Published in Utilities Policy, with an open-access working paper available through MIT CEEPR, this study by Santos J. Díaz-Pastor, Carlos de Abajo, Robert Stoner and Ignacio J. Pérez-Arriaga examines why least-cost electrification plans often remain unimplemented.
The paper links planning for grid extension, mini-grids and stand-alone systems with business models under cost-of-service regulation and financing arrangements combining public, concessional and commercial funds.
It distinguishes between two challenges: a viability gap, where revenues cannot cover the regulated cost of service, and financing needs, where investment must be made before costs can be recovered. Addressing these requires predictable support mechanisms and financing aligned with the timing of expenditure and revenue.
Illustrated through Rwanda and Uganda, the framework helps regulators and policymakers connect electrification targets with financially viable programmes and sustainable service delivery.
