Conclusion: Who pays for universal electricity access?
It is worth distinguishing what “high” electricity prices mean in different contexts. In the Global North, today’s higher tariffs largely reflect policy and resource choices layered onto historically cheap electricity systems. In Sub-Saharan Africa, high tariffs are largely driven by structural costs, including high distribution losses, low and dispersed customer demand and expensive generation that is often diesel-based. The result is that many Sub-Saharan utilities charge some of the highest tariffs in the world and still cannot recover their costs - even after subsidies, four out of five loss-making utilities in the region still fail to cover their operating and debt-service costs, which is why they continue to need financial support to stay solvent.
This means that making electricity more affordable cannot simply be a matter of lowering tariffs as the underlying costs of supply do not disappear. The question is who covers the difference - consumers through high tariffs, utilities through mounting arrears and deferred investment, or governments and development partners through explicit, sustained support. For project design, this points toward deliberately structuring subsidies and risk-sharing instruments around that gap, rather than assuming lower tariffs alone will resolve either affordability or utility viability. For governments and utilities, the implication is therefore not simply to mandate lower tariffs. Affordable tariffs need to be accompanied by a credible mechanism for covering the resulting revenue gap, alongside efforts to reduce the underlying cost of supply. For major electrification and energy access programmes like Mission 300, this means treating affordability, utility viability and the financing of the gap as interconnected policy and project-design questions: how much of the access agenda can realistically be carried by tariff revenue versus how much needs to be underwritten by public budgets and concessional capital, and on what terms.
This brief does not attempt to answer that question for specific countries or programmes. Rather, it establishes the case for viewing electrification as an investment in development, with public and concessional capital playing a critical role in making affordable access possible in the hardest-to-reach and least commercially viable markets. The potential mechanisms for financing this gap will be explored in the next brief.
