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the poor can facilitate the implementation of overall system-wide user charges.
Chile, for example, funds its household water supply system with individual
subsidies. Identifying poor users is a very difficult first step and will require
significant efforts in data collection and assessment. The needs of the poor and
their ability to pay are rarely evaluated but such a step must precede the targeting
of subsidies. This absence of information can result in the wrong people getting
subsidies or in inaccurate estimates of whom the poor are and how much they can
pay.
76. The key to successful delivery of electricity to the poor seems to be unbundling
rather than decentralization. Electricity delivery can be divided into three
components: generation, transmission and distribution. Unbundling creates the
potential for competition in the relevant sectors. Also, unbundling creates scope
for better information dissemination about the cost structure of each part in the
chain. Transmission and distribution tend to be monopolies and therefore require
effective state or nation wide regulation. Privatizing distribution is common, but
decentralizing the control over the power generation itself to local communities is
not considered. This is because of the need for economies of scale and scope and
also because it is frequently necessary to cross-subsidize rural and urban
consumption.
Unbundling the national REB (Rural Electricity Board) into
regional electricity boards with some form of benchmarking helps clients break
the monopolistic relationship. Many rural providers are experimenting with off-
grid systems.
In Cambodia, electricity customers have often contributed in
advance to the costs of construction for system expansion (lines and
Convention