A World Bank report emphasizes that well-managed and well-regulated electric utilities in developing countries are essential to meet rising power demand and integrate more renewable energy into the grid.
The report entitled, “The Critical Link: Empowering Utilities for the Energy Transition,” evaluates over 180 utilities in more than 90 countries and reveals that only 40% can cover their operating and debt service costs.
The most acute challenges are in low-income and lower-middle-income countries, where high costs, low tariffs, transmission and distribution losses, inefficient payment collection, and poor planning create cycles of underperformance, straining government budgets and leaving many consumers without reliable power.
According to the report, investors can lower transition costs by offering low-interest loans to utilities and using tools to protect private utility investors from risks.
Guangzhe Chen, World Bank Vice President for Infrastructure stated, “Policymakers, regulators, and development financiers must empower utilities through robust policies and long-term financing to fulfill the promise of clean and accessible energy for all.”
