Power shortages in development countries : magnitude, impacts, solutions, and the role of the private sector

However, because many of these countries already spend some 25% of their budget on power, it is not feasible for a greater share of that budget to be allocated to meet an increasing energy demand. This report, written in response to a Congressional request, describes this dilemma and outlines A.I.D."s role in developing a solution. In Chapter 1, the power crisis in developing countries is defined and the potential impacts on developing countries are analyzed. In Chapter 2, the role of electricity in economic development is discussed, as is the importance to the United States of electric power development in developing countries. Chapter 3 identifies policy, institutional, and technological approaches to resolving power shortages, while Chapter 4 outlines A.I.D."s commitment to a private-sector strategy for alleviating power supply problems and identifies appropriate incentives for private sector involvement in energy development. Finally, Chapter 5 defines A.I.D."s plan for implementing this strategy, especially through policy dialogue and institution-building initiatives. In response to a specific request from Congress, the report discusses the feasibility of developing an Energy Guaranty Program modeled on A.I.D."s Housing Guaranty Program, suggesting that there are not currently enough private power projects being negotiated to warrant the establishment of a new program.