AfDB grants Congo $1.5m for its energy sector

From the newsletter

The African Development Bank (AfDB) has granted the Republic of Congo $1.5 million to support its energy sector. The funds are split into two grants: the first will finance studies for hydroelectric dam development, and the second will finance the feasibility study and detailed design of transmission lines.

• The Republic of Congo's grid relies mainly on hydropower, which accounts for over 90% of its total installed capacity. However, the country has only utilised less than 5% of its total feasible hydropower capacity of 3,942 MW.

• About half its population is connected to electricity, with 65.6% in urban areas and 12.7% in rural areas. The country is working to improve access to electricity, especially in rural areas, focusing on improving the quality and access to electricity services.

More details

• The first grant, of $585,000, will come from the Middle Income Country Technical Assistance Fund, and the second grant, of $995,000, is funded by the Korea-Africa Economic Cooperation Trust Fund (KOAFEC).

• In its statement, the AfDB said that the grants will be used to prepare core, short-term investment projects, enabling Congo to achieve its objectives in terms of energy access, in alignment with “Mission 300,” an initiative between the African Development Bank and the World Bank aimed at supplying electricity to 300 million people in Africa by 2030. Pictured are Ludovic Ngatse (left), Congolese Minister of the Economy, with Solomane Koné (right), the AfDB’s acting Director General for the Central Africa region.

• Congo is the fourth-largest oil producer in sub-Saharan Africa and possesses significant untapped potential in natural gas and renewables. Its government is diversifying its energy mix and expanding energy access, particularly in rural areas. In 2024, it received $195 million in funding from the World Bank to support connecting over 1.75 million people, with a special target on schools.   

• The Congo has restructured its electricity market, allowing private companies to manage public electricity services. It created Énergie Électrique du Congo (E2C) in 2018 to expand electricity access, support renewable energy investments and attract private investment for infrastructure development. The government did away with fuel subsidies in 2023 to free up capital for infrastructure development and also to discourage its consumption.

• The government also offers various tax incentives, including a 50% decrease in corporate income tax for businesses operating in remote regions and reduced taxes on dividends and capital gains for companies with at least 25% local ownership.

• Several major infrastructure projects are currently in the development stage. Among these is a $9.4 billion initiative, backed by China Overseas, which is projected to add 600-800 MW to the country's electricity generation capacity. Construction is expected to begin in early 2025, with completion slated for 2030. 

• The government is also planning solar investments. This includes the construction of a 50 MW solar photovoltaic plant in the Ignié special economic zone, developed in partnership with Tinda Energy and China's Complant. It has also partnered with the United Nations Development Programme and is advancing rural electrification through micro-hydropower plants and solar energy solutions.

• Congo is opening up its market, and this year, it will host the first ever Congo Energy & Investment Forum. Check out our 2025 event listing.

Our take

• The country's oil and gas resources can be utilised to finance its energy transition. The oil and gas generate over $6 billion in annual revenue, which could connect the entire population through solar home systems, especially those in rural areas with low electricity demands.

• The removal of fuel subsidies in Congo, while potentially challenging in the short term, presents a significant opportunity to accelerate the adoption of renewable energy. By eliminating these subsidies, the government not only frees up substantial capital for infrastructure development but also levels the playing field for renewables. 

• Congo has the opportunity to attract more energy investors by hosting the first Congo Energy & Investment Forum. It can serve as a platform to market the country and streamline regulations and policies to attract further private investment.