Improving electricity services in Yemen

The public electricity system in Yemen is in a very poor condition. The war has damaged or destroyed generation capacity and transmission and distribution networks across the country.

This report offers the following recommendations:

•  Prioritise rehabilitation of generation, transmission, and distribution infrastructure, based on a ranking of best return (MWs added, customers reached, economic value created/United States Dollar (USD) spent)
• Ensure an incentive for more efficient use of existing fuels by revising Power Purchase Agreements (PPAs)
•  Encourage switching to lower cost fossil fuels e.g. natural gas
•  Invest in zero ‘fuel cost’ renewable energy solutions e.g. solar and wind – both utility-scale and distributed and mini-grid solutions where appropriate.
• Create a regulatory framework that allows commercial supply at the margin e.g. by operating concessions
• Pilot mechanisms to improve billing and collection e.g. through incentives for concessions or local utilities, install prepaid meters, etc
• Reduce the electricity losses e.g. by disconnecting or legalising the consumers who are illegally connected to the distribution networks
• Develop a framework for future tariff reforms and communicate with the public on how such reforms are necessary to achieve improvements in service
• Publish contracts for all energy investments and purchases
• Devote resources to scaling up off-grid electricity provision for community facilities e.g. water pumping for household supply, health clinics and hospitals
• Leverage the existing linkages between MFIs, banks, accredited solar providers and community groups to expand electricity for productive use e.g. for farmers