In the Dark: How Much Do Power Sector Distortions Cost South Asia?

Electricity shortages are among the biggest barriers to South Asia’s
\ndevelopment. Some 255 million people—more than a quarter of the world’s off-grid population—live in South Asia, and millions of households and firms that are connected experience frequent and long hours of blackouts. Inefficiencies originating in every link of the electricity supply chain contribute significantly to the power deficit. Three types of distortions lead to most of the inefficiencies: institutional distortions caused by state ownership and weak governance; regulatory distortions resulting from price regulation, subsidies,
\nand cross-subsidies; and social distortions (externalities) causing excessive environmental and health damages from energy use.
\nUsing a common analytical framework and covering all stages of power supply, In the Dark identifies and estimates how policy-induced distortions have affected South…