Electricity Situation in the DRC
The Virunga Energies model offers a powerful blueprint for overcoming a common challenge in Africa’s energy infrastructure development: the mismatch between energy supply and actual market demand. While electricity is an essential utility, its value depends largely on the presence of sustainable, paying customers. In many parts of Africa, especially outside major industrial hubs, the challenge isn’t just building power plants but also ensuring there is a viable market to consume the generated electricity.
According to the International Energy Agency, Africa’s electricity consumption breaks down roughly into industrial (37.5%), residential (36.3%), commercial and public services (18.3%), and agriculture (3.7%). The relatively small footprint of industrial consumers, who typically demand large and stable power volumes, creates a dilemma for new power projects that rely on such clients for financial viability. This situation is exactly what Virunga Energies encountered in North Kivu, Eastern DR Congo. Despite the presence of industrial clients consuming diesel-based energy at high costs, less than 10% of potential industrial demand existed at project start, with 90% of industrial consumers simply not yet operating.
The Virunga Model
Virunga Energies tackled this by going beyond just supplying power. They engaged proactively in fostering industrial development to create demand. The approach included flexible financial mechanisms such as deferred and discounted connection payments to lower the upfront cost barrier for new industrial clients. Virunga also extended the power grid physically to reach industrial locations directly, a resource-intensive but necessary step to stimulate new industrial growth and build a sustainable market. By supporting local enterprises to become profitable consumers, Virunga Energies made their power plant financially viable and multiplied its positive socio-economic impacts.
This model highlights a critical lesson for replicating energy projects across Africa: building power plants and securing Power Purchase Agreements (PPAs) alone is insufficient. Developers must also invest in market development activities. This means aligning generation projects with industrial clusters, anchor clients, and local enterprises, engaging technical expertise to help these users become operational and profitable consumers of electricity.
How Recreating the Model can Help improve access in Africa
Recreating the Virunga model across Africa involves:
- Conducting thorough market assessments to identify potential industrial demand and gaps.
- Designing flexible, client-focused payment schemes that reduce upfront costs for energy connection.
- Extending infrastructure beyond the generation facility to reach distributed demand centers.
- Collaborating with governments, development partners, and the private sector to foster new industries aligned with power availability.
- Integrating capacity-building and technical support that enables industrial clients to grow sustainably.
By building the market alongside the power plant, energy developers can enhance both bankability and community impact. This strategic, holistic model not only ensures stable revenue streams but also drives local economic development, job creation, and poverty reduction. African countries aiming to accelerate their energy transition and industrialization would benefit greatly from adopting Virunga Energies’ approach—combining innovative financing, operational flexibility, and proactive market creation to transform energy access from a utility challenge into an enduring foundation for growth.
