The Rural Energiser

Exploring innovation in African green energy generation and distribution

The economic growth of much of the African continent hinges on reliable access to affordable power.

Large swaths of Africa, especially its rural areas, are woefully underserved by the basic utilities required for sustained economic growth and development. Electricity is one of these. Recent decades have witnessed an ongoing campaign by African leaders, international development banks, and the donor community to improve electrification rates. Their efforts, coupled with a more recent push by new ventures deploying solar home systems and other micro utility solutions, have resulted in progress. However, the cost and inefficiency of extending national utilities to rural communities paired with the relative unaffordability of subscale solutions leave serious gaps for alternative longterm solutions.

Enter Virunga Power. Named after the impressive range of volcanic mountains that stretches across the border regions of Uganda, Rwanda, and the Democratic Republic of Congo, Virunga Power’s vision is to become Africa’s first rural utility that operates at scale. Over the last 10 years, Virunga Power has been developing megawatt-scale run of river hydropower projects and rural distribution grids across East and Southern Africa.

“There remains a significant need for energy in rural areas. Affordable and reliable energy is essential for sustained economic growth, improvements in health and education, and greater rural industrialisation,” Brian Kelly, Founder and CEO, tells us.

Prior to starting Virunga Power, Kelly worked to finance the rapidly growing power generation sectors across Asia. This experience showed him how important infrastructure is to improving lives and livelihoods in emerging economies and informed his vision for Virunga.

“I spent much of my 20s as an investment banker advising large Chinese and Indian utilities on acquisitions of infrastructure assets and utilities in Asia and beyond. That work gave me an understanding of how important scale and proper financing are to the viability of infrastructure projects,” he says.

After several years in this role, Kelly felt it was time to apply his experience in another part of the world.

“I had always wanted to be an entrepreneur. My banking work gave me exposure to the tail end of the electrification push in Asia and an up-close view of the impact infrastructure can have in improving lives. With Africa looking to move towards universal electrification, I saw an opportunity to try to meet the needs of African communities,” he continues.

“Providing reliable energy to a rural area at a reasonable price will stimulate development and productivity. Producers will produce more and consumers will consume more. Markets and entrepreneurial opportunities will expand. That is how it played out in Europe, America, Asia, and elsewhere over the past 100 years, and there is no reason that cannot be the case in Africa as well.”

In 2011, Kelly founded Virunga

Power with the intention of putting his idea to the test. “From the beginning we committed to building a solution to provide reliable, clean, and affordable energy. We did not want to be charging people $1/kWh or more. You can’t drive local growth in a globalised world with electricity costs that high. It took a long time to understand the different technologies, markets, regulatory environments, and industry players, but we are confident our diligence and persistence will pay dividends for Virunga and its customers,” Kelly says.

AN ANSWER TO MANY CHALLENGES

Virunga’s technology of choice is run of river hydropower, a renewable and environmentally friendly source of electricity.

Used throughout the world for over 100 years, it relies on the energy contained in the small to medium sized rivers and streams that are abundant in the rural areas of East and Southern Africa. Because bringing a

project online requires significant development time, capital, and engineering expertise, most other private developers focus on technologies like solar and wind.

“For Virunga, run of river hydropower provides rural communities a very cost-effective source of electricity. Intermittent power sources (e.g. solar or wind) must rely on oversized battery or diesel backup to reliably serve communities,” Kelly says. “While battery storage costs are coming down and can be useful and costcompetitive solutions in developed markets over short periods of time, storing power for days at a time, which can be necessary for rural, off-grid applications can be extremely expensive on a per kilowatt hour basis (US$1 and up) and typically supports only low intensity uses such as lighting, cell phone charging, and domestic appliances.