Yemen started this year the termination of power purchase contracts in accordance with its economic and administrative reform agenda, the finance ministry reported.
The ministry said it has ordered to hold any funds which had been previously allocated for private power companies.
In the meantime, the ministry will continue to pay extra fees added to the official prices of power until new power generation alternatives are established, it said, while pointing to measures to generate power with less-cost fuels and reduce power losses.
Moreover, Yemen has recently started measures, have signed contracts and got aid to build renewable power plants.
The statement comes as Yemen continues to suffer from electric power problems including a few outages a day, three hours each. The outages are blamed on repeated attacks on power pylons in Marib and Sanaa governorates, diesel and fund shortages and efficiency of power plants.
Among other problems are power losses mostly due to dual subscription and ineffective mechanisms of fees collection.
Late last year, the government lifted fuel subsidies but kept the electric power subsidies. In 2013, the power subsidies reached $1.2 billion, of which 50% went to power purchase.
According to official reports, around 40% of the country's population have access to power.
The reports said the demand for power grows by 12% a year while the country increases power generation by 6% a year.