Prepayment Metering in Bangladesh

Abstract

What can a utility company do to prevent the theft of electricity, a major problem in developing countries? This case examines how the public utility in Chittagong, Bangladesh’s second-largest city, completely eliminated the theft of electricity that had plagued its operation since the early 1990s by installing prepaid meters. The Bangladesh Power Development Board (BPDB) used to lose millions of dollars a year to electricity theft, a practice facilitated by corrupt meter readers and metering technology that made it easy to illegally tap power lines. These losses prevented the company from operating and maintaining the system properly or making new investments. Insufficient power generation to cover demand and low plant efficiency resulted in erratic power supply and blackouts, which reduced the quality of life of the city’s residents both directly and indirectly (by making manufacturing uncompetitive).