DRC’s SNEL Utility Faces $3 Billion Debt Crisis as Restructuring Plan Takes Shape
Société Nationale d’Électricité (SNEL), the Democratic Republic of Congo’s (DRC) state-owned power utility, is burdened with a debt exceeding $3 billion—more than three times its 2022 sales, according to the African Development Bank’s (AfDB) recent Compact Énergétique National report.
The debt is comprised of financial obligations (over 75%), commercial debt (13%), tax liabilities (11%), and social debt (0.3%). Financial debt alone surpasses $2 billion, stemming primarily from mining contracts (42%) and loans from multilateral investment banks (58%).
In response, the Congolese government is committed to restructuring SNEL’s commercial and financial debt, which accounts for 88% of its total liabilities.
A key element of the plan involves engaging technical and financial partners to purchase parts of SNEL’s domestic debt. A comprehensive restructuring study is expected to be completed by the end of 2026.
This debt restructuring is part of broader reforms aimed at ensuring SNEL can fully cover its operating costs by 2029. The initiatives will involve separating assets, accounts, and personnel by value chain segments—production, transport, distribution, and retail—along with the introduction of capacity-building programs and performance-based incentives. The government also plans to implement a tax amnesty to address SNEL’s outstanding arrears with various financial authorities.
Further changes include the establishment of a regular payment mechanism for official institutions and other legitimate claimants, as well as a new tariff regime that will allow SNEL to cover operational costs and provide efficient services.
SNEL’s financial difficulties are worsened by electricity tariffs that fail to cover operational expenses. Currently, electricity is billed at an average rate of $0.09 per kilowatt-hour, far below the cost of production.
Additionally, payment arrears to public entities have accumulated to around $110 million, and the bill collection rate remains low—just 61% in 2022.
These factors hinder SNEL’s ability to invest in infrastructure maintenance and expansion, leading to high technical and non-technical losses, which were estimated at 46% in 2022.
SNEL’s restructuring is part of a broader transformation of the DRC’s energy sector. Under the National Energy Compact, the government aims to mobilize nearly $37 billion by 2030, with $20 billion expected to come from private sector investments.
The goal is to raise the country’s electrification rate from 21.5% in 2024 to 62% by 2030, providing electricity to an additional 60 million people.
