IDEAS home Printed from https://ideas.repec.org/p/wbk/wbrwps/8407.html
   My bibliography  Save this paper

Why are connection charges so high ? an analysis of the electricity sector in Sub-Saharan Africa

Author

Listed:
  • Blimpo,Moussa Pouguinimpo
  • Mcrae,Shaun David
  • Steinbuks,Jevgenijs

Abstract

This study develops and structurally estimates a model of household and electric utility behavior to describe how the low access rates and high connection charges that are common in the Sub-Saharan Africa region arise from regulated electricity tariffs being set too low. As a result, the utilities lose money on each connected customer and low electricity consumption by households makes it difficult to recover the cost of providing a connection. For each possible choice of the regulated tariff, the optimal upfront connection charge is computed that will maximize profits for the utility in its service territory. Higher tariffs are associated with lower optimal connection charges and higher electrification rates. Nonetheless, due to households'low willingness to pay for electricity services, the equilibrium electrification rates in the model are much lower than 100 percent. Future advances in electrification will require higher incomes, increased coverage of the distribution network, and lower connection costs.

Suggested Citation

  • Blimpo,Moussa Pouguinimpo & Mcrae,Shaun David & Steinbuks,Jevgenijs, 2018. "Why are connection charges so high ? an analysis of the electricity sector in Sub-Saharan Africa," Policy Research Working Paper Series 8407, The World Bank.
    • Handle: RePEc:wbk:wbrwps:8407
    as

    Download full text from publisher

    File URL: http://documents.worldbank.org/curated/en/659251523907847219/pdf/WPS8407.pdf
    Download Restriction: no
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Rebekka Besner & Kedar Mehta & Wilfried Zörner, 2023. "How to Enhance Energy Services in Informal Settlements? Qualitative Comparison of Renewable Energy Solutions," Energies, MDPI, vol. 16(12), pages 1-22, June.
    2. Bajo-Buenestado, Raúl, 2021. "The effect of blackouts on household electrification status: Evidence from Kenya," Energy Economics, Elsevier, vol. 94(C).
    3. Rubanda, Muhumuza Ezra & Senyonga, Livingstone & Ngoma, Mohammed & Adaramola, Muyiwa S., 2023. "Energy market integration: Harmonizing tariff recourse policies in East Africa," Utilities Policy, Elsevier, vol. 84(C).
    4. Ssennono, Vincent Fred & Ntayi, Joseph M. & Buyinza, Faisal & Wasswa, Francis & Aarakit, Sylvia Manjeri & Mukiza, Chris Ndatira, 2021. "Energy poverty in Uganda: Evidence from a multidimensional approach," Energy Economics, Elsevier, vol. 101(C).
    5. Sievert, Maximiliane & Steinbuks, Jevgenijs, 2020. "Willingness to pay for electricity access in extreme poverty: Evidence from sub-Saharan Africa," World Development, Elsevier, vol. 128(C).
    6. Choumert-Nkolo, Johanna & Combes Motel, Pascale & Le Roux, Leonard, 2019. "Stacking up the ladder: A panel data analysis of Tanzanian household energy choices," World Development, Elsevier, vol. 115(C), pages 222-235.
    7. Tete, Komlan H.S. & Soro, Y.M. & Sidibé, S.S. & Jones, Rory V., 2023. "Assessing energy security within the electricity sector in the West African economic and monetary union: Inter-country performances and trends analysis with policy implications," Energy Policy, Elsevier, vol. 173(C).
    8. Perez Sebastian,Fidel & Steinbuks,Jevgenijs & Feres,Jose Gustavo & Trotter,Ian Michael, 2020. "Electricity Access and Structural Transformation : Evidence from Brazil's Electrification," Policy Research Working Paper Series 9182, The World Bank.
    9. Klug, Thomas W. & Beyene, Abebe D. & Meles, Tensay H. & Toman, Michael A. & Hassen, Sied & Hou, Michael & Klooss, Benjamin & Mekonnen, Alemu & Jeuland, Marc, 2022. "A review of impacts of electricity tariff reform in Africa," Energy Policy, Elsevier, vol. 170(C).
    10. World Bank Group, "undated". "Africa's Pulse, No. 17, April 2018," World Bank Publications - Reports 29667, The World Bank Group.
    11. Khalid Waleed & Faisal Mehmood Mirza, 2023. "Examining fuel choice patterns through household energy transition index: an alternative to traditional energy ladder and stacking models," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 25(7), pages 6449-6501, July.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wbk:wbrwps:8407. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Roula I. Yazigi (email available below). General contact details of provider: https://edirc.repec.org/data/dvewbus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.