Study on Expanding SMEs Outsourcing Opportunities from Power Sector Reform - A Survey of Eastern and Southern Africa

Over the last 10 years, the electricity sector in eastern and southern African countries has been undergoing reforms targeted at restructuring the sector to improve performance (increase access to electricity, reduce technical and financial losses, etc.) and attract private sector investment. The changes have mainly been two-pronged, namely structural and ownership changes. The structural changes have concentrated on the functional unbundling of the utilities, while the ownership changes were mainly designed to increase private sector investment and involvement. One of the options of involving the local private sector - the focus of this study - would be to outsource some of the power utility activities / services to small and medium scale enterprises (SMEs). Greater involvement of SMEs would also strengthen local support for power sector reforms.

AFREPREN/FWD conducted surveys in five countries in east and southern Africa to ascertain the nature and scope of outsourcing opportunities that SMEs can pursue within the reforming electricity industry. The study is focussing on the following 6 key activities:

1. Retail meter reading, billing and revenue collection for customers in rural and peri-urban areas

2. Supply, installation and management of pre-payment metering services, including vending systems.

3. Operation and maintenance of generation equipment in isolated load centers and/or mini-grids.

4. Design, manufacturing, supply, installation and maintenance of electrical/electronic equipment for delivery of electricity services to industries and/or residential customers. 

5. Expansion of electricity service connections to low-income communities in peri-urban and rural areas.

6. Establishment and management of local area (distribution) networks.

The principal objectives of the survey are to:

Objective 1: Ascertain the extent to which the aforementioned 6 activities that are being assessed in the survey have been outsourced to SMEs as a result of the ongoing reforms of power utility service providers in the eastern (Kenya, Uganda, Tanzania) and southern (Zambia and Zimbabwe) African sub-regions.

Objective 2: Identify 5 to 8 SMEs in each of the five aforementioned countries with the capability to perform the above mentioned services.  Recommend 10 SMEs (two per country) that should be studied in detail.

Objective 3: Prepare detailed case studies of 10 SMEs (two per country) which could benefit from APDF support, in line with the proposed “Capacity Building Product Line for SMEs Utility Service Providers”.  

Expected Outputs:

- 5 Country reports

- 1 regional report

For more information on this study, please contact the AFREPREN/FWD Secretariat at the following address:

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