Saudi-backed government to privatize power sector under IMF deal
ADEN, June 03 (YPA) – Informed sources in Aden revealed that the Saudi-backed government headed by Foreign Minister Shaya Al-Zindani is preparing in the coming days to implement a new economic in southern and eastern Yemen.
According to the sources, the government, within the framework of its understandings with the International Monetary Fund (IMF), has agreed to implement measures aimed at privatizing the electricity sector through the gradual withdrawal of subsidies on electricity services, eventually leading to the complete removal of government support.
The sources added that the government may begin implementing the agreement within the coming days of June.
They further indicated that the Saudi-backed government could obtain a $1 billion loan from the International Monetary Fund (IMF), on the condition that the agreement is fully implemented.
The sources warned that moving forward with the agreement would create a serious economic crisis for citizens, stressing that electricity is one of the country’s most vital public service sectors. They said that the government’s relinquishment of its responsibilities in this sector would further expand poverty among the population.
The sources also emphasized that the electricity crisis in southern and eastern Yemen is largely the result of corruption and poor management in areas currently under Saudi-backed control.
They noted that the government has failed to take meaningful measures to address the electricity crisis before moving to abandon this critical sector in favor of private traders. Given the state of instability and disorder prevailing in southern and eastern Yemen, the sources said, it remains difficult to guarantee that local authorities would be able to protect citizens from exploitation and excessive profiteering by traders once they gain control over the electricity sector.
According to official statements issued by officials in the Saudi-backed government, the electricity sector represents one of the largest hubs of corruption in southern and eastern Yemen.
Former Prime Minister Ahmed Awad bin Mubarak stated in televised remarks in May 2024 that the electricity sector consumes 31% of state revenues, noting that the government spent substantial sums in the previous year.
He added that the state allocates around two million dollars daily to power stations in Aden alone. Observers argue that such amounts would have been sufficient to establish strategic power plants capable of resolving the electricity crisis.
The issue is not limited to claims of government spending on the electricity sector. Saudi Arabia and the United Arab Emirates frequently announce support for electricity services in southern and eastern Yemen; however, this assistance has not translated into any tangible improvement in the collapsing power supply.
The reported support has failed to ease ongoing public anger caused by prolonged electricity shortages, particularly in areas where temperatures exceed 40°C during the summer.
This has raised questions about whether such support is genuinely delivered or merely rhetoric, given the wide gap between official statements by authorities and donors and the deteriorating reality of electricity services in southern and eastern Yemen.
Amid the large figures cited for government spending and the announced external aid packages, citizens in southern and eastern Yemen remain the weakest link, bearing the burden of conflict and corruption in their daily livelihoods and worsening living conditions.
Advancing the privatization of the electricity sector and lifting subsidies under such complex circumstances would not represent a solution to the economic crisis. Instead, it could act as an additional trigger for widening poverty and intensifying public anger in a society already strained by deteriorating basic services.
@E.Y.M