DRC SPECIAL REPORT / 2020 - INVEST IN THE ENERGY SECTOR OF THE DEMOCRATIC REPUBLIC OF THE CONGO
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SPECIAL REPORT / 2020 Power Gas Renewables OIl Nuclear DRC INVEST IN THE ENERGY SECTOR OF THE DEMOCRATIC REPUBLIC OF THE CONGO www.africaoilandpower.com
H.E. President Félix Tshisekedi
4
The Democratic Republic of the Congo
(DRC) is considered to be one Africa’s richest
A Resource- countries in terms of natural resources,
and is home to the Congo River, the second
longest river in Africa, which boasts major
Rich Country
hydroelectric potential. Estimates state that it
could produce up to 100,000 MW, close to a
third of Africa’s total hydroelectric potential.
Having attracted European powers to its estimates state that the lake contains up The government has declared economic
southeast Katanga region as early as the to 60 billion cubic meters of methane diversification to be a top priority in the
19th century, the Democratic Repub- gas and 300 billion cubic meters of car- coming years, with a special emphasis
lic of the Congo has long been rich in bon dioxide that could be transformed on development of the oil and gas sector.
natural resources, with immense mineral into large quantities of natural gas. To date, the DRC stands at the 12th
reserves scattered across the country. position among Africa’s oil producers,
The coastal region is a particularly pro- with 25,000 barrels a day produced from
The Katanga region is home to an spective area when it comes to hydrocar- declining fields operated by leading
array of minerals ranging from copper, bon exploration and production. While independent Perenco.
zinc, cassiterite, manganese, coal, gold, bauxite and gold can be found onshore,
cadmium and uranium, and the country the DRC’s maritime area holds substan- A new government was instituted in
serves as the largest producer of cobalt tial petroleum deposits. The country January 2019, which stakeholders see
globally. The country’s mining indus- currently produces 25,000 barrels of oil as a major opportunity to revitalize the
try is set to gain even more influence a day, and proven reserves are estimated petroleum sector.
with the predicted exponential demand at 180 million barrels. However, esti-
growth for electric vehicle (EV) bat- mates of total petroleum reserves exceed In April 2019, the DRC’s government
teries, of which cobalt is an essential five billion barrels and could reach up to announced it would put 38 petroleum
component. A variety of minerals such 20 billion barrels. Such a figure would blocks on offer for bidding. In May
as beryl, gold and cassiterite can also be position the DRC as the second largest 2020, H.E. Rubens Mikindo Muhima,
found in great quantities west of Lake petroleum holder in sub-Saharan Africa, Minister of Hydrocarbons, announced
Kivu, northwest of Katanga. just behind Nigeria. that the Council of Ministers had agreed
to launch a tender process to award se-
Gem-quality diamonds and iron ore are Need for Diversification lected blocks to petroleum operators.
found in the south-central part of the
country, while industrial diamonds are Agriculture and mining are the back- The government is also making deci-
abundant across the central regions. The bone of the DRC’s economic structure, sive strides in the area of natural gas
northeastern part of the country contains as the former provides two-thirds of monetization. In August 2020, H.E.
gold, coal and iron-ore deposits, while available jobs and the latter represents President Félix Tshisekedi urged his
the northwestern region features gold, 90% of the country’s export revenue. administration to fast-track permits and
monazite and diamonds. While market conditions are creating legal processes associated with the valo-
major opportunities in EV batteries, for rization of onshore produced natural gas.
Lake Kivu, shared by the DRC and instance, the country’s economy needs The announcement falls in line with the
Rwanda, contains a large amount of diversification to improve its resilience, country’s leadership goals of reaching
biogas and methane as a result of volca- access to basic utilities and living condi- universal access to power by 2035.
nic activity and degradation of organic tions, while increasing its influence on
matter at the lake’s surface. The latest the African and global industrial stage. The DRC’s energy ambition is not lim-
2020 Special Edition
Invest in the Energy Sector
of the Democratic Republic of the Congo
5
ited to natural gas and petroleum. The renewable sources of energy are being through the growth opportunities
country is estimated to hold a third of developed, such as solar: the Kinshasa procured by its mineral-rich soil and
Africa’s total hydroelectric potential. Solar City project aims to build several hydrocarbon potential. The devel-
Today, only 2.5% of that potential is solar power plants totaling 1,000 MW opment of these industries, as well
exploited to create electricity. Major capacity. as renewables, will be driven by the
ongoing projects include the 4.8 GW government’s commitment to attract-
capacity Inga III dam, which is part While mining continues to provide ing foreign investment, improving
of the large-scale Grand Inga Proj- economic stability and agriculture its business climate and creating a
ect that could ultimately meet up to stimulates local job creation, the long-term, profitable and sustainable
40% of Africa’s energy demand. Other DRC’s future can only be envisaged framework.
6
Nj Ayuk
Executive Chairman,
African Energy Chamber and CEO,
Centurion Law Group
2020 Special Edition
Invest in the Energy Sector
of the Democratic Republic of the Congo
7
To Achieve its Power
Accessibility Goals, the DRC
Must Develop its Gas Resources
As the Democratic Republic of the Congo generation. Such additional supply would the foundation for industrial growth across
(DRC) embarks on an ambitious electri- especially help in addressing the DRC’s en- industries, be it cement, mining, manu-
fication agenda to provide power to its ergy deficit, and in providing stable supply facturing or transport. From Cameroon to
industries and population, diversifying of power to its booming mining industry. Tanzania, the development of natural gas
its energy mix and developing its gas has not only provided the base of reliable
potential will be key to ensure reliable The African Energy Chamber is extremely power supplies, but is now providing en-
and affordable energy supplies. While encouraged by the government’s deci- ergy to industries and cars that all run on
hydropower represents the biggest proven sion, and continues to believe that locally African resources.
potential for electricity generation in the available natural gas offers the perfect
country, solar, wind and especially natural opportunity to build power capacity in the This is the kind of opportunity that the
gas should become a priority to ensure a short-term and ensure a stable and cheaper DRC is presented with, and it seems like
diversified energy mix that primarily bene- power supply for decades to come. it is ready to seize it. There are strong
fits Congolese households and industries. reasons to be optimistic about the future
As the administration of President Félix of oil & gas in the DRC given current
Surrounded by major African oil and Antoine Tshisekedi makes energy security political support for the industry. While
gas producers such as the Republic of and investment its top priority, natural gas market-driven policies are needed to
the Congo and Angola, the DRC has so is what can bring the quickest gains to the ensure investments in gas monetization,
far remained relatively absent of Africa’s country. While authorities seek to get mas- an enabling environment will remain key
league of hydrocarbons producers. In sive hydropower projects off the ground, to unleashing the massive potential of the
2019, only French-British independent diversifying the country’s energy basket DRC. Given current market conditions,
Perenco produced oil from the DRC, at is what will create the most jobs and spur the country is faced with the challenge of
an average rate of 25,000 boepd from 11 industrial growth. attracting exploration dollars to further
onshore fields. This represents only 8% of appraise its gas potential and explore its
Congo Brazzaville’s production, and 1.5% A massive undertaking like Inga III will basins. Only strong political will coupled
of Angola’s daily output of hydrocarbons. undoubtedly be developed with very little with bold reforms will make this happen
The difference moving forward is that the local content, and produced power will be on a scale large enough to spur meaningful
administration of President Félix Antoine reserved for exports or big foreign mining change.
Tshisekedi has made it one of its priorities companies.
to catch up with its neighbors and develop With 100 gigawatts of hydropower po-
gas for domestic use. On the other side, gas-to-power facilities tential, the DRC remains a very attractive
supplied with domestic gas are likely to frontier for energy investors. However, the
In yet another decision supporting the generate much more local value, especially development of large hydroelectric stations
development of the DRC’s hydrocarbons in the short and medium-terms. should not be done at the detriment of
industry in August 2020, President Félix smaller and high-value generating projects
Antoine Tshisekedi requested its Minister The monetization of African gas is known based on natural gas. Under the leadership
of Hydrocarbons, Hydraulic Resources and to be the biggest value generator across the of the new administration, investors and
Power and its Minister of Finance to fast- energy chain in most countries on the con- local players are offered unique oppor-
track legal processes and permits pertain- tinent. From the upstream developments tunities to participate and support the
ing to the valorization of the natural gas all the way to the processing of gas and country’s ambitious growth plans and fight
produced onshore by Perenco. The decision transformation into power, or fertilizers energy poverty. It is a chance for all stake-
was taken during a Council of Ministers in and petrochemicals, the development of holders to rally around a visionary agenda
Kinshasa, and is expected to result in the African gas creates jobs and generates that can transform the lives of millions of
monetization of natural gas through power economic value. More importantly, it is Congolese citizens.
8
Outstanding
Hydropower
The Congo river is an outstanding asset for
the Democratic Republic of the Congo’s
energy development. While it hasn’t seen
major developments for several decades,
Potential
authorities are committed to harnessing
hydropower potential through the major
Grand Inga complex.
2020 Special Edition
Invest in the Energy Sector
of the Democratic Republic of the Congo
9
The Democratic Republic of the Congo ment of $14 billion for a final capacity of Hydropower to Boost Mining
(DRC) possesses a third of Africa’s hydro- around 11,000 MW.
power potential. Governmental commit- The DRC’s mining sector is another key
ment and improved business climates are In June 2020, the DRC government area of development that could be sup-
enticing investors to develop hydropower organized a meeting hosted by the ported by hydropower. Home to some of
as it represents a substantial source of eco- DRC’s president, H.E. Félix Tshisekedi, the world’s largest deposits of copper and
nomic growth and power inclusiveness. aiming to unite his African counterparts cobalt, among other high potential miner-
around the Grand Inga project. President als, the DRC’s mining sector is hindered by
The DRC is home to Africa’s second lon- Tshisekedi wants to make Grand Inga a a lack of stable and cheap access to power.
gest river, the Congo river. Its continental concern as it “will be able to According to a study run by the Congolese
flow rate is one of the highest global- meet a significant share – up to 40% – of Chamber of Mines in 2015, copper and
ly, only surpassed by South America’s Africa’s electricity demand at a compet- cobalt output was reduced due to inefficient
Amazon. Due to its sheer size and power, itive price and in a sustainable manner.” power supply.
the Congo river boasts 13% of the world’s It is seen as an important anchor for
hydropower potential, and, if exploited solving Africa’s electricity shortages, The same year, many mining companies
correctly, could provide enough power developing green energy production decided to boost the country’s production
to meet half of the continent’s energy and the continental African electricity capacity through the construction of several
needs. There are currently around 40 market. This first meeting, which aimed hydropower stations. Global player Rand-
hydropower stations along the river, with to highlight opportunities and challeng- gold Resources built two 11-MW hydro-
a total capacity reaching 2,500 megawatts es, will be followed by a second meeting power stations in Ambarau and Azambi.
(MW). Much of that capacity is wasted in October in order for the DRC to win It had previously built a 22 MW plant in
however, due to ageing and inefficient political support across Africa. While a 2014. Canada-based Ivanohe as well as Si-
infrastructure. minimum of 6,000 MW is destined to no-Congolese Sicomines undertook similar
the DRC’s domestic market, where the initiatives to significantly boost electricity
Grand Inga is the world’s largest hydro- rate of access to power struggles to reach availability in their respective operation
power project. Aiming to comprise seven 19%, some countries have already shown sites.
hydropower stations, it could produce their interest in the DRC’s upcoming
up to 40,000 megawatts of electricity. hydropower output. In order to facilitate power distribution for
The world’s largest current hydroelectric mining companies and its population, major
plant is the Three Gorges Dam in China, Back in 2013, South Africa’s utility com- infrastructure investment will be required.
featuring 22,500 MW capacity, half of the pany Eskom signed a purchase agreement Indeed, the DRC is sub-Saharan Africa’s
DRC’s projection. with the DRC to buy 2,500 MW from largest country by land mass and currently
the future Inga III. In 2019, Angola an- features three separate power grids feeding
Located within the Inga Falls, the Inga nounced its intention to purchase 5,000 electricity to different parts of the country.
III hydropower project is currently under MW from 2025 onwards.
construction. It is one of seven hydropow- Among the DRC’s array of natural resourc-
er projects together forming the Grand H.E. President Félix Tshisekedi de- es, the mighty Congo river’s formidable
Inga Hydroelectric Project. clared in April 2019 that hydropower power potential is providing hope for a
“is a technology the world needs to get bright future to millions of people currently
After years of delay, the companies chosen involved in because we need to preserve cut off from substantial electricity supply.
by the DRC’s government to build Inga the environment and avoid fossil fuels. Thanks to the commitment of the country’s
III signed an agreement in August 2020 The Congo River offers enormous po- leadership combined with appetite from
to form a consortium for the dam’s devel- tential in this direction. In the develop- local operators as well as the international
opment. The venture involves six Chinese ment of Inga’s power plants, we have an investor community, the DRC’s hydropower
companies and a Spanish power firm. The opportunity to distribute energy to all of potential is about to be unleashed, to light
project is expected to necessitate invest- Africa.” up central Africa.
10
An Ambitious
Energy Outlook
The Democratic Republic of the Congo’s mining sector has been the main driver of the national
economy since the 1960s. Endowed with major potential for energy and power, the government
has entered an ambitious economic diversification plan largely supported by the energy sector.
Main targets include providing universal access to power to its citizens by 2035; increasing reve-
nue generation through energy production and industrial competitiveness; and further strength-
ening the mining sector by providing operators with a cheap and stable supply of electricity.
TARGETS
COMMISSION THE INGA III HYDROELECTRIC DAM. REACH HIGH-INCOME STATUS BY 2050 THROUGH
REDUCE GREENHOUSE GAS EMISSIONS BY 17% THE IMPLEMENTATION OF THE NATIONAL
BY 2030. STRATEGIC DEVELOPMENT PLAN.
KEY INDICATORS
2000 2018 2030 2040
GDP ($ BILLION, PPP) 29 73 132 238
POPULATION (MILLION) 47 84 120 156
ACCESS TO CLEAN COOKING 3% 3% 4% 5%
CO2 EMISSIONS (MT) 1 3 10 16
ENERGY OUTPUT BY RESOURCE (MTOE)
COAL OIL GAS HYDRO SOLAR PV BIOENERGY
2010 0.59 0.67 18.63
2018 0.84 0.01 0.8 28.91
2030 0.5 2.42 0.01 1.58 0.17 39.89
2040 1.11 3.8 0.02 2.49 0.44 50.88
2020 Special EditionInvest in the Energy Sector
of the Democratic Republic of the Congo
11
ELECTRICITY GENERATION BY RESOURCE (TW/h) REQUIRED INVESTMENT BY SECTOR
$ billion, between 2019 - 2040
30 19.49
20
25 18
16
20 14 13.15
12
15 10
8 7.97
10
6
5 4
2 1.82
0 0.23 0.11
0
2010 2020 2030 2040 Production Power: Power: Power: Access to Access to
Petroleum Fossil fuels Renewables Networks electricity clean cooking
Coal Oil Hydro Solar PV Bioenergy
NATIONAL STRATEGIC DEVELOPMENT PLAN
2019-2023
The Democratic Republic of the Congo’s National Strategic Development Plan (NSDP) is a global eco-
nomic diversification plan aiming to achieve the United Nation’s Sustainable Development Goals by
2023. The NSDP is built around five pillars looking to deeply transform the DRC’s economy, which is
currently heavily reliant on mining and agriculture.
REQUIRED TOTAL INVESTMENT $47 BILLION
HUMAN CAPITAL, SOCIAL AND CULTURAL DEVELOPMENT
Education and training | Access to water, electricity and housing | Access to universal heathcare and health insurance
Fight against poverty and social isolation | Women empowerment and promotion of youth | Social protection system
STRONG GOVERNANCE, STATE AUTHORITY REINFORCEMENT AND PEACEKEEPING
Strengthening of the State’s authority and stronger democracy | Better governance in natural resources management, public finance
and state participation | Quality and efficiency of public policies | Fight against corruption and white-collar crime | National peace
and reconciliation
ECONOMIC GROWTH, DIVERSIFICATION AND TRANSFORMATION
Macroeconomic stability | Economic diversification and inclusive growth | Improvement of the business climate and promotion of
entrepreneurship | Acceleration of regional and global integration | Rehabilitation of diplomacy and public image on the global stage
INFRASTRUCTURE MODERNIZATION, TERRITORY MANAGEMENT AND RECONSTRUCTION
National territory planning | Development of transport networks | Development of water and power networks | Development of
information and communication technology
ENVIRONMENTAL PROTECTION, FIGHT AGAINST CLIMATE CHANGE AND SUSTAINABLE DEVELOPMENT
Fight against climate change and reduction of C02 emissions | Rural development | Urban development | Achievement of United
Nations Sustainable Development Goals across sectors12
Trésor Chovu
CEO
Cactus Investments
2020 Special EditionInvest in the Energy Sector
of the Democratic Republic of the Congo
13
Opportunity
in Strategic
Cactus Investments Limited is a
London-based investment and
consultancy company focused on
Africa. It helps enhance investments
Sectors
in traditionally strategic sectors such
as power, mining, infrastructure,
oil and gas.
What projects are you currently operat- class resources in the oil and gas sector. It that time, there was a deficit of over 2,500
ing in the DRC? is estimated that the country has 65 billion technical local experts in the central Africa
cubic metric tons of gas in the eastern part region. Certain countries such as Angola
In the DRC we took advantage of the alone. and Equatorial Guinea have tried to revert
improvement of the regulation of the local the balance with quotas in managerial
content via our subsidiary, Cactus Invest- Access to power in the country is one of the and technical positions. This involved
ments SARL, to become more involved in lowest in the world. This has been caused the training of local staff by expatriates
the mining sector. In collaboration with in the past by a number of factors such as within the energy sector. Nigeria is more
Ocean Fuel in the UK and various Africa extremely poor creditworthiness and poor advanced into this. Although the DRC has
focused UK funds, Cactus Investments will infrastructure. Nonetheless, one has to many universities as well as management
start deploying fuel solutions to feed the recognize that efforts are being made. In schools including oil and gas, the country
mining sector while building alternative August 2020, the President of the Republic is still facing a shortage in local expertise
solutions to generate renewable energy. We Félix Tshisekedi inaugurated the Kinshasa mainly because of weak policy but also
will be supplying a minimum of 5,000 Solar City, a project to generate a total of the petroleum sector hasn’t picked up yet.
tons of fuel per month to the DRC mining 1,000MW in Kinshasa. During the same The acquired knowledge for many people
sector. month, a consortium of German companies remains theoretical. The government is
signed an MOU with the government for trying to reinforce policies.
Furthermore, we have helped finance vari- hydrogen production estimated at $11
ous projects in Central, Southern and West billion. Furthermore, General Electric is What major infrastructure projects are
Africa. Our most current transactions are expected to refurbish power stations within required in the DRC’s electricity sector
centered in the financing of gold explora- the country for total amount of $1 billion. to increase its industrial sector compet-
tion in West Africa in collaboration with itiveness?
the alternative market in Canada. The government, donors, international in-
stitutions and private companies have been There should be immediate actions in the
What is your view of DRC’s energy collaborating on a way forward to increase refurbishment and the construction of ex-
sector? capacity. Microgrid projects and rural elec- isting and new infrastructure i.e. distribu-
trification is on the rise. Many projects will tion lines. Without such infrastructure the
The government has prioritized energy come on the stream in the next 5-10 years. capacity of generation will be immensely
access and a regulator is in place. This is The future looks very promising. affected. Secondly, the DRC has many
the time to start investing and developing electricity sites, be it hydro, solar and wind.
commercial electricity projects in the DRC. How strong is the local content policy? The development of small and medium size
sites in the provinces hopes to meet local
The fact that the country has enormous We help enhance investments in mainly needs and attract industries locally and
hydro potential and that the average traditional sectors such as Power, Mining, promote SMEs. This should be mixed to
temperature throughout the year is above Infrastructure, Oil and Gas. Problems with respond to the growing needs of renewables
25 degrees Celsius makes the DRC one of the availability of qualified local workforce energies. The government should introduce
the most attractive countries for a balanced is not inherent to the DRC even though a bond guarantee to help the private sector
energy mix, including renewable energy the country is lagging behind other African to attract investors. Some provinces only
such as solar. The Inga III project alone has countries. This issue has been raised in have an electrification rate of 1% while
the capacity to generate 40,000 MW. In ad- 2014 during an oil and gas conference seated on hundreds of megawatts capacity
dition to this, the DRC has untapped world in Kinshasa in which I was a speaker. At at their doorsteps.14
Rethinking In a country the size of the Democratic
Republic of the Congo (DRC), the design of an
Power
efficient electricity transmission network is a
key topic regarding access to power, population
isolation and economic competitiveness.
Transmission
Featuring one of the continent’s lowest rates
of access, the DRC needs to work hard to feed
power to its 85 million people.
The DRC currently has around 2.7 gigawatts tricity Regulation Authority’s (ARE’s) mission to 5.5 kilowatt-hour per square meter (kWh/
(GW) of electrical capacity installed through 50 is to regulate the sector, be a solid interlocutor m2). Six provinces in the area boast the highest
power plants scattered across the country. Less for its stakeholders and attract private operators daily irradiation around 5 kWh/m2 and some-
than half of that capacity is actually exploitable, into the DRC’s electricity space. The National times up to 6.75 kWh/m2.
due to ageing equipment and lack of mainte- Agency for Electrification and Energy Services
nance. Ninety-five percent of the DRC’s output in Rural and Peri-urban Areas (ANSER) focus- The DRC has significant biomass resources
is hydroelectric, thanks to the Congo river. es on isolated rural areas as well as suburbs and despite a regular deforestation in recent de-
lightly urbanized areas. cades. The local deforestation rate is estimated
Nineteen percent of the Congolese popula- to be stabilized around 0.2% since the 1990s,
tion has access to electricity. Disparities are The Inga-Kolwezi transmission line, which was which is lower than tropical regions in South
great as almost 50% of the urban population once the world’s longest high-voltage direct America, where 300,000 hectares are destroyed
is electrified as opposed to 1% in rural areas. current line reaching 1,700 kilometres, is one every year. The Congolese tropical forests cover
The national grid comprises three separate of the few large-scale power infrastructure 67% of the country’s surface. This corresponds
grids, in the west, the east and the south of the achievements in the country. When the local to 19.5 billion tons of carbon in activity, while
country. The south grid covers the Lualaba and government liberalized the electricity sector in other estimates suggest this figure could be
Haut-Kantaga provinces where intense mining 2014, institutional investors such as the World doubled. The agricultural domain has major
activity is conducted. It is connected to Inga Bank, the African Development Bank, United waste potential due to its 25 million hectares
power plants on the Congo river and features Kingdom’s Department For International of arable land. Waste collection logistics is the
and transmission line for imported power from Development and the European Union declared main challenge in that regard as it is currently
Zambia. The high-voltage line between Inga the DRC’s power sector development a priority. limited and disorganized.
and Kolwezi, Lualaba province capital, was
rehabilitated and its capacity doubled in 2007 While mining has been the country’s economic In 2018, SEforAll Africa hub in conjunction
thanks to a $178 million loan from the World backbone for six decades, the available energy with the African Development Bank recently
Bank. resources are immense. The DRC’s could published a mini-grid market opportunity
contain up to 20 billion barrels of oil according assessment of the DRC. Based on current grid
Liberalization of the power sector was imple- to estimates, placing it just behind Nigeria in coverage the report estimates that 61 million
mented in 2014, ending the national utility Africa’s top oil reserves ranking. While inter- people could be connected to mini-grids, for an
company Société Nationale d’Electricité’s national operators are increasingly interested by annual market potential of $921 million. Solar
(SNEL’s) monopoloy. To this day, SNEL still the DRC’s hydrocarbon sector, renewable ener- and hydro power have the highest potential to
provides 94% of the DRC’s electricity produc- gy production is set to see exponential growth accelerate electrification thanks to mini-grids as
tion. The company is in financial difficulty due in the context of climate change and the they are both abundant resources in the country.
to low cost of electricity for end users, around Paris Agreements. These alternative fuels are
$0.07 per kilowatt-hour, as well as illegal particularly strategic regarding infrastructure Despite a lower than average rate of access
connections. development as they are available nationwide to power, the DRC government is showing
and therefore do not require to be transported commitment to improving the situation. Its
The Ministry of Energy and Water Resources over long distances, thus opening the door to formidable natural resources such as solar, hydro
is responsible for organizing the production mini-grid systems. and even petroleum are set to light up the
and distribution of water and electricity in the country in the near future. Major investments,
country. In 2016, two government agencies Solar energy offers remarkable potential to both public and private, are required especially
were created in order to better regulate and power mini-grids electrical distribution. The in infrastructure in order to make sure power
develop the power sector, and implement more southern regions especially features high rates of is produced, transported and delivered in the
efficiently the liberalization strategy. The Elec- daily irradiation as they reach an average of 3.5 most efficient and affordable manner.
2020 Special EditionInvest in the Energy Sector
of the Democratic Republic of the Congo
1516
Spearheading
Economic In 2019, under a newly elected
government led by H.E President Félix
Tshisekedi, the Democratic Republic of
Diversification
the Congo launched its National Strategic
Development Plan, a multisectoral
development plan spanning four years.
The resource-rich DRC boasts immense tions. However, the Congolese financial country’s authorities. Other innovative
economic potential; while mining and system suffers from a lack of quality fund funding mechanisms will be engineered
agriculture have primarily served as the management teams, market information and implemented. Private individual
only drivers of revenue generation and and corporate governance, which hinders investment will be encouraged in the real
job creation, the country is currently investments in small and medium-sized estate sector, while the banking sector
spearheading an economic diversification enterprises. This has led to slowed devel- will be largely developed through finance
strategy that seeks to improve the do- opment of financing institutions. sub-sectors, such as insurance, meso-fi-
mestic financial system through enhanced nance and microfinance.
economic stability. Through a series of The implementation of the National
measures, such as the establishment of Strategic Development Plan (NSDP), in The execution of the plan, which is
development banks and an extension effect from 2019 to 2023, is based on set to cost $47.55 billion in total, or
of financial services to rural areas, the strengthened capacity to mobilize all $9.51 billion per year on average, will
government is targeting 10 million bank public and private financial resources to also strongly rely on increasing public
accounts to be opened throughout the fund the developments underlined by the revenue. The government intends to
country by 2024. plan. In addition to efforts to enhance maximize fiscal resources for the budget
efficient public spending, the govern- while encouraging private investments.
Unlike other Central African countries, ment intends to improve collection of In this sense, resource allocation will be
the DRC is not part of the Central Afri- public revenue through quicker imple- key, as the government will favor large,
can Monetary and Economic Community mentation of reforms. Investment funds game-changing projects with a direct
and has its own central bank: the Central and sector-specific support funds will also impact on job creation, poverty allevi-
Bank of the Congo (BCC). According to a be created. ation and other national priorities. As
study ran by the BCC in 2017, the DRC a guiding principle, strategies will aim
faces major challenges to strengthening The government has generated a compre- to increase tax revenue not by raising
its financial system, encouraging private hensive strategy for attracting both local rates, but by expanding the tax base and
and individual investment, improving and foreign private investment, which enhancing the transparency and stability
governance in the sector and increasing hinges on the improvement of the busi- of the tax system.
access to the formal and decentralized ness climate across sectors, specifically in
financial system. energy and mining. Investment will be Ameliorating the business
oriented towards critical economic sectors climate
The BCC report states that the DRC’s as well as important geographical loca-
economy is composed of 17 commer- tions. Tax holidays, custom tax exemp- The process of improving the business
cial banks, a single savings bank, three tions and other fiscal incentives will be climate is one of the most important gov-
non-bank financial institutions, three put in place. The DRC’s vast infrastruc- ernmental objectives. Indeed, attracting
specialized financial institutions, 137 sav- ture program will require an increasing investments, creating jobs and fostering
ings and credit cooperatives, five financial number of public-private partnerships sustainable and inclusive development
companies and 23 microfinance institu- and similar models to be promoted by the are conditioned by a healthier business
2020 Special EditionInvest in the Energy Sector
of the Democratic Republic of the Congo
17
climate and enhanced legal and judicial process and make it transparent. • Revamp sector-specific regulations to
security. • Simplify the process of obtaining a make them flexible and modern, and
building permit, transfer of ownership restructure the tax exemption system.
It is within this framework that the new and connectivity to medium voltage • Promote economically strong sectors
roadmap of government reforms set to electricity. and an entrepreneurial culture in the
improve the business climate has been • Simplify the procedures, deadlines and DRC.
approved. The plan goes beyond reforms costs of conducting cross-border trade
relative to the World Bank’s Ease of and obtaining banking loans. Authorities have developed an ambitious
Doing Business Index, which focuses on • Reduce the procedures, times and costs economic diversification plan, which aims
only a few specific indicators. Instead, the of commercial disputes and clarify the to increase economic growth and reduce
government has cited seven objectives conditions of entry, stay and residence of poverty levels while improving access to
with the aim of improving local busi- foreign investors in the DRC. electricity for its people. The NSDP re-
ness operating conditions and increasing • Find a long-term solution to the issue lies on strong participation from the local
foreign direct investment: of licenses, permits and specific autho- and international investment community,
rizations, as well as the tax collection as well as strict monitoring of public
• Further simplify the business creation system of duties, taxes and fees. expenses and increased tax revenue.18
An Array of
Natural Resources
The Democratic Republic of the Congo is considered one of the richest country in the world in terms
of natural resources. It boasts a thriving mining sector and is currently in transition towards a more
diversified economy. Petroleum, solar and hydro are set to play an increasingly influential role in the
country’s economy and the country offers immense opportunities as just 2.5% of the DRC’s formida-
ble hydro potential has been developed to date, while its offshore area is seen by petroleum operators
as an attractive investment destination surrounded by oil producing neighbors.
Bondo
KEY Gemena
Lisala Buta Isiro
Diamonds
Gold Bumba Mongbwalu
Coltan
Copper, Cobalt Mbandaka Kisangani
Mbandaka
Tin
Ubundu
Manganese
Goma
Lead and Zinc m
Hydroelectric
Bandundu Lodia
Liebo
KINSHASA Kikwit
Kasongo
Matidi Kanaga
Tshikapa Kabalo
Moanda
Coal Kamina
Uranium
Oil
Congo River
250km
Copper belt
Lubumbashi
Tin region
City
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CONTACT US
João G. Marques, Jean-Pierre de Carvalho Katie Brock
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2020 Special Edition
joao@africaoilandpower.com jp@africaoilandpower.com k.brock@africaoilandpower.comYou can also read
