# **Contents**

|Abbrev|iations ................................................................................................................................................ 6|
|---|---|
|1<br>Co|ntext .................................................................................................................................................. 7|
|2<br>Ap|proach and Methodology ............................................................................................................... 11|
|2.1|Approach ..................................................................................................................................... 11|
|2.2|Methodology in the present study ............................................................................................. 12|
|2.3|Data sources and coverage ......................................................................................................... 14|
|2.4|Limitations due to approach and data gaps ............................................................................... 19|
|3<br>Ch|aracteristics of Electricity Sectors in Sub-Saharan Africa ............................................................... 23|
|3.1|Access .......................................................................................................................................... 23|
|3.2|Installed capacity and power mix ............................................................................................... 23|
|3.3|Power purchases ......................................................................................................................... 24|
|3.4|Availability factors and reserve margins ..................................................................................... 25|
|3.5|Consumption ............................................................................................................................... 25|
|3.6|Quality of service ........................................................................................................................ 26|
|4<br>Cu|rrent cost of service, tariffs, and revenue ...................................................................................... 28|
|4.1|Current cost of electricity service ............................................................................................... 28|
|4.2|Comparison of costs and cash collected ..................................................................................... 29|
|4.3|Average electricity tariffs ............................................................................................................ 31|
|5<br>Qu|asi-fiscal deficits ............................................................................................................................. 35|
|5.1|Quasi-fiscal deficits under current performance ........................................................................ 35|
|5.2|Distribution of quasi-fiscal deficit between consumer categories ............................................. 37|
|5.3|Quasi-fiscal deficits under benchmark performance .................................................................. 38|
|6<br>Br|eakdown of quasi-fiscal deficits into hidden costs .......................................................................... 42|
|6.1|T&D losses ................................................................................................................................... 43|
|6.2|Bill collection losses .................................................................................................................... 44|
|6.3|Utility staffing .............................................................................................................................. 45|
|6.4|Underpricing ............................................................................................................................... 48|
|6.5|Breakdown of regional quasi-fiscal deficits into hidden costs .................................................... 49|
|6.6|Other hidden costs ...................................................................................................................... 50|
|7<br>Tr|end analysis ..................................................................................................................................... 52|
|7.1|Robustness of results in reference year ..................................................................................... 52|
|7.2|Comparison with AICD ................................................................................................................ 53|
|8<br>Se|nsitivity Analyses ............................................................................................................................. 56|
|8.1|Oil product prices ........................................................................................................................ 56|
|8.2|Hydrology risk ............................................................................................................................. 58|
|8.3|Exchange rate risk ....................................................................................................................... 60|
|8.4|Discount rate ............................................................................................................................... 62|
|9<br>Co|nclusions ......................................................................................................................................... 65|
|Annex|1: Notes on methodology ................................................................................................................ 69|
|A1.1|Methodology used in the AICD ....................................................................................................... 69|
|A1.2|Financial statement data ................................................................................................................ 70|

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