Doing Business reforms
Making access to electricity more efficient and reliable
World Bank Enterprise Survey data show that business owners in developing economies consider access to reliable electrical services to be the fourth 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 2020 recorded reforms in 35 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 2018/19. Regulatory changes that reduce the number of required interactions to obtain an electricity connection are an effective way to improve the connection process. Another initiative adopted by several economies is enforcing time limits for utility services, to reduce delays in the time to obtain a new connection. For instance, Poland implemented a new customer service platform that allows the utility to better track applications for new connections. Pakistan also reduced the time to provide new connections by enforcing service delivery time frames and by launching online portals for new applications in Karachi and Lahore.
In addition, 17 economies implemented reforms in 2018/19 that improved the reliability of power supply or the level of transparency of tariffs. For instance, economies in different regions, such as Costa Rica, Kenya, Malta, Rwanda and Serbia, improved the reliability of power supply by modernizing the infrastructure and investing in grid maintenance. On the other hand, Egypt, Arab Rep. and China both increased the transparency of tariffs by starting to communicate tariff changes to the public at least one month in advance.
Reforms implemented in 2018/19 are available here.