Economic Consulting Associates (ECA) andCambridge Economic Policy Associates (CEPA) have beenengaged by Energy Sector Management Assistance Program(ESMAP) and the World Bank to prepare a policy paper forenhanced regional electricity trade involving the EconomicCooperation Council (ECO) countries. The study has reviewedthe opportunities for increased electricity trade within theECO region and exports outside the region, considered thetypes of trade that will be most likely to develop in theshort and evolve over the medium and longer term, and madean assessment of the risks and obstacles to further tradedevelopment. Drawing on international experience of nationaland regional trading arrangements, as well as four casestudies of regional trade, the study has reviewed thefinancing options including risk mitigation products,considered the requirements for good governance ofinternational trade including dispute resolution procedures,and made an initial assessment of the proposedTajikistan-Afghanistan-Pakistan electricity trade project(TAP). Drawing on all aspects of the research, the finalsection of the report presents a roadmap for development ofelectricity trade in ECO.