Quality performance gaps and minimal electricity losses in East Africa

The electricity sector in East Africa is characterized by high levels of electricity losses while regulatory policies have been implemented in order to reduce these losses. Generally, such policies modify the inputs, (for instance higher transmission capacity), the outputs (for instance improved billing), or the technologies. In this paper, we tackle the electricity loss reduction question under a new angle by estimating minimal electricity losses. These minimal electricity losses are computed non-parametrically maintaining the inputs, the outputs, and the technologies constant. Minimal losses are then compared to actual losses to construct quality performance indicators. Our main result is to show that on average, for given electricity generation processes, electricity losses could be reduced by 8%, representing approximately $60 millions of yearly savings.