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The Rural Electricity Service Company
Energy access - developing countries
The DSC is a concept created by EDF and the ADEME to offer a range of services supported by a company that is managed locally and governed by local law.
In Benin and elsewhere, TV encourages open-mind. At school, it also helps to go further into pedagogic support. © Guy Marboeuf
The purpose of DSCs is to sell decentralised energy services, improving the daily life of rural households (providing domestic and public lighting, the ability to prepare hot meals, access to the radio, television, telephone, etc.). They also supply energy to craftsmen, tradesmen, industry, and the health and social sectors (schools, health centres, etc.). Their mission is to serve at least 10,000 customers, representing around 60,000 to 150,000 people, depending on the size and structure of the families, over a defined area, which they are granted under a concession for a renewable period of 15 to 25 years.
The strength of these DSCs is that they are integrated in the local socio-economic fabric: they are companies governed by local law, employing local managers and personnel. The difficulty involves designing sustainable projects, in other words, those capable of financing themselves and taking responsibility for their own development. Sustaining decentralised services companies in disadvantaged regions, where customers use little energy and have low financial resources, is particularly difficult. It requires the creation of a specific economic model, combining subsidies and appropriate tariffs.
The DSCs install, operate, maintain and renew the electricity supply equipment and installations (small diesel generators and micro-network, photovoltaic solar kits, hybrid solar-diesel or biofuel-diesel plants, connection to the national network, etc.). Once the subsidy for company formation (60 to 80% of the initial investment cost) has been awarded, the company is expected to operate as a commercial enterprise, balancing its own accounts and generating the profits needed to develop its business and pay shareholders.
EDF is involved as a "start-up aid", providing the capital and skills required for the creation and operation of these companies. When the viability of a DSC is guaranteed, EDF transfers its entire stake to its local partner, who will be responsible for the long-term running of the company.
6 rural DSCs have been set up with EDF's support in 5 countries (South Africa, Botswana, Mali, Morocco, Senegal), bringing electricity to more than 450,000 people by the beginning of 2013. It is EDF's aim to supply power to a further 1 million people in the next 5 years, primarily through the development of new programmes in Africa and Asia.
The strength of these DSCs is that they are integrated in the local socio-economic fabric: they are companies governed by local law, employing local managers and personnel. The difficulty involves designing sustainable projects, in other words, those capable of financing themselves and taking responsibility for their own development. Sustaining decentralised services companies in disadvantaged regions, where customers use little energy and have low financial resources, is particularly difficult. It requires the creation of a specific economic model, combining subsidies and appropriate tariffs.
The DSCs install, operate, maintain and renew the electricity supply equipment and installations (small diesel generators and micro-network, photovoltaic solar kits, hybrid solar-diesel or biofuel-diesel plants, connection to the national network, etc.). Once the subsidy for company formation (60 to 80% of the initial investment cost) has been awarded, the company is expected to operate as a commercial enterprise, balancing its own accounts and generating the profits needed to develop its business and pay shareholders.
EDF is involved as a "start-up aid", providing the capital and skills required for the creation and operation of these companies. When the viability of a DSC is guaranteed, EDF transfers its entire stake to its local partner, who will be responsible for the long-term running of the company.
6 rural DSCs have been set up with EDF's support in 5 countries (South Africa, Botswana, Mali, Morocco, Senegal), bringing electricity to more than 450,000 people by the beginning of 2013. It is EDF's aim to supply power to a further 1 million people in the next 5 years, primarily through the development of new programmes in Africa and Asia.
At the end of 2012, more than 450,000 people have access to energy as a result of programmes launched by EDF.
Conditions for success
Feedback from work performed over the last 15 years has highlighted key conditions for success, based on the following criteria:
- the establishment of a transparent and stable regulatory and institutional framework;
- the creation of an appropriate finance system (which includes investment assistance);
- the optimisation of technological choices according to local conditions;
- the preparation and training of local players capable of taking full responsibility for the development of these projects;
- a mandatory financial contribution from customers, linked to their ability to pay;
- the robustness of the model that involves a local company being set up to manage the whole chain (construction of facilities, maintenance, renewal).
Taking a closer look
