**Table 15: QFD impact at various reductions in availability of hydropower plants, when replaced with emergency power at a cost of US$0.20 per kWh purchased**

|Redution in availability of|Increas|e in Q|FD (% o|f GDP)||Base case QFD|Increase|in QFD (|% of bas|e-case Q|FD)|
|---|---|---|---|---|---|---|---|---|---|---|---|
|hydropower plants|10%|20%|30%|40%|50%|(% of GDP)|10%|20%|30%|40%|50%|
|Zambia|1.1%|2.1%|3.2%|4.2%|5.3%|1.2%|87%|173%|260%|346%|433%|
|Zimbabwe|0.9%|1.7%|2.6%|3.5%|4.3%|5.2%|17%|34%|50%|67%|84%|
|Malawi|0.8%|1.7%|2.5%|3.4%|4.2%|2.5%|34%|69%|103%|137%|171%|
|Mozambique|0.5%|1.1%|1.6%|2.2%|2.7%|0.9%|59%|118%|177%|236%|295%|
|Lesotho|0.4%|0.8%|1.2%|1.6%|2.0%|0.5%|81%|162%|244%|325%|406%|
|Ghana|0.4%|0.7%|1.1%|1.5%|1.8%|0.5%|80%|160%|240%|321%|401%|
|Ethiopia|0.3%|0.7%|1.0%|1.3%|1.7%|1.7%|20%|39%|59%|79%|98%|
|Sudan|0.2%|0.5%|0.7%|1.0%|1.2%|1.4%|17%|34%|52%|69%|86%|
|Cameroon|0.2%|0.4%|0.7%|0.9%|1.1%|0.7%|33%|67%|100%|133%|166%|
|Uganda|0.2%|0.4%|0.7%|0.9%|1.1%|-0.1%|-297%|-594%|-891%|-1188%|-1486%|
|Madagascar|0.2%|0.3%|0.5%|0.7%|0.9%|2.2%|8%|15%|23%|31%|39%|
|Central African Republic|0.2%|0.3%|0.5%|0.6%|0.8%|0.4%|40%|81%|121%|161%|202%|
|Guinea|0.2%|0.3%|0.5%|0.6%|0.8%|2.1%|7%|15%|22%|30%|37%|
|Congo, Rep.|0.1%|0.3%|0.4%|0.6%|0.7%|0.6%|26%|52%|78%|104%|130%|
|Tanzania|0.1%|0.2%|0.3%|0.5%|0.6%|0.3%|41%|82%|122%|163%|204%|
|Swaziland|0.1%|0.2%|0.3%|0.4%|0.6%|1.2%|9%|18%|27%|36%|44%|
|Côte d'Ivoire|0.1%|0.2%|0.3%|0.4%|0.5%|1.9%|6%|11%|17%|23%|29%|
|Kenya|0.1%|0.2%|0.3%|0.4%|0.5%|0.8%|14%|27%|41%|55%|68%|
|Gabon|0.1%|0.2%|0.3%|0.3%|0.4%|0.4%|24%|48%|72%|96%|121%|
|Burundi|0.1%|0.2%|0.2%|0.3%|0.4%|1.0%|8%|17%|25%|33%|42%|
|Sierra Leone|0.1%|0.1%|0.2%|0.3%|0.3%|0.9%|8%|16%|23%|31%|39%|
|São Tomé and Príncipe|0.0%|0.1%|0.1%|0.2%|0.2%|6.1%|1%|2%|2%|3%|4%|
|Rwanda|0.0%|0.1%|0.1%|0.2%|0.2%|1.0%|4%|8%|12%|16%|20%|
|Mali|0.0%|0.1%|0.1%|0.1%|0.1%|1.3%|2%|4%|7%|9%|11%|
|Nigeria|0.0%|0.0%|0.1%|0.1%|0.1%|0.5%|5%|9%|14%|18%|23%|
|South Africa|0.0%|0.0%|0.1%|0.1%|0.1%|3.4%|1%|1%|2%|3%|3%|
|Mauritius|0.0%|0.0%|0.0%|0.1%|0.1%|0.4%|4%|7%|11%|15%|19%|
|Burkina Faso|0.0%|0.0%|0.0%|0.1%|0.1%|1.0%|1%|3%|4%|6%|7%|
|Togo|0.0%|0.0%|0.0%|0.0%|0.0%|1.6%|0%|0%|0%|0%|1%|
|**_Median_**|**_0.1%_**|**_0.2%_**|**_0.3%_**|**_0.5%_**|**_0.6%_**||**_8.9%_**|**_17.8%_**|**_26.6%_**|**_35.5%_**|**_44.4%_**|

_Source_ : World Bank staff calculations.

# 8.3 Exchange rate risk

Exchange rates directly affect costs in foreign denominated currency such as debt payments and spare parts. They also affect fuel purchases where fuel prices follow world prices. In the period 2010 to 2015, nearly all countries in the sample depreciated against the U.S. dollar, with the exception of Liberia and Zimbabwe, which use the U.S. dollar as currency (for official transaction in the case of Zimbabwe). The median depreciation was 19 percent, while three countries depreciated more than 100 percent: Sudan (155 percent), Ghana (164 percent), and Malawi (200 percent). Some countries have kept their exchange rates artificially high, such as Nigeria, which is evident in the divergence between the official and parallel-market exchange rates. Currency deregulation could see sharp depreciation.

This sensitivity analysis simulates the impact of depreciation on QFD in increments of 5 percentage points from 10-percent up to a 30-percent devaluation against the dollar. This simplified analysis considers the effects on QFD of depreciation on fuel payments and capex. Fuel estimates follow the same assumptions outlined in section 8.1, with depreciation affecting only the spot prices of diesel and HFO (which are assumed to follow spot prices on the world market), but not the costs of shipping and 61