Private Participation in the Power Sector in Europe and Central Asia : Lessons from the Last Decade

This study reviews the electricity sector experiences during the 1990s of four countries that are candidates for EU accession (Hungary, Lithuania, Poland and Turkey) and six former states of the Soviet Union (Georgia, Kazakhstan, Kyrgyz Republic, Moldova, Tajikistan, and Ukraine).

Lessons are drawn from these case studies as well as from Russia, Romania, Armenia, and Albania.

The study provides four key lessons, relating to: (a) the overriding need for comprehensive commercialization of the sector before attempting reforms, (b) the need to adjust to tariffs to cove costs of supply and to depoliticize tariff setting procedures, (c) the need to select market structures appropriate for each country, and (d) the need to protect targeted poorer consumers from rising costs.

Good practices are identified. An action agenda is outlined, in light of the declining interest of strategic investors in emerging markets.