In 1997, Gabon privatized its electricity and water utility, Société d’Energie et d’Eau du Gabon (SEEG). The transaction was the continent’s first privatization of a water and elec- tricity utility involving full commitment for future investment, and the first full concession in Sub-Saharan Africa under a contract that introduced coverage targets for expanding service to previously unconnected rural areas. IFC was the lead advisor to the government in this transaction.

Pakistan’s first private power project, the Hub Power Project, and its subsequent 1994 private power policy – both supported by the World Bank – were lauded by the international investment community. Pakistan succeeded in attracting over $5 billion in investment and contracting about 4,500 megawatts of private generation in record time. However, macroeconomic instability in the country and financial problems in the power utility revealed some of the shortcomings in the policy and its implementation.

A visitor to gandhinagar, capital of the Indian state of gujarat, is likely to notice the glint of the sun reflecting off solar panels on the city’s rooftops. some of these solar panels sit atop schools, others on hospitals. Many are perched on residential buildings. altogether, the panels generate about 5 megawatts (MW) of electricity, providing better access to power for an estimated 10,000 people.

Afghanistan’s national power utility, Da Afghanistan Breshna Sherkat (DABS), is responsible for providing power generation, transmission, and distribution services across the coun- try. Following its incorporation in 2008, DABS struggled to provide sustainable service, particularly in the south of Afghanistan. To help address this, DABS hired IFC as the lead advisor on a performance-based public-private partnership (PPP) for one of its regional divisions. The PPP agreement was signed in August 2014.

In 1992, the newly elected government inherited a bankrupt economy and embarked on an aggressive economic development program. Power sector reform was an integral part of the agenda. Given it’s inefficiency and financial losses, state-owned Electrolima, Peru’s second largest electricity generator and Lima’s largest distributor, was an obvious candidate for privatization. IFC acted as adviser to the government for the transaction and Electrolima was successfully privatized in two transactions in 1994 and 1995.

IFC advised the government of Panama on the privatization of its electricity genera- tion and distribution companies created from the restructuring of its vertically-inte- grated utility, IRHE. The privatization resulted in an immediate private capital inflow of $600 million and 10 percent reduction in retail tariffs, as well as more than $1 billion in private investment in the privatized companies. The transaction was com- pleted in 1999.

Many prospective international gas pipeline projects are under consideration-projects in Central and South Asia, and projects proposing pipelines from Russia to China and from Turkey to Eastern Europe. Given the large investments required, the main challenge is to design financing schemes that work. There are few blueprints to draw on. The World Bank can play a key transitional role in such projects. But there needs to be demonstrable commitment to opening the natural gas industry to competition and private investment and estab- lishing sound regulatory and pricing policies.

Montenegro has a number of good opportunities for the development of domestic resources for electricity generation. In the Government’s Energy Strategy and Action Plan, it has set out a programme for development that encompasses a range of projects from large-scale hydro and thermal projects to smaller scale renewable energy projects. This programme calls for significant participation by the private sector in generation investment over the coming decade and beyond.

The government of Kosovo faced serious problems in its power sector. The lack of a reliable supply of electricity was causing hardship to its population and was a major stumbling block to investment and economic growth. The state-owned distribution company, Kosovo Electricity Distribution and Supply (KEDS), was losing over €20 mil- lion annually through technical losses and low collection rates. It was then that the government of Kosovo turned to IFC to privatize KEDS, which would allow a private investor to modernize its system.

The World Bank, Final Report, 1st of September, 2017

Image by Pixabay