Two businesses can lose electricity for the same three hours and face very different costs. A clothing shop may continue serving customers in daylight. A workshop may stop every machine. A food seller may lose refrigerated stock, while an online service provider may miss a deadline. Counting the hours without power reveals part of the problem. Understanding the economic damage requires looking at what happens during those hours and afterward.
For Afghanistan, this distinction matters because energy investment competes with many other urgent needs. Authorities, businesses, and development partners need evidence to decide whether limited funds should repair a local network, strengthen transmission, support solar systems, or provide backup power for essential activities. A clear picture of business losses can help make those decisions more useful and fair.
The World Bank’s May 2026 Afghanistan Development Update identifies unreliable electricity among the barriers that continue to limit business growth and job creation. However, identifying electricity as a problem does not establish a single national cost. Reliable estimates require careful measurement across different businesses, places, and seasons.
What Exactly Is Being Lost?
The most visible cost of a power cut is work that stops. Yet stopped work does not always become a permanent loss. A carpenter might complete an interrupted order the next morning. If the customer accepts the delay, the main costs could be extra working time and disruption. If the customer cancels, the loss becomes larger.
Researchers should therefore separate delayed production from production that is never recovered. Otherwise, they may overstate damage by treating every interrupted hour as an hour of lost sales.
Sales and profit must also be distinguished. Suppose a hypothetical business misses sales worth 10,000 afghanis during an outage. It would be misleading to call the entire amount lost profit. Producing those goods would have required materials and other costs. If some expenses were avoided, the economic loss would be smaller than the missing revenue.
Other losses occur even when production later resumes. Materials may spoil, equipment may require restarting, or workers may need overtime. A business may pay penalties for late delivery or hire transport again after missing a collection. These expenses should be recorded separately.
Backup electricity introduces another category. A generator may prevent a complete shutdown, but fuel, maintenance, and equipment still cost money. A firm reporting few missed sales may be spending heavily to avoid them. Measuring only lost output would overlook that burden.
World Bank research on unreliable infrastructure examines these different channels, including direct disruption and the costs businesses bear to cope. This provides a useful foundation for an Afghan study, while local evidence would still be needed to estimate local losses.
Begin with a Business Diary
A practical study could ask participating businesses to keep a short outage diary. Each entry would record when electricity failed, when it returned, which activities stopped, and whether backup power was used. The diary could also note damaged goods, additional expenses, and work completed later.
The questions should be simple enough for owners to answer during a busy day. A small workshop may use a paper sheet, while a larger company may provide existing production records. Researchers should avoid requiring a complicated digital system that excludes businesses with limited equipment or staff time.
A diary has an advantage over asking an owner to remember several months of interruptions. Recent events are easier to describe accurately. Even so, the information should be checked where possible against electricity records, receipts, delivery schedules, and other business documents.
Short interviews could explain what the numbers miss. An owner might reveal that work stops during certain hours because restarting a machine is expensive. Another might explain that customers avoid making orders when completion dates are uncertain. Such conversations would help researchers understand how unreliable power changes decisions.
Businesses should know why information is being collected and how it will be protected. Owners may hesitate to share sales figures if they fear the information will be used against them. Confidential handling and publication of combined results would support more honest participation.
A Fair Sample Matters More Than a Large Headline
A survey limited to major companies would provide an incomplete picture. Large firms may have backup equipment, technical staff, and stronger access to finance. Small businesses may have fewer ways to respond, while home-based enterprises can remain nearly invisible in official records.
An Afghan study should include businesses of different sizes and activities. Food production, retail, repair services, manufacturing, and digital work would each reveal different effects. Urban and rural locations should also be represented.
The World Bank’s Enterprise Surveys collect firm-level information about business conditions, including infrastructure. Their approach offers a reference for structured questioning. However, researchers must examine the coverage of any dataset before describing it as representative of every Afghan business.
Informal businesses deserve particular attention. A small sewing operation or repair service can support a household even if it does not appear in a formal business register. Researchers could use carefully designed local sampling to include such activities, while clearly explaining the limits of the resulting estimates.
Seasonal coverage matters too. A brief study during one period may miss changes in demand or supply. Recording several periods would give a more useful picture than multiplying one unusually difficult week across an entire year.
Separating Electricity Problems from Other Pressures
Businesses facing frequent outages may also face poor roads, weak demand, or difficulty obtaining supplies. If their sales are low, electricity cannot automatically be blamed for the full difference.
This is where econometrics can help. Econometrics uses statistical methods to examine economic relationships. Researchers could compare changes in business performance while accounting for other measured factors, such as business size, industry, location, and seasonal demand.
Following the same firms over time would strengthen the analysis. If a business experiences improved electricity and later increases production, that change is relevant. Researchers would still need to ask whether other conditions changed at the same time.
A stronger evaluation might compare an area receiving a network improvement with a reasonably similar area that has not yet received it. Both areas would be measured before and after the project. The comparison would be more convincing if their earlier trends were similar and no separate major event affected only one area.
Statistical methods do not remove uncertainty. Researchers should report assumptions, data gaps, and a reasonable range of estimates. A cautious estimate with clear limits would be more useful for investment planning than a dramatic national figure built on weak evidence.
Turning Loss Estimates into Investment Choices
Once losses are measured, planners can compare possible responses. The first task is to identify the cause of interruptions. A local transformer problem requires a different solution from a shortage affecting a wider network.
Repairing an existing connection may sometimes provide better value than building new generation. In another location, the expense of extending the network may make a local energy system worth examining. Decisions should follow technical assessment alongside the business evidence.
The World Bank’s work on electrification planning in Afghanistan examines approaches that compare options geographically. This supports the idea that different places may require different energy solutions. A single technology should not be assumed suitable everywhere.
Every proposal should include operating costs. A solar-and-battery system needs maintenance and eventual component replacement. A network improvement needs inspection and repair. A generator depends on fuel and servicing. Comparing purchase prices alone would give an incomplete picture.
Planners should estimate how much each option is likely to reduce the losses actually observed. An investment that supplies power only during limited hours may not solve a business’s main difficulty. Equipment capacity, timing, reliability, and affordability must match the work being supported.
Public investment should also consider benefits beyond business profit. Reliable power for a clinic, water system, or school may have substantial value even when it produces little commercial revenue. Areas with fewer businesses should not automatically be excluded because their recorded sales losses are lower.
Checking Results After the Money Is Spent
An energy project should be judged after implementation as carefully as before approval. Evaluators could return to participating businesses and repeat the outage diary, cost questions, and production checks.
Useful outcomes would include fewer interruptions, lower backup expenses, less spoilage, and more dependable delivery times. Employment and investment decisions could also be followed over a longer period.
Costs to customers should remain visible. Better reliability may bring little relief to a small enterprise if the service becomes unaffordable. Evaluation should therefore examine the electricity bill alongside improvements in supply.
Results should inform later projects. If repairs perform well, planners can identify where similar work may help. If an investment disappoints, the reasons should be investigated and published. Maintenance failures, incorrect demand estimates, and unsuitable equipment each require a different response.
Conclusion
Power cuts cost Afghan businesses through interrupted work, damaged goods, extra expenses, and the price of backup electricity. These costs differ across firms, and careful measurement must distinguish delayed activity from permanent loss.
A useful study would combine simple business diaries, a broad sample, technical records, and statistical analysis. Investment decisions could then compare the full cost of each option with the losses it is likely to prevent. Follow-up would show whether the expected benefits reached businesses and communities. This approach would give Afghanistan a clearer basis for directing scarce energy funds toward dependable, affordable service.
Author’s Name: Salim Yar Andaribi
References
World Bank. (2026, May 26). Afghanistan’s economy shows resilience, but living standards are falling.
https://www.worldbank.org/en/news/press-release/2026/05/26/afghanistan-s-economy-shows-resilience-but-living-standards-are-falling
World Bank. (n.d.). Enterprise Surveys: Data.
https://www.enterprisesurveys.org/en/data
World Bank. (2019). Underutilized potential: The business costs of unreliable infrastructure in developing countries.
https://documents.worldbank.org/curated/en/336371560797230631/pdf/Underutilized-Potential-The-Business-Costs-of-Unreliable-Infrastructure-in-Developing-Countries.pdf
World Bank. (n.d.). Supporting electrification policy in fragile states: A conflict-adjusted geospatial least cost approach for Afghanistan.
https://documents.worldbank.org/en/publication/documents-reports/documentdetail/233391583898995644