Non-Payment in the Electricity Sector in Eastern Europe and the Former Soviet Union

'In Albania, consumers with guns stolen from the government threatened to shoot the utility officials who attempted to disconnect defaulting customers.' This situation and others less dramatic, but every bit as corrupt, aggravated the utility non-payment issue and pushed it into the foreground.

This study reviews the non-payment problem in the electricity sector in Eastern Europe and the former Soviet Union during 1990-1997.

In addition to non-payment, the review also covers the problem of low cash collections and the preference in some countries for the use of cash substitutes such as barters, offsets, and promissory notes.

The objective of the study is to identify which policies and measures addressing the problem of non-payment in the electricity sector worked in practice and which did not.

Therefore, it includes stories of both success and failure.

It is aimed at equipping Bank staff and decision makers with a set of practical tools that can be of use when the political will exists to tackle the problem.