Improving power utility performance in developing countries

Production capacity of publicly owned power utilities in developing countries has increased rapidly but their average performance declined substantially, in spite of strong efforts to the contrary by the outside financing agencies supporting them. A recently completed study of power plants in 17 countries has concluded that the key elements causing this poor performance are institutional, rather than technical. There is a lack of clear objectives for the utilities, a lack of autonomy of management, gross interference by governments in staffing and day-to-day operational decisions, insufficient tariff levels, poor revenue collection and lack of access to foreign exchange. These issues must be addressed first if lasting improvements in performance are to be brought about.