. In terms of expanding other renewable power sources, such as wind or solar, there are no auctions or tenders in place, nor a net metering or billing policy.

The DRC does not have an accelerated depreciation policy for clean energy projects, but companies can negotiate on an individual basis. In terms of incentives, all economic activities related to the production, import and export of electrical energy are exempt from customs tax and, in certain cases, valued-added tax (VAT) for four years from the first day of importation. This applies to all energy sources. However, the VAT exemption is not transparent and is not continuously applied.

Power prices and costs

The DRC’s government subsidizes electricity prices by setting a ceiling price for electricity sold, although in most cases, this is less than the cost of generation. The country does not have any time-based tariffs.

There are no specific rules for mini-grid project ownership and what happens after they start supplying to the grid. However, projects seeking to transmit over longer distances have to sell to the government monopoly, Societe Nationale d'Electricite (SNEL), which is inefficient in revenue retrieval.

Some companies have come up with innovative ways to retrieve tariffs directly from clients. For example, Dev Solaire offers pay-as-you-go (PAYG) to its customers, and Electricite de Congo has a proprietary prepayment platform where meters are charged with a code purchased at an EDC shop. U.K.-founded utility company BBOXX is also entering the country to provide PAYG solar with partner Victron Energy, whereby customers will be able to pay $15 per month for a light, radio, and phone system. The company has signed an agreement with the government to bring electricity to 10 million citizens by 2024. Congolese firm Altech also provides a similar service to BBOX.

Power market

Although the DRC’s power market was liberalized in principle in 2013, all segments are still controlled and managed by the Ministry of Energy. The point of liberalization was to enable other players to compete with state utility SNEL, but the agency to regulate the sector has not yet been set up. Although SNEL legally shifted from being state owned to a limited liability company, this has not had any material impact on wider market competition.

Power purchase agreements (PPAs) are negotiated on an individual basis and the government has not yet publicly auctioned any PPAs. There are no restrictions on commercial and industrial partners signing power contracts for internal use and for provision of power to communities externally. Some companies and churches have such arrangements with independent producers and communities.

The DRC aims to improve electricity access from about 10% presently to 65% by 2025, and hope to achieve universal access by 2050. The energy access initiatives are mostly being driven by developmental bodies working with the DRC government, including Sustainable Energy for All (SEA4ALL), UKAid and USAID.

Mining companies represent a significant market for power generation in the DRC. The national utility provider, SNEL, is only able to provide a fraction of what the industry requires to operate at full capacity. Almost all mining companies rely on backup diesel generators due to the intermittent supply from the national grid. In 2012, Glencore signed a $283.5 million loan deal with SNEL to upgrade some portions of company’s hydroelectricity dam to secure offtake for its mines. Other companies, such as Ivanhoe, have emulated this PPA model in order to secure reliable electricity.

Doing business and barriers

There are many barriers that impact the ability for decentralized power projects to take off, particularly end-users’ ability to pay and utility providers’ ability to recover fees. This is coupled with the unreliable nature of the DRC’s grid. Due to the low electricity tariffs set by the government, the main generator, SNEL, has had to cut back on maintenance for decades, resulting in a rundown power infrastructure system. There is, however, an official program to upgrade this infrastructure.

EV market

The government has yet to implement any substantive policy support in this sector and the electric vehicle (EV) market remains at an early stage.

EV policy

The government has yet to implement any substantive policy support in this sector and the EV market remains at an early stage.

Buildings market

The government has yet to implement any substantive policy support in this sector and the low-carbon heating and cooling market remains at an early stage.

Buildings policy

The government has yet to implement any substantive policy support in this sector and the low-carbon heating and cooling market remains at an early stage.