After nearly a decade of donor efforts, it is fair to say Afghanistan's electricity sector remains a mess. This fact was highlighted in a New York Times op-ed last week by Glenn Zorpette, the editor of an electrical engineering journal, who chronicled a three-year U.S. Agency for International Development (USAID) struggle to build a diesel power plant outside Kabul. Zorpette notes that the plant, finally completed, often sits idle because the cost of trucking fuel into the country makes the electricity six times the price of power imported from neighboring states. Surveys of businesses suggest that electricity customers in Afghanistan see 20 outages a month on average and that seven out of 10 firms own a generator because networked power is unreliable or just unavailable.
But USAID should look on the sort-of-bright side: For once, this is a problem that has little to do with the particular curses of Afghanistan or the failings of its occupiers. The electricity sector is a multibillion-dollar muddle across much of the developing world, where utilities with limited reach, poor service, and a tendency to hemorrhage money are the norm. The answer in Afghanistan, as well as in these other dimly lit places, is to move away from the current model of provision -- that of a centralized government-run monopoly -- toward competitive services by small-scale providers. And with the help of technology, the latter option is becoming a widespread reality. Think of it as the "microgrid" model.
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Perhaps 20 percent of rural low-income populations in developing countries have access to electricity, and rates are even worse in rural and urban Africa. Even for those near a power line, often the only way to get service is to pay off utility workers. For the average firm in Eastern Europe and Central Asia, about 10 percent of the money set aside for paying various bribes goes to keeping the lights on and the water running. And for those lucky enough to have a supply, the quality of networked power is grim. Looking at developing countries as a whole, business surveys suggest that 40 percent of firms see electricity supply as a major constraint to doing business, each firm suffers an average of nine power outages a month, and nearly a third of firms own a generator to provide backup power -- or even as their main source of electricity.
Behind these statistics lies a political calculus. The lucky few who are already connected to power grids -- as you might guess, they tend to be the rich elite -- would rather not pay very much for their power. And under the status quo they don't have to: Prices are often set very low to favor current customers, if they pay at all. In Bangladesh, only about 55 percent of generated power is paid for. Of the missing 45 percent, perhaps 15 to 18 percent is accounted for by what the industry calls "true technical" losses; the rest goes to illegal connections or underbilling accounts. A 1994 survey suggests that electricity revenues in developing countries average only about 60 percent of costs. Starved of financing, state electric utilities can't roll out decent service to the bulk of the country. About a third of utilities in Africa and South Asia can't even keep up with their own basic operations and maintenance.
That means that 80 percent of Africans, for example, are left relying on more expensive, less efficient, and unhealthier alternatives. Poor people overwhelmingly use wood or dung for cooking and candles or kerosene for lighting. They waste time collecting fuel and money buying kerosene, suffer respiratory conditions and burns, produce far more greenhouse gas emissions per unit of heat or light than more efficient technologies, and get dim lighting and unreliable cooking heat -- all at a far, far higher price per unit of energy than the most expensive electricity.
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