Publication:
African Utilities during COVID-19: Challenges and Impacts

Loading...
Thumbnail Image
Files in English
English PDF (2.89 MB)
613 downloads
English Text (156.15 KB)
26 downloads
Date
2021-08-12
ISSN
Published
2021-08-12
Editor(s)
Abstract
The COVID-19 pandemic has spurred unprecedented economic disruption globally. The full scope of the virus’s impact on human health and economic activity remains to be seen, but two things are clear: (1) the most fragile economies, and most vulnerable segments of the world’s population, are least able to mitigate the impact, and (2) reliable and affordable utility services, electricity, water and sanitation, and internet and telephony, are critically important in slowing the spread of the virus. Many utility service providers in Sub-Saharan Africa were, in 2019, already under financial duress. The COVID-19 health crisis has and will continue to exacerbate such duress and jeopardize their ability to provide essential services. As the region faces its first recession in a quarter century, economic growth is expected to decline from 2.4 percent in 2019 to between –2.1 and –5.1 percent in 2020. Fiscal deficits are projected to widen amid falling government revenues. The harmful impacts on the energy sectors of the countries of Sub-Saharan Africa are expected to far exceed those on other sectors.
Link to Data Set
Citation
Balabanyan, Ani; Semikolenova, Yadviga; Hankinson, Denzel; Nash, Stephen; Parcels, Christopher. 2021. African Utilities during COVID-19: Challenges and Impacts. Utility Performance and Behavior in Africa Today;. © World Bank. http://hdl.handle.net/10986/36179 License: CC BY 3.0 IGO.
Associated URLs
Associated content
Report Series
Other publications in this report series
Journal
Journal Volume
Journal Issue
Collections

Related items

Showing items related by metadata.

  • Publication
    Analyzing Foregone Cash to Improve Utility Performance
    (World Bank, Washington, DC, 2021-08-12) Balabanyan, Ani; Hankinson, Denzel; Nash, Stephen; Singh, Arun
    The level of performance of an electric utility is determined by the soundness of its financial situation, the efficiency of its technology, and the quality of service it provides customers. Its financial underpinning is a balance of costs and revenue (from customer payments, government, and other sources). But revenue is not as straightforward as it might seem. The concept of foregone cash addresses the ‘cash on the table’ that pays for operations and servicing debt (revenue collected divided by the cost of operations and debt). The problem is the table may not have all the cash that ought to be there, such as money owed because of nonpayment’s by customers and money lost through inefficiencies in power generation or delivery. Consequently, there is a latent revenue that, if fixed, can provide vital improvements to a utility’s financial performance. This note analyzes the elements involved in understanding foregone cash in the context of cost recovery.
  • Publication
    Modernization of the District Heating Systems in Ukraine : Heat Metering and Consumption-Based Billing
    (Washington, DC: World Bank, 2012-03-20) Semikolenova, Yadviga; Pierce, Lauren; Hankinson, Denzel
    District heating (DH) plays a critical role in meeting basic heating needs in Ukraine, but the sector faces serious challenges that must be resolved to avoid collapse. For DH companies, the primary concern is financial sustainability. Companies lack the revenue to invest adequately in DH networks leading to lower quality of service and higher operating costs. For customers, the primary concern is quality of service and affordability. Artificially low prices have resulted in the continued deterioration of DH supply assets (and gas supply assets) resulting in lower heat supply quality. Low DH prices have provided little incentive for investment in energy efficiency. As a result, Ukraine is one of the highest energy intensive countries in the world. Ukraine, together with other Former Soviet Union countries, did not follow the path chosen by their neighbors to modernize their DH sectors. Many countries of Eastern Europe enacted critical reforms in the 1990s to address problems related to affordability, quality of service, and financial sustainability similar to those now facing Ukraine. Evidence from these countries suggests that these challenges currently facing Ukraine, while difficult, are far from insurmountable. This study situates heat metering and consumption-based billing in the context of the various DH sector reforms needed in Ukraine. It builds on the work of previous studies including the recommendations of the 2010 Energy Sector Management Assistance Program (ESMAP)-funded study, prepared by the World Bank that identified how to improve the DH sector in Kharkiv. That study outlined the potential for investments in DH systems in Kharkiv and other similar cities in Ukraine in both heat supply and demand side. It also recognized that policy changes needed to be initiated in order to create the enabling environment for this potential to be realized.
  • Publication
    Utility Performance and Behavior in Africa Today
    (World Bank, Washington, DC, 2021-08-12) Balabanyan, Ani; Semikolenova, Yadviga; Singh, Arun; Lee, Min A.
    Electric utilities are central to the energy development agenda of Sub-Saharan Africa, as expressed in Sustainable Development Goal 7 (SDG 7), which commits the international community to ensure access to affordable, reliable, sustainable, and modern energy for all by 2030. Over the previous two decades, utilities in Sub-Saharan Africa have made impressive strides in expanding the delivery of modern electricity services to households and businesses. The continent’s electricity access rate increased from 28 percent in 2000 to 48 percent in 2018, and generation capacity grew from 63 gigawatts in 2000 to 106 gigawatts in 2017. However, COVID-19 threatens to upend these gains, rendering the challenge of reaching SDG 7 even more urgent and, at the same time, even more difficult to achieve. In response, utilities will have to step up to the task of providing service to millions who now live without electricity, ensure reliable electricity for health facilities and schools, become credible off-takers for private developers of renewable energy, and promote regional energy trade.
  • Publication
    Cost Recovery and Financial Viability of the Power Sector in Developing Countries
    (World Bank, Washington, DC, 2020-01) Huenteler, Joern; Hankinson, Denzel; Rosenthal, Nicole; Balabanyan, Ani; Kochnakyan, Arthur; Nguyen, Tu Chi; Rana, Anshul; Foster, Vivien
    This paper analyzes power utilities in 15 jurisdictions to understand the determinants of success for reforms aimed at improving financial viability and cost recovery in the power sector and the impacts of these reforms on metrics of sector performance. The analysis finds that electricity tariffs are rarely high enough to cover the full costs of service delivery, even where the cost of service is low, and that few countries adequately manage volatile costs and maintain cost recovery levels over time. Almost everywhere, power utilities often impose a substantial fiscal burden and contingent liabilities on government budgets. Over the past 30 years, cost recovery levels have increased on average, but progress has been uneven, with over half of the case study jurisdictions experiencing a decline compared with the pre-reform period. The record of reforms of price formation, especially tariff setting through regulatory agencies, is mixed. On average, countries that have made more progress on utility governance and decision making perform better on cost recovery. The paper concludes with proposed modifications to the conceptual framework underpinning the economic analysis of power sector reforms as well as immediate, practical implications for understanding cost recovery as part of the overall power sector reform agenda.
  • Publication
    Keeping Warm
    (World Bank, Washington, DC, 2015-03) Balabanyan, Ani; Hofer, Kathrin; Finn, Johua; Hankinson, Denzel
    This report identifies the most viable heating options and related investment measures to meet heating demand in urban residential and public buildings in Tajikistan. The report provides an overview of the condition and performance of the urban heating sector and building stock, and assesses, in detail, the situation in Dushanbe and Khujand. The report gives introduction in section one. Section two gives an overview of the physical, institutional, and regulatory characteristics of the urban heating sector in Tajikistan and includes an analysis of the urban building stock. Sections three and four describe the heat supply and demand characteristics of Dushanbe and Khujand and estimate the unmet heating demand in these cities. Section five evaluates the available supply and demand side heating options and investment measures that can be implemented to improve the heating sectors in the target cities. Section six recommends priority investment measures for each building type, identifies related policy actions to facilitate implementation of the recommended investments, highlights key implementation issues, and describes the next steps necessary to implement them.

Users also downloaded

Showing related downloaded files

  • Publication
    Economic Recovery
    (World Bank, Washington, DC, 2021-04-06) Malpass, David; Georgieva, Kristalina; Yellen, Janet
    World Bank Group President David Malpass spoke about the world facing major challenges, including COVID, climate change, rising poverty and inequality and growing fragility and violence in many countries. He highlighted vaccines, working closely with Gavi, WHO, and UNICEF, the World Bank has conducted over one hundred capacity assessments, many even more before vaccines were available. The World Bank Group worked to achieve a debt service suspension initiative and increased transparency in debt contracts at developing countries. The World Bank Group is finalizing a new climate change action plan, which includes a big step up in financing, building on their record climate financing over the past two years. He noted big challenges to bring all together to achieve GRID: green, resilient, and inclusive development. Janet Yellen, U.S. Secretary of the Treasury, mentioned focusing on vulnerable people during the pandemic. Kristalina Georgieva, Managing Director of the International Monetary Fund, focused on giving everyone a fair shot during a sustainable recovery. All three commented on the importance of tackling climate change.
  • Publication
    Media and Messages for Nutrition and Health
    (World Bank, Washington, DC, 2020-06) Calleja, Ramon V., Jr.; Mbuya, Nkosinathi V.N.; Morimoto, Tomo; Thitsy, Sophavanh
    The Lao People’s Democratic Republic (Lao PDR) has experienced rapid and significant economic growth over the past decade. However, poor nutritional outcomes remain a concern. Rates of childhood undernutrition are particularly high in remote, rural, and upland areas. Media have the potential to play an important role in shaping health and nutrition–related behaviors and practices as well as in promoting sociocultural and economic development that might contribute to improved nutritional outcomes. This report presents the results of a media audit (MA) that was conducted to inform the development and production of mass media advocacy and communication strategies and materials with a focus on maternal and child health and nutrition that would reach the most people from the poorest communities in northern Lao PDR. Making more people aware of useful information, essential services and products and influencing them to use these effectively is the ultimate goal of mass media campaigns, and the MA measures the potential effectiveness of media efforts to reach this goal. The effectiveness of communication channels to deliver health and nutrition messages to target beneficiaries to ensure maximum reach and uptake can be viewed in terms of preferences, satisfaction, and trust. Overall, the four most accessed media channels for receiving information among communities in the study areas were village announcements, mobile phones, television, and out-of-home (OOH) media. Of the accessed media channels, the top three most preferred channels were village announcements (40 percent), television (26 percent), and mobile phones (19 percent). In terms of trust, village announcements were the most trusted source of information (64 percent), followed by mobile phones (14 percent) and television (11 percent). Hence of all the media channels, village announcements are the most preferred, have the most satisfied users, and are the most trusted source of information in study communities from four provinces in Lao PDR with some of the highest burden of childhood undernutrition.
  • Publication
    South Asia Development Update, April 2024: Jobs for Resilience
    (Washington, DC: World Bank, 2024-04-02) World Bank
    South Asia is expected to continue to be the fastest-growing emerging market and developing economy (EMDE) region over the next two years. This is largely thanks to robust growth in India, but growth is also expected to pick up in most other South Asian economies. However, growth in the near-term is more reliant on the public sector than elsewhere, whereas private investment, in particular, continues to be weak. Efforts to rein in elevated debt, borrowing costs, and fiscal deficits may eventually weigh on growth and limit governments' ability to respond to increasingly frequent climate shocks. Yet, the provision of public goods is among the most effective strategies for climate adaptation. This is especially the case for households and farms, which tend to rely on shifting their efforts to non-agricultural jobs. These strategies are less effective forms of climate adaptation, in part because opportunities to move out of agriculture are limited by the region’s below-average employment ratios in the non-agricultural sector and for women. Because employment growth is falling short of working-age population growth, the region fails to fully capitalize on its demographic dividend. Vibrant, competitive firms are key to unlocking the demographic dividend, robust private investment, and workers’ ability to move out of agriculture. A range of policies could spur firm growth, including improved business climates and institutions, the removal of financial sector restrictions, and greater openness to trade and capital flows.
  • Publication
    State and Trends of Carbon Pricing 2024
    (Washington, DC: World Bank, 2024-05-21) World Bank
    This report provides an up-to-date overview of existing and emerging carbon pricing instruments around the world, including international, national, and subnational initiatives. It also investigates trends surrounding the development and implementation of carbon pricing instruments and some of the drivers seen over the past year. Specifically, this report covers carbon taxes, emissions trading systems (ETSs), and crediting mechanisms. Key topics covered in the 2024 report include uptake of ETSs and carbon taxes in low- and middle- income economies, sectoral coverage of ETSs and carbon taxes, and the use of crediting mechanisms as part of the policy mix.
  • Publication
    Remarks at the United Nations Biodiversity Conference
    (World Bank, Washington, DC, 2021-10-12) Malpass, David
    World Bank Group President David Malpass discussed biodiversity and climate change being closely interlinked, with terrestrial and marine ecosystems serving as critically important carbon sinks. At the same time climate change acts as a direct driver of biodiversity and ecosystem services loss. The World Bank has financed biodiversity conservation around the world, including over 116 million hectares of Marine and Coastal Protected Areas, 10 million hectares of Terrestrial Protected Areas, and over 300 protected habitats, biological buffer zones and reserves. The COVID pandemic, biodiversity loss, climate change are all reminders of how connected we are. The recovery from this pandemic is an opportunity to put in place more effective policies, institutions, and resources to address biodiversity loss.