Sri Lanka Electricity: Getting What You Pay For!

We believe that micro enterprises are important. If they succeed, they become small businesses and then medium enterprises. That is how development happens.

We wanted to find out how poor micro enterprises were served by mobile companies and by electricity distribution companies. LIRNEasia conducted random-sample surveys in three countries (actually in strong cities and weak cities in Bangladesh, India and Sri Lanka). The sample was 3,180 micro enterprises (defined as employing 0-9 persons) from the lower SEC classifications. In addition, qualitative research was also conducted.

Over 80 percent of Sri Lankan respondents used electricity and mobile phones for business purposes. A large proportion of the Indian respondents did not have fixed places of business, which reduced their reliance on electricity. In Sri Lanka and Bangladesh there was almost total reliance on grid electricity. Around 35 percent of those who used electricity in India, relied on batteries, diesel generators and solar.

Sri Lankan poor micro enterprises pay more than double for electricity than their counterparts in Bangladesh and India. They also pay more for their phone calls, but they seem to make a lot more use of their phones than their counterparts.

Yet, they experienced outages and voltage fluctuations. Yet, they did not complain that much.

In case of a power outage, around 35 percent of Bangladeshi micro enterprises had backup diesel generators available and over 20 percent of the Indian enterprises had invested in inverters. In contrast, most Sri Lankan micro enterprises had not invested in these technologies. A full 41 percent said they had no backup facilities. The next largest category (36 percent) reported they had candles.

What this shows is that while micro enterprises (and others) in Sri Lanka pay a lot more for electricity than their counterparts in Bangladesh and India, they do not have to bear the costs of backup equipment that is essential in the other countries where there is no commitment to 24/7 supply. This is a clear benefit of Sri Lanka’s no-load-shedding policy.

Reliable supply is reported as being essentialby all micro enterprises. Close to 60 percent of Sri Lankan respondents reported that they do not receive advance notice of outages. Of those who do, over 60 percent were informed over TV or radio in Colombo. For the respondents in Wayamba, the public announcements made by the CEB were the main source of information.