In sub-Saharan Africa, a staggering 560 million people remain without access to electricity. This challenge is amplified in countries classified by the World Bank as conflict-affected, where poverty, insecurity, and weak institutional frameworks create significant risks for large-scale energy infrastructure investments. Approximately 384 million individuals reside in these volatile regions.
International development organisations frequently champion mini-grids, often powered by renewable energy sources, as a pivotal solution. A mini-grid is defined as a compact, localised electricity network that operates independently of the national grid, generating and distributing power to a defined geographic area. These networks can range in scale from serving a handful of households to powering thousands of homes and businesses.
Mini-grids offer a more dependable and higher-capacity power supply compared to the small-scale solar home systems commonly deployed in fragile or low-income settings, which are typically limited to powering basic devices like phone chargers and lights. In contrast, mini-grids can provide sufficient energy to support small businesses engaged in activities such as milling, refrigeration, and welding.
However, mini-grids grapple with a persistent challenge: a circular problem of demand and sustainability. For these projects to be financially viable, they require paying customers. Yet, they often contend with low electricity demand and high operational expenses, which can render the provision of electricity unsustainable. Concurrently, the absence of reliable electricity hampers the growth of local economies. This dynamic can lead to a “low-demand trap,” where even when electricity is available, if households and businesses cannot afford to purchase enough for productive uses, the mini-grid operator cannot generate sufficient revenue to maintain the service.
Examining Mini-Grid Challenges in a Conflict-Affected Region
A recent study delved into how this complex challenge was addressed in North Kivu, located in the eastern Democratic Republic of Congo (DRC). This region has been profoundly impacted by decades of conflict, and access to the national grid has been largely absent.
A team of environmental and development economists, with over a decade of field research experience in the area, focused their investigation on this region. Between 2014 and 2019, Virunga Energies, a private mini-grid operator, established four power plants leveraging the region’s abundant river resources. These facilities formed an independent electricity network across North Kivu, supplying power to the city of Goma and surrounding towns. At the time of the study, this system represented the primary electricity provider for North Kivu, a province with a population of approximately 6.6 million people.
The research involved a comprehensive analysis of six years of electricity meter data, surveys conducted with 911 households and 291 small businesses, and interviews with Virunga Energies staff. The objective was to understand how the company navigated the inherent risks associated with uncertain electricity demand.
The study’s findings indicated that collaborative efforts between public-private partnerships, bolstered by strategic public and development finance, played a crucial role in stimulating electricity demand. These initiatives encouraged businesses to establish themselves in proximity to the mini-grid and supported households in adopting electrical appliances. This underscores a vital conclusion: simply constructing a mini-grid is insufficient; electricity demand must be actively cultivated. Without this proactive approach, many electrification projects in fragile regions risk financial unsustainability.
Understanding Electricity Consumption Patterns and Barriers
Virunga Energies prices its electricity above the official rates of the national utility but at the lower end of typical mini-grid tariffs in the DRC. The company’s pricing strategy is primarily designed to cover operating costs, facilitate gradual investment recovery, and ensure long-term profitability. Initial capital burdens were alleviated through early donor grants and development finance.
The study identified three significant patterns regarding electricity uptake:
- Uneven and Unpredictable Demand: Electricity usage proved to be highly uneven and difficult to forecast. This inherent uncertainty posed challenges for operators in planning grid capacity and making investment decisions.
- Slow Growth in Consumption: Electricity consumption typically began at a modest level and grew gradually. Connected households generally used electricity for lighting, phone charging, and a limited number of appliances. Small enterprises consumed more, sufficient to operate essential equipment such as refrigeration units, milling machines, or welding tools.
- Disruptions Caused by Conflict: The demand for electricity was demonstrably affected by conflict. In one town, rebel attacks in 2020 led to a dramatic collapse in electricity consumption, exceeding 80%, as most residents and business owners temporarily evacuated for safety. Despite these disruptions, electricity usage showed resilience, recovering over the subsequent two years. Similarly, in Goma, fighting in 2025 resulted in a sharp but short-lived decline in electricity purchases. This resilience highlights that even in volatile environments, electricity demand can rebound.
Obstacles to Household Electrification
The research also shed light on why households might not be connecting to electricity, with connection rates varying significantly, from nearly 75% in Goma to approximately 25% in rural areas. Two primary barriers were identified:
- Land Tenure: A mandatory requirement for obtaining an electricity connection is the provision of proof of land ownership. In eastern DRC, obtaining land titles is a costly and time-consuming process, often fraught with disputes. Consequently, many individuals reside in family homes or rented properties without formal documentation.
- Affordability: The cost of connecting to the grid and electrically wiring a house was found to exceed US$200, a sum prohibitive for many households and small enterprises. Surveys indicated a strong desire for electricity among the populace, but the upfront costs presented an insurmountable hurdle. While connection fees are already partially subsidised by grants and anticipated future revenue, the inherent costs of installing new lines, meters, and potentially poles make significant reductions challenging. This affordability issue is a key factor contributing to the persistent low-demand trap experienced by many mini-grids.
Strategies for Escaping the Low-Demand Trap
Instead of passively awaiting the organic growth of electricity demand, Virunga Energies and its partners actively pursued strategies to stimulate the local economy through electricity utilisation.
The establishment of the Virunga Alliance, a public-private partnership involving government authorities, civil society, and the private sector, was instrumental. This alliance fostered industrial activities, such as cocoa processing and soap production, in areas close to the mini-grid. These ventures generated consistent electricity demand while simultaneously creating local employment opportunities.
Recognising that businesses often relied on diesel generators due to a lack of funds for electrical equipment, despite electricity being significantly cheaper, the alliance partnered with a bank to offer microcredit facilities. Repayments for these loans were integrated into electricity bills, simplifying the payment process and providing a strong incentive for repayment, as non-compliance could lead to temporary disconnection.
Furthermore, the company actively promoted electric cooking by distributing free electric pressure cookers to families. This initiative allowed households to reduce their expenditure on charcoal, while the electricity company recouped the cost of the cookers through increased electricity sales. Virunga Energies also generated revenue by selling carbon credits, achieved by supplying electricity to local businesses and consequently reducing diesel consumption. Additionally, the company capitalised on temporary, high-demand electricity users, such as Bitcoin mining operations, to utilise surplus electricity and generate income until local demand matured.
Key Lessons for Electrification in Fragile Settings
The success of these endeavours was contingent upon coordinated support. Initially, blended finance, combining donor grants and development finance, was crucial for the company’s establishment. As demand grew, operations became sustainable, enabling the company to secure loans for expansion, while development agencies continued to support initiatives like the rollout of electric cookers.
Three principal lessons emerge from this experience:
- Coordination is Paramount: Electrification in fragile settings is not merely a technical undertaking but a complex coordination problem.
- Holistic Approach Required: Overcoming the low-demand trap necessitates the integrated efforts of infrastructure development, financial mechanisms, enterprise promotion, land governance, and energy policy.
- Public-Private Partnerships are Essential: Government and public-private partnerships play a central role. The market alone cannot effectively drive electrification in these contexts.
Even within one of the world’s most fragile regions, this coordinated approach is yielding tangible results. Electricity’s transformative potential is fully realised when it is integrated into a broader development strategy that creates genuine opportunities for people to engage in productive activities.
