2016年-世界发展银行全球_Financial_Viability_of_Electricity_Sectors_in_Sub-Saharan_Africa___Quasi-Fiscal_Deficits_and_Hidden_Costs_102页_1mb

Summary of "Financial Viability of Electricity Sectors in Sub-Saharan Africa: Quasi-Fiscal Deficits and Hidden Costs"

Core Content

This paper analyzes the financial viability of electricity sectors in 39 Sub-Saharan African (SSA) countries, focusing on quasi-fiscal deficits (QFDs) and hidden costs. It builds on the methodology used in the Africa Infrastructure Country Diagnostic (AICD) and evaluates the current and potential cost structures under two scenarios: existing utility performance and benchmark performance.

Main Points

• Financial Viability Status: Only two countries (Seychelles and Uganda) have financially viable electricity sectors under current performance. Most countries fail to cover operating expenditures, and several lose more than US$0.25 per kilowatt-hour (kWh) sold.

• Quasi-Fiscal Deficits: These deficits, representing the difference between the revenue collected and the cost of service, average 1.5% of GDP across SSA. In some countries, they exceed 5% of GDP.

• Benchmark Performance: Under the benchmark scenario, the number of countries with a QFD below zero increases to 13, and further to 21 when oil price impacts are considered. This suggests that tariff increases may not be necessary in some cases if efficiency is improved.

• Hidden Costs: Hidden costs include transmission and distribution (T&D) losses, bill collection inefficiencies, overstaffing, and underpricing. T&D and collection losses are significant and less politically sensitive than underpricing, making them a priority for policy focus.

• Tariff Adjustments: Without changes in the power mix, tariffs would need to increase by an average of US$0.04 per kWh sold at benchmark performance, which is a 24% increase from current levels.

• Access and Consumption: Electricity access in SSA remains low, with only 35% in 2012, and per capita consumption is among the lowest globally. This has led to high reliance on diesel and emergency power, which are expensive and inefficient.

• Impact of Power Shortages: Power outages cost SSA economies between 1% and 4% of GDP annually. Firms in the region report losing 8.6% of annual sales due to power interruptions, and 50% own or share backup generators.

• Cost Recovery Levels: There are six levels of financial viability, ranging from not covering operating expenditures to covering environmental externalities. Most utilities in SSA operate at level 1 or 2, where they rely heavily on subsidies and government support.

• Methodology: The study uses a simplified taxonomy of financial viability and defines QFDs as the difference between the revenue collected and the cost of service. It includes hidden costs such as underpricing, T&D losses, undercollection of bills, and overstaffing.

• Data and Analysis: The study incorporates data from various sources, including financial statements, infrastructure reports, and economic indicators. It acknowledges limitations due to data gaps and methodological assumptions.

• Policy Implications: The paper emphasizes the need for policy reforms to address hidden costs and improve financial viability. It also highlights the importance of tariff adjustments, operational efficiency, and infrastructure improvements to achieve universal access and sustainable development.

Key Information

• Quasi-Fiscal Deficit (QFD): A measure of the financial burden on governments due to inefficient utility operations. It is calculated as the difference between the revenue collected and the cost of service.

• Hidden Costs: Include T&D losses, bill collection inefficiencies, overstaffing, and underpricing. T&D and collection losses are more significant and less politically sensitive than underpricing.

• Tariff Increases: Required to cover costs under benchmark performance, with a median increase of US$0.04 per kWh, or 24% of existing tariffs.

• Country Coverage: The study covers 39 countries, expanding on the AICD's earlier work. It uses data from 2014 and includes a sensitivity analysis to oil prices, hydrology, exchange rates, and discount rates.

• Sector Challenges: Low access, high diesel dependency, poor operational efficiency, and inadequate infrastructure contribute to the financial challenges of the electricity sector in SSA.

• Policy Focus: The paper suggests that addressing T&D and collection losses could be a strategic area for policy reform to reduce QFDs and improve financial viability.

Structure and Methodology

• The study uses a two-scenario approach: current performance and benchmark performance.
• It calculates QFDs based on the difference between revenue and cost of service.
• Hidden costs are broken down into underpricing, T&D losses, undercollection of bills, and overstaffing.
• The methodology includes assumptions on capital cost, staffing levels, and sector structure.
• Sensitivity analyses are conducted to evaluate the impact of oil prices, hydrology, exchange rates, and discount rates on QFDs.

Conclusion

• The electricity sector in SSA is largely financially unviable, with significant hidden costs and quasi-fiscal deficits.
• Improving operational efficiency and addressing T&D and collection losses can reduce the need for tariff increases.
• Policy reforms should focus on cost recovery, tariff adjustments, and infrastructure improvements to achieve universal access and sustainable development.