This report identifies best practices and specific steps that developing member countries (DMCs) of the Asian Development Bank (ADB) can take to encourage both private sector investment and competition in the power sector. Overall, the objective was to identify best practices that would benefit electricity consumers. In addition to power generation, where there has been by far the most private sector investment and competition to date in developing countries, this report evaluates an area that is only minimally present in the DMCs, namely private sector investment in power transmission and distribution (T&D). The important distinction in emerging competitive markets between distribution (the “wires” business) and retailing (marketing to customers) is also covered. T&D investments by the private sector have tremendous potential for increasing the efficiency of the power sector, creating a financially viable industry and benefiting all consumers.
This report does not identify the minimum practices required to induce investment, nor the package of best practices that may be required to induce private investment in the power sector in a specific country. Private sector investment can, and clearly does, take place without all these practices being in place. However, it is also true that this investment will be more sustainable if these best practices are in place.
Find more related materials at Energy and Power Toolkits.
Tracking Number: DevelopingBestPracticesADB_2000_English