Mini-Grids in Conflict Zones: A DRC Case Study on Building Sustainable Electricity Demand

More than 560 million people in sub-Saharan Africa lack access to electricity, with approximately 384 million residing in conflict-affected countries where poverty, insecurity, and weak institutions hinder large-scale energy infrastructure investments. Mini-grids, often powered by renewable energy sources, are increasingly promoted by international development organizations as a viable solution to expand electricity access in these challenging environments.

What are Mini-Grids?

A mini-grid is a localized electricity network that operates independently from the main grid, generating and distributing power to a specific area. These grids vary significantly in size, ranging from serving a few households to thousands of homes, and businesses. They offer a more reliable and higher-capacity power supply compared to small-scale solar home systems, which are often limited to powering basic needs like phone charging and lighting. Mini-grids can support energy-intensive activities crucial for economic development, such as milling, refrigeration, and welding.

The Demand Challenge: A Circular Problem

Despite their potential, mini-grids face a significant hurdle: a circular problem of low demand and high operational costs. Without sufficient electricity consumption, providing power can be financially unsustainable. Simultaneously, a lack of electricity hinders local economic growth. This can create a “low-demand trap,” where even with electricity available, households and businesses cannot afford to use enough power for productive activities, preventing the provider from generating sufficient revenue to maintain the service.

A Case Study from the Democratic Republic of Congo

A recent study examined how this challenge was addressed in North Kivu, a region in the eastern Democratic Republic of Congo (DRC) marked by decades of conflict. Researchers, with over a decade of field experience in the area, analyzed six years of electricity meter data, surveyed 911 households and 291 small businesses, and interviewed staff from Virunga Energies, a private mini-grid operator. Virunga Energies constructed four power plants between 2014 and 2019, utilizing the region’s abundant rivers to establish an independent electricity network serving Goma and nearby towns.

At the time of the study, this system was the largest electricity provider in North Kivu, which has a population of approximately 6.6 million people.

Coordinated Efforts to Stimulate Demand

The research revealed that coordinated efforts involving public-private partnerships, supported by strategic public and development finance, were instrumental in stimulating electricity demand. These initiatives encouraged businesses to locate near the mini-grid and facilitated the adoption of electric appliances by households. This highlights the importance of actively developing electricity demand, rather than simply building infrastructure.

Key Findings on Electricity Usage and Disruptions

Virunga Energies charges tariffs at the lower end of typical mini-grid rates in the DRC, covering operating costs, recovering investments, and aiming for long-term profitability. Initial capital burdens were reduced through donor grants and development finance.

The study identified three key patterns:

• Electricity uptake is uneven and demanding to predict, complicating grid planning and investment.
• Electricity consumption starts small and grows slowly, initially covering basic needs like lighting and phone charging, but increasing with business use.
• Conflict disrupts electricity demand, as demonstrated by an 80% drop in consumption in one town following rebel attacks in 2020, whereas usage recovered over the following two years.

Barriers to Connection

Electricity connection rates varied significantly, from nearly 75% in Goma to around 25% in rural areas. Two primary barriers were identified:

• Land Tenure: The requirement for proof of land ownership, which is costly, slow to obtain, and often disputed in eastern DRC, excludes many households.
• Affordability: The upfront costs of connection and electrical wiring, exceeding US$200, are prohibitive for many households and small businesses.

The Virunga Alliance: A Model for Coordination

To overcome the low-demand trap, Virunga Energies and its partners established the Virunga Alliance, a public-private partnership involving government authorities, civil society, and the private sector. This alliance fostered industrial activities, such as cocoa processing and soap production, near the mini-grid, creating stable electricity demand and local employment.

The alliance also addressed affordability by offering microcredit for electrical equipment purchases, with repayments integrated into electricity bills. They promoted electric cooking through the distribution of free electric pressure cookers, incentivizing increased electricity consumption. Virunga Energies also generated revenue by selling carbon credits and temporarily providing power to energy-intensive activities like Bitcoin mining until local demand increased.

Initial funding came from blended finance, combining donor grants and development finance, transitioning to sustainable operations as demand grew and the company secured loans for expansion, with continued support from development agencies for initiatives like electric cooker rollouts.

Lessons Learned

The DRC case study highlights three key lessons:

• Electrification in fragile settings is a coordination problem, not just a technical one.
• Breaking the low-demand trap requires a holistic approach integrating infrastructure, finance, enterprise development, land governance, and energy policy.
• Government and public-private partnerships are crucial for success.

Even in challenging environments, a coordinated approach can yield positive results. Electricity transforms lives only when integrated into a broader development strategy that creates economic opportunities.