Powering Through War: How Learning Lowers Energy Costs in Conflict Areas

Experience from Yemen shows that repeated project implementation can significantly reduce the high costs of delivering energy in conflict zones through learning and improved efficiency. Over time, this “learning by doing” effect can offset much of the conflict premium, making development in fragile regions more feasible and cost-effective.

In war-torn Yemen, where infrastructure has been repeatedly destroyed and basic services remain fragile, an unexpected success story is emerging from the solar energy sector. A recent World Bank study, supported by institutions such as UNOPS, Bloomberg New Energy Finance, the International Renewable Energy Agency, and the Armed Conflict Location and Event Data Project, shows that delivering electricity in conflict zones may not be as costly as once believed. The reason is simple but powerful: experience. Instead of avoiding difficult environments, projects that stay and learn over time are finding ways to reduce costs and improve efficiency.

The High Cost of Uncertainty

Conflict has long been seen as a major barrier to development. Violence disrupts supply chains, raises security expenses, damages infrastructure, and discourages private investment. These challenges create what experts call a "conflict premium," meaning projects cost more simply because they are located in unstable areas. For years, this extra cost was treated as unavoidable. Early solar projects in Yemen seemed to confirm this belief, as contractors struggled with logistics, security risks, and limited local capacity, pushing real costs higher than expected.

Learning by Doing

However, the story changed as more projects were completed. By analyzing nearly 1,000 solar installations across Yemen between 2019 and 2025, researchers found that costs began to fall significantly over time. While some of this decline came from cheaper global solar equipment, a large share resulted from improved project execution. Contractors became more familiar with local conditions, supply routes became more reliable, and coordination improved. Simply put, the more projects were implemented, the better the teams became at delivering them efficiently.

This "learning by doing" effect turned out to be the most important factor in reducing costs. Experienced contractors consistently delivered projects at lower prices than newer ones. Regions that saw more early projects also experienced faster cost reductions later. Each round of projects built knowledge that made the next round smoother and cheaper.

Surprising Gains in High-Risk Areas

One of the most striking findings is that cost improvements were not limited to safer regions. In fact, some of the biggest gains occurred in the most conflict-affected areas. Even where violence remained high or increased, project costs continued to decline. Over time, costs in these areas began to match those in more stable parts of the country.

This challenges the idea that conflict automatically makes projects inefficient. Instead, it suggests that part of the problem is a lack of familiarity. At first, working in a conflict zone is difficult and expensive. But as teams gain experience, they learn how to manage risks, navigate challenges, and operate more effectively. What once seemed unpredictable becomes manageable, and costs begin to stabilize.

Rethinking Development in Fragile States

The findings also question another common belief: that larger projects are always cheaper. In Yemen, bigger project packages did not consistently reduce costs. What mattered more was repetition, not size. Doing similar projects again and again helped teams refine their approach and cut inefficiencies.

For policymakers, this has important implications. Instead of short-term interventions, long-term, multi-phase programs may be more effective. Early projects may be expensive, but they create the knowledge and systems needed to reduce costs in the future. Investing in local capacity, training, and contractor networks can pay off over time.

More Than Just Electricity

Yemen's solar program is doing more than providing power to schools, hospitals, and communities. It is building a foundation of skills and experience that can support future development. The real value of these projects is not just the electricity they generate, but the ability they create to deliver infrastructure more efficiently, even in difficult conditions.

As fragile and conflict-affected regions continue to make up a large share of the global energy access gap, this lesson is crucial. Development does not have to stop in the face of conflict. With persistence and learning, it can adapt and improve. Yemen's experience shows that even in the toughest environments, progress is possible and, over time, it can become more affordable.