Doing Business reforms
Making access to electricity more efficient and reliable
World Bank Enterprise Survey data as of 2019 show that business owners in developing economies consider access to reliable electrical services to be the fifth largest obstacle to doing business. However, electricity sector constraints vary. A difficult connection process is associated with utility corruption and may hamper firms, while an unreliable electricity supply is linked to low firm productivity. Both an efficient connection process and safeguards to mitigate outage risks are crucial to business owners. Effective regulation and customer protections can provide predictability for firms, enabling them to better forecast risks.
Many economies aim to improve access to electricity as well as the quality of supply to strengthen the business operating environment for small and medium-size enterprises. Doing Business 2021 recorded reforms in 39 economies making it easier to get electricity.
Streamlining and improving the connection process were common features of reforms making it easier to get electricity in 2019/20. Regulatory changes that reduce the number of required interactions to obtain an electricity connection are an effective way to improve the connection process. For instance, Turkey and Oman made getting electricity easier by enabling the utility company to obtain municipal excavation permits on behalf of customers. Another initiative adopted by several economies is enhancing intra-agency coordination, to reduce delays in the time to obtain a new connection. For instance, Georgia fully implemented a unified electronic platform, which allows the utility to apply and receive stakeholders’ consents online and rendered its use mandatory for all administrative bodies and agencies involved in grid connection processes. Myanmar also made the process of issuing new connections more efficient by coordinating final inspections between agencies.
In addition, 12 economies implemented reforms in 2019/20 that improved the reliability of power supply or the level of transparency of tariffs. For instance, economies in different regions, such as Latvia, Mexico and Qatar improved the reliability of power supply by introducing financial deterrence mechanisms aimed at limiting power outages. Furthermore, Bhutan and Equatorial Guinea increased the reliability of power supply by deploying a supervisory control and data acquisition (SCADA) system to monitor and restore power outages. On the other hand, Angola, Cape Verde, Israel and Qatar, among others, increased the transparency of tariffs by starting to communicate tariff changes to the public at least one month in advance.
Reforms implemented in 2019/20 are available here.
Summaries of reforms by economy, since DB2008: