Some Public Benefit Policy Aspects in Reforming the Power Sectors in East and Southern Africa

The document analyzes power sector reforms in East and Southern Africa, arguing that current commercialization and privatization efforts often exclude the poor. Through case studies of Ethiopia, Tanzania, and Zimbabwe, it highlights how high connection costs, restrictive lending terms for local entrepreneurs, and a lack of integrated public-benefit policies hinder rural electrification and urban energy access.

• Power sector reforms in the East and Southern African region generally prioritize commercialization and privatization, which often conflicts with the goal of providing affordable electricity to the poor. The author argues that rural electrification and urban poor energy access are typically treated as "stand-alone" programmes rather than being integrated into the core reform process.
• In Ethiopia, the transition of the Ethiopian Electric Light and Power Authority (EELPA) to the Ethiopian Electric Power Corporation (EEPCO) in 1997 introduced commercial criteria that make rural electrification unattractive for the utility. Local private investment is limited by onerous bank lending terms, including requirements for full collateral and high interest rates (10.5% to 12.5%).
• Tanzania's reform process has seen the lifting of the Tanzania Electric Supply Company (TANESCO) monopoly on generation since 1992, but the utility remains under government control. While a "lifeline" tariff subsidizes the first 100 kWh for households, the high initial cost of connection (approximately US$ 120 for prepaid meters in 2000) remains a significant barrier for the urban poor.
• Zimbabwe's power sector is dominated by the Zimbabwe Electrical Supply Authority (ZESA), which faces a capacity shortfall of 410 MW against a maximum demand of 2,030 MW. Despite a 1999 White Paper proposing unbundling and privatization, implementation is stalled by political and economic crises and a government unwillingness to accept long run marginal cost (LRMC) tariffs.
• Across the studied countries, local middle-level entrepreneurs are potentially willing to provide small-scale power to the poor, but are blocked by financial institutions. In Zimbabwe, for example, interest rates of 25% to 40% and requirements for 100% collateral make rural electrification ventures unrealistic.

APA

Bhagavan, M. (2004). Some Public Benefit Policy Aspects in Reforming the Power Sectors in East and Southern Africa. Stockholm Environment Institute. https://www.sei.org/mediamanager/documents/Publications/Climate/some_public_benefit_eastsouth_africa.pdf

Chicago

Bhagavan, M.R. Some Public Benefit Policy Aspects in Reforming the Power Sectors in East and Southern Africa. Stockholm Environment Institute, 2004. https://www.sei.org/mediamanager/documents/Publications/Climate/some_public_benefit_eastsouth_africa.pdf.

Wikipedia

{{cite report |last1=Bhagavan |first1=M.R. |title=Some Public Benefit Policy Aspects in Reforming the Power Sectors in East and Southern Africa |publisher=Stockholm Environment Institute |date=2004 |url=https://www.sei.org/mediamanager/documents/Publications/Climate/some_public_benefit_eastsouth_africa.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{bhagavan2004some, author = {Bhagavan, M.R.}, title = {{Some Public Benefit Policy Aspects in Reforming the Power Sectors in East and Southern Africa}}, institution = {Stockholm Environment Institute}, year = {2004}, url = {https://www.sei.org/mediamanager/documents/Publications/Climate/some_public_benefit_eastsouth_africa.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }