Output-Based Aid in Bolivia : Balanced Tender Design for Sustainable Energy Access in Difficult Markets

This newsletter looks at how Bolivia is implementing an innovative public-private approach to increase rural electricity access to extremely remote areas via Solar Home Systems (SHS) and how Novel Medium-term Service Contracts (MSCs) balance the Government's wish for sustainable service and maximum control with providers' aim for minimal risk exposure. The newsletter also provides information on the overall success of the MSC approach to bidding out SHS services, and how it can only be judged at a later stage, as installations have only just begun. In conclusion, the successful tender award and the efficiency gains achieved show that this new model merits closer analysis and the current administration has taken the underlying public-private approach as a cornerstone of its new universal access policy for the electricity sector.