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OverviewWhat can a utility company do to prevent the theft of electricity, a major problem in many developing countries? � is case examines how the public utility in Chittagong, Bangladesh’s second-largest city, completely eliminated the theft of electricity that had plagued its operation since the early 1990s by installing prepaid meters.

� e Bangladesh Power Development Board (BPDB) used to lose millions of dollars a year to electricity theft, a practice facilitated by corrupt meter readers and metering technology that made it easy to illegally tap power lines. � ese losses prevented the company from operating and maintaining the system properly or making new investments. Insuffi cient power generation to cover demand and low plant effi ciency resulted in erratic power supply and blackouts, which reduced the quality of life of the city’s residents both directly and indirectly (by making manufacturing uncompetitive).

Lessons Learned� Acceptance of the prepayment metering system was achieved and resistance

from meter readers, their trade unions, and electricity consumers overcome through a holistic approach that addressed their concerns.

� � e implementation consultant played a signifi cant role in supporting BPDB, closing capacity gaps and successfully implementing the project.

� Outsourcing operation of the prepayment system to a private company contributed to the effi ciency and success of prepayment metering.

Development Challenge� � e supply of electricity was inadequate and unreliable, hampering economic development and reducing

well-being.

Delivery Challenge� Improving the power sector required political reforms; regulatory, organizational, and technological changes; and

new investments in the power sector.� � e utility lacked the institutional, technological, and human capacities to control and deter theft of electricity.

Key contextual conditions: Only about 60 percent of Bangladesh’s people have access to electricity. High levels of  electricity losses (due to a variety of causes, including maintenance problems and theft) mean that only about 75 percent of the country’s power generation capacity is considered available. Insuffi cient power generation to cover demand and low plant effi ciency resulted in erratic power supply and blackouts. Per capita power consumption of about 320 kWh per year is one of the lowest in the world.

Prepayment Metering in BangladeshHow to Improve Electricity Delivery and Eliminate Theft

PROJECT DATA

PARTNER ORGANIZATION: GIZ

ORGANIZATION TYPE:Government

DELIVERY CHALLENGES: Coordination and engagement; Human resources and organizational capacity; Basic infrastructure

DEVELOPMENT CHALLENGE: Access to energy

SECTOR:Energy and extractives

COUNTRY: Bangladesh

REGION: Asia

PROJECT DURATION:April 2000–November 2007

PROJECT TOTAL COST: €4.1 million

CONTACTS

CASE AUTHOR: Tim-Patrick Meyer

CASE EXPERT: Matthias Schmidt-Rosen

QUICK CASEAugust 2016

INDONESIA

CHINA

KENYA

REPUBLICOF KOREA

ARGENTINA

NIGERIA

DOMINICANREPUBLIC

BOLIVIA

JORDAN

BANGLADESH

WEST BANKAND GAZA

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Key stakeholders: Key stakeholders included the Bangladesh Power Development Board (BPDB), the German Federal Ministry for Economic Cooperation and Development (BMZ), and the KfW Development Bank. � e implementation consultant (Fichtner) and the operator of the prepayment metering system (KCJAL) played signifi cant roles in implementing the project.

© 2016 German Development Cooperation: KfW. All rights reserved. � e fi ndings, interpretations, and conclusions expressed in this work do not necessarily refl ect the views of the German Development Cooperation: KfW. � e German Development Cooperation: KfW does not guarantee the accuracy of the data included in this work.

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