Africa’s power suppliers can be profitable and still make electricity access affordable for consumers.
That’s according to the World Bank’s report, which looked at utilities’ financial statements and power tariffs in 39 African countries and spending data in 22 household surveys.
It suggests several ways of recovering the cost of supply and making electricity affordable.
That includes improving operational efficiency, installing individual metering, including prepaid meters in low income houses and sharing connection costs.
The report also notes if utilities could reduce combined transmission, distribution and bill collection losses to 10% of transmitted electricity, deficits could disappear in one-third of the countries.
It adds in some nations, the funding gap cannot be bridged solely by eliminating operational inefficiencies and tariff increases are likely needed so “small and frequent” tariff increases could be accepted as long as electricity access is reliable.
Only one in three Africans currently have access to electricity and for those who do, power outages can be common as cash-strapped utilities struggle to maintain steady, reliable supply because of lack of investment in their aging infrastructure, the bank states.
Makhtar Diop, World Bank’s Vice President for Africa said: “We won’t be able to accelerate progress towards universal access without improving the performance of utilities in Sub-Saharan Africa. Making electricity connection and consumption more affordable while minimising utilities’ financial losses is therefore a priority.”