Monday, Oct 23, 2017
Energy | Africa | Democratic Republic of Congo

Energy in DRC

From darkness to brightness


1 year ago

Private-sector penetration is still quite low in DRC's energy sector
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Filip Vanhoutte

General Manager of Special Techniques Company (STS)

Filip Vanhoutte, General Manager of Special Techniques Company (STS), invites greater competition in the Democratic Republic of Congo, especially from the international community: “I welcome investors in DRC’s energy sector, even if they’ll be my competition. There’s room for all”

 

How would you evaluate the progress of the energy sector in the DRC, in which you operate? How does it contribute to the country’s development and growth?

The government is currently working hard on the foundation of the economy, such as infrastructure, energy, etc. For that reason, we encourage and congratulate them, although we have noticed that it is a difficult task taking into account the sheer size of the country. DRC is practically a subcontinent.

DRC suffers from a lack of energy providers. SNEL (the national electricity company) and STS, are the only existing providers, although they are closely related. Thus there is still a lot to do within the energy sector, plenty of foreign investors might find this market attractive as it is extremely linked with the country’s growth.

 

Besides infrastructure scarcity, some important challenges have to be addressed within the energy sector, such as the lack of investments, the old age of existing infrastructure (most of which date from the colonial era), fast-paced population growth, and visible climate change in many regions. What in your opinion are the biggest challenges faced by the energy industry that makes sustainable development difficult to implement?

The biggest challenge is, without a doubt, DRC’s humongous size. Considerable capital is needed in order to increase access to energy, but private entities are having a hard time accessing low rate loans.

 

How do you define the relation that exists between the public sector, the government and private organizations in order to find sustainable solutions in the energy sector? What could be improved?

The number one aspect that could definitely be strengthened is communication. Problems must be raised in order to be properly addressed.

 

The government’s ambitious energy policy aims at developing the current energy offer by diversifying energy sources. What can you tell us on the importance of diversified energies, and how big of an opportunity do renewable energies constitute in DRC?

DRC, from which the Nile originates, is definitely a high-potential country when it comes to hydroelectric energy. It would thus be necessary to favor the world’s least expensive energy, hydroelectric power.

Besides this, and taking into account the country’s size, renewable energy sources, such as photovoltaic solar energy, must be used to develop isolated areas. Renewable energy is, even today, an untouched field, and therefore synonymous with opportunity.

 

What is the role of private organizations in the implementation of the national energy policy?

The private sector has a major role to play because the government is doing what it can, but cannot do miracles. The government mainly takes care of leading infrastructures, but smaller infrastructures have to be built by private players.

 

What are your views on the energy market’s penetration by private entities in the country?

Private-sector penetration is quite low. I strongly advise foreign companies to invest in DRC even if they would be my competitors, as the country’s size makes it accessible for all.

 

How could costly projects in the sector benefit from public-private partnership (PPP) schemes?

Identifying a project and discussing it with the government in order to elaborate a partnership is actually as simple as it sounds. Many opportunities exist to set up this type of partnerships. The government put an energy law in place, which even specifies the earnings that companies can have. This will allow DRC to develop its energy sector.

 

What challenges have you faced during STS’ 30 years of existence in the country?

If we put in perspective STS’s challenges over its 30 years of existence, they could be considered as minimal. Of course we were in the country during wars, riots, etc., but we were affected only during a six months period, which is barely significant. Infrastructure is generally quite stable and not really affected by turbulence.

 

How important are partnerships to your operations?

I consider partnerships to be very important. As an example, we are developing a project in the east of the country, in the city of Butembo. On the finance side, people have been knocking on our door to take part in the project’s financing, in particular the British. We thus have begun to be better known as investors have become more interested in our projects.

On the technical side, British, French, and other foreign companies come to see us for each new project. They are more and more interested to invest with us in the energy sector. For instance, we are now associated with METIS, a Belgian company. This type of partnership is very important in terms of technology and skill transfers to the local population. This company has a training center which is ideal to train our Congolese staff. As 30-year concessions are given to companies in the energy sector, long-term technology transfer partnerships can be considered. Through this kind of training, we are able to pay back our loans, maintain and develop skills and knowledge, and benefit from investments.

 

How does STS minimize its environmental impact?

Every energy project we undertake is first evaluated for its environmental impact. These studies have to be done in order for us to obtain a PAR certification (Action and Reintegration Program), without which a project cannot be initiated.

 

What can you tell us on your investment strategy?

STS is still a relatively small company, but we still invest in energy production from gigawatt to kilowatt-size plants. We mainly focus on 50 to 100 megawatt “mini” power plants.

Foreign companies can benefit from DRC’s market with whatever specialties they have. Kilowatt solar plants could easily fit the demand.

 

What are STS’ competitive advantages in the DRC market?

We know the country, we have been here for decades now, and we react extremely quickly, two to three times faster than our competition. Time management remains STS’ competitive advantage, which is always important in the development of new energy projects.

 

What message would you like to send to international investors?

DRC is a welcoming country, with many opportunities. It has its particularities, but it is among the continent’s best countries.

STS wants to attract the investors to the energy industry, as it is a field that we know and that we wish to develop. As in all countries issues may sometimes occur, but the energy sector is extremely stable here. The future offers a lot of hope and opportunity.



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