This Independent Evaluation Group (IEG)Learning Product addresses the effectiveness of World Bankinterventions during fiscal years (FY) 2000–2015 insupporting client countries for improving the financialperformance and long-term viability of their electricitysectors. Like other IEG learning products, this study is asynthesis of evaluation findings, cross-cutting lessons, andgood practices from existing IEG evaluations, supplementedwith a targeted literature review. This study compiled acomprehensive inventory of World Bank electricity sectorinvestment projects approved during FY2000–2015 that containcomponents and covenants for improving sector financialperformance and viability. IEG conducted a targetedliterature survey to compile the latest analysis onelectricity sector financial viability in developingcountries and compiled the leading electricity utilities’profitability trends between 2003 and 2013 for a sample of40 World Bank client countries. The study uses availabledata to characterize an empirical relationship betweensector financial performance and sector outcomes. Thisstudy’s analysis shows that most investment loans withfinancial components and covenants for the electricitysector show a moderately satisfactory or better performanceregarding their financial performance objectives.Thisstudy book is arranged as follows: second chapter is anoverview of developing country electricity sector financialperformance and financial viability drivers, and itcharacterizes the link between financial viability andsector outcomes; third chapter covers the role of investmentloans in improving sector financial viability and analyzestheir performance; fourth chapter covers the role ofdevelopment policy operations (DPOs) for improving sectorfinancial viability and analyzes their performance; andfifth chapter summarizes the main findings and lessons fromWorld Bank support for sector financial viability andillustrates them with relevant investment loan and DPO examples.
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