Role of investment in self-generation in mitigating outage loss: evidence from Sub-Saharan African firms

Abstract

The study examines the role of investing in self-generation in mitigating the outage loss and evaluates the outage loss differential among firms that invested in self-generation and those that did not using World Bank Enterprise Survey data collected from firms operating in 13 Sub-Saharan African countries. The results show that though self-generation has reduced the amount of outage loss for firms that have invested in self-generation, these firms continue to face higher unmitigated outage loss compared to firms without such investment. Firms that have invested in self-generation would have incurred 36–99% higher than their current outage loss had they not been engaged in such investment. Likewise, firms that did not invest in self-generation would have reduced their outage loss by 2–24% had they been engaged in self-generation. Thus, the study recommends a differential supply interruption to be followed by public authorities based on firm’s degree of vulnerability to power interruptions.