Laying the Foundations for Stronger Utilities
The global energy transition and universal access goals present opportunities for improving utility performance. However, only well-managed and well-regulated utilities can provide clean, affordable electricity to a growing customer base while ensuring a reasonable return on investment. Building sustainable power utilities will require concerted efforts from policymakers, regulators, development financiers, and utilities.
Governments can create supportive policies and transparent procurement rules to reduce investor risk and streamline infrastructure development. Regulators must ensure that utilities can recover reasonable costs through tariffs and encourage investment in efficient, resilient networks. Even with sound policies, utilities must improve billing and metering, adopt better business practices, and embrace new technologies to build trust with customers and investors.
The Role of Development Financiers
With public funding scarce, development financiers play a crucial role in offsetting the high costs of the transition. They can provide concessional capital for utilities and risk mitigation instruments for private utility investors, helping to facilitate the necessary investments in the energy sector.
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