Bangladesh's member-owned rural power cooperatives kept losses and theft low

Bangladesh's power grid barely reached rural areas in the 1970s; one central utility had no way to police thousands of scattered villages. In 1977 the government created the Rural Electrification Board (REB) with a different structure: electricity would be delivered through Palli Bidyut Samitis (PBS), consumer-owned rural cooperatives.

Each PBS runs a compact service area with locally hired meter readers and bill collectors, while REB provides training, procurement and oversight. Performance Target Agreements signed each year tie employee pay to results — bonuses of up to 15% of basic salary for hitting targets, pay cuts of up to 1% for missing them — and by March 2011 there were 70 PBS covering 48,746 villages.

The model performed: average PBS system loss ran about 16.62% with some cooperatives under 10%, and bill collection averaged 97% of amounts billed in 1999–2000, well above typical developing-country utilities. The World Bank's Rural Electricity Transmission and Distribution Project (2014–2021) then tested the model at scale, cutting losses in its eastern Bangladesh project area from 13% to 10.5% — below target before closing — and the ICR Review rated the outcome Highly Satisfactory.

National access climbed from 25% of the population in 2000 to 74% by 2015, and the World Bank credits REB's cooperatives with delivering electricity to more than 90 million people since 2009.

Member-owned cooperatives police their own losses

Small service areas make every meter and bill traceable, so losses are hard to hide.

Consumer ownership means the people paying bills are the ones policing theft.

Performance Target Agreements turned loss and collection goals into pay.

Centralized training and procurement gave small cooperatives big-utility capability.

When one utility can't police a scattered customer base, let small customer-owned cooperatives run their networks: local ownership plus performance pay keeps losses, theft and arrears visible.

The access agenda is nearly complete — more than 99% of Bangladesh's population has electricity connections — and the World Bank's 2021 Electricity Distribution Modernization Program is digitizing 25 PBS in Dhaka and Mymensingh with $500 million, adding SCADA, advanced metering and 31,000 km of lines so the cooperative network can handle renewables and two-way power flow.