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Sana'a Center Editorial Blackouts and Blackholes: Yemen’s Vanishing Electricity Supply

One of the most visceral signs of state collapse in Yemen isn’t frontline fighting or food insecurity – it’s the inability of the internationally recognized government to provide electricity. For several years now, the approach of summer has meant bracing for extended blackouts in many parts of the country. With the intense heat and humidity, life becomes almost unbearable for millions of people, and puts the sick and elderly at risk of death. Even as of late October, residents of Aden were getting only two hours of electricity a day due to a shortage of fuel for power plants.

By contrast, although Yemenis living in Houthi-run territories are subject to many deprivations, a lack of electricity is not one of them. In northern Yemen the system is mostly privatized, so while electricity is expensive for most of the population, at 234 Yemeni rials (YR) per kilowatt hour, it is at least available in most urban areas. In rural localities, persistent problems have led many to turn to solar energy, but high up-front and maintenance costs remain barriers, with low-quality batteries with short lifespans the norm. Houthi authorities also benefit from a more moderate climate in the mountainous territories they control, with lower demand during the summer compared to other areas of the country.

In Aden, massive government subsidies have kept the price down to only YR12 per kilowatt hour for households, which account for 62 percent of power usage – but have also facilitated high levels of corruption. The subsidies cost on the order of US$75 million to US$100 million a month, the largest government expenditure by far, double the public sector salary bill. The government uses this money – which usually comes from Saudi Arabia – to buy diesel, which is then given away for free to traders, who produce electricity from private generators and sell it back to the government for cut-price distribution. Despite the low prices, in some government-controlled areas only 20 percent of bills are paid, as people steal electricity from the aging grid.

This byzantine system has been in place since before the war. There has been little progress in reforming it because of the many individuals who benefit, skimming from the US$1 billion or so lavished on the sector each year. Aware of the corruption, Saudi Arabia has recently been less willing to stump up the cash. The government fears provoking dissent if it lifts the subsidies – mass protests against a hike in fuel prices set in motion the train of events that led to the Houthis seizing power in Sana’a in September 2014. But this rationale holds less water given the angry street demonstrations that now take place each summer, fueled by the system’s recent collapse.

One long-serving engineer who has worked in the electricity sector in Taiz and Aden says the problems go back to the era of Ali Abdullah Saleh, and are set to get worse with each passing year. Under Saleh, the state paid US$26 billion to the sector between 1999 to 2009, an approach which has been continued by the government. Since the war started in 2015, the government in Aden has spent up to US$6 billion on fuel and maintenance. Despite the investment, the infrastructure remains inefficient.

The problems are no secret. A parliamentary report presented to the government of Prime Minister Maeen Abdelmalek Saeed in August described the electricity sector as a “black hole swallowing public money as a result of corruption.” It noted that the government incurred losses amounting to US$575 million in 2022 through a botched contractual arrangement with one energy provider alone, while spending a whopping YR569.5 billion (US$2.27 billion) in 2022 just to fund the Ministry of Electricity’s operating budget. The report said the situation had worsened since the government was tasked by the Presidential Leadership Council with improving capacity last year; it is now spending US$3 million a day in an opaque procurement process to provide electricity across government-held areas. “It’s not a crisis of resources, it’s a crisis of managing resources,” the report stated. Independent studies have reached similar conclusions.

The sector needs an overhaul. The government’s Public Electricity Corporation should buy electricity from private producers via a transparent and competitive process. Further, the government should acquire infrastructure rather than relying on unscrupulous middlemen – it would be better off using the resources at its disposal to invest in cheaper and cleaner means of electricity generation such as solar, or at the very least purchasing lower-cost mazut fuel and rehabilitating decrepit power stations. A gradual easing of subsidies could provide the necessary funding for investment in infrastructure, as could better collection of utility bills. More innovative solutions might also be required, such as a decentralized approach whereby each governorate installs its own grid. All of this will require time and money and perhaps, above all, an end to the political and economic chaos of the war. The problem has been left to fester over many years, and having reached the point of crisis, a comprehensive approach is now urgently required. The question is whether the authorities in Aden are up to the task.