Private Participation in Electricity : The Challenge of Achieving Commercial Viability and Improving Services

Tenenbaum, Bernard ; Izaguirre, Ada Karina

World Bank, Washington, DC

关键词: ARBITRATION;    AVERAGE TARIFF LEVELS;    BALANCE;    BANK GUARANTEE;    BUYERS;   

RP-ID  :  40913

学科分类：社会科学、人文和艺术（综合）

来源: World Bank Open Knowledge Repository

【 摘 要 】

This document is about the privateparticipation in electricity. Private activity inelectricity in developing countries has stabilized at amodest level since 2001. Private activity also became moreevenly distributed between International DevelopmentAssociation (IDA) countries and non IDA countries. Privateactivity in electricity remained concentrated in a fewcountries. Investors generally prefer greenfield projectsstructured as enclave projects, protected from many sectorrisks. Electricity is not the only infrastructure sectorwhere this type of private investment predominates. Similararrangements have emerged in water and sanitation, wheregreenfield water and sewage treatment plants sell to asingle customer through government-supported take or payagreements. Distribution is inherently riskier for investorsbecause it involves selling to thousands of customers whopurchase at prices that are highly visible and politicallycontentious. To attract investment in distribution, a newguarantee mechanism has been adopted. In overview, theseprojects usually provide protection from major risks throughlong-term contracts and often come with government paymentguarantees. If there is to be significant and sustainedprivate investment beyond greenfield generation projects, itwill need to be built on a platform of commercially viableelectricity distribution entities. If private participationcan establish such entities, it will create the bestfoundation for future upstream private investment in generation.