With a higher interest rate, a larger capital expenditure implies greater upfront financing costs, while the effect of fuel savings throughout a plant’s life cycle tapers off quickly because of discounting. This highlights the critical importance of sensitivity analysis in the interpretation of the LCOE. While its exclusive focus on private costs is in line with private investment decisions, it neglects key policy issues, including (unpriced) environmental externalities, system-wide considerations (notably the time profile of generation) and energy security. Energy-security concerns underline the importance of attention to resource endowments and geographical factors as well as the relative climate resilience of different energy sources (highlighted by the slump in hydro-based electricity generation following the 2016 drought in Southern Africa). Such considerations are essentially ignored in LCOE metrics (IEA, 2016c). Anticipating growing complexity as systems develop, and enhancing system flexibility from the planning and design phases for newly built electricity infrastructure, could offer significant leapfrogging opportunities to LDCs, by reducing the need to retrofit existing infrastructure (Welsch et al.,