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AFURConference InfrastructurePrivatization PSR
AFURConference InfrastructurePrivatization PSR
Presentation Outline
Rationale for power sector reforms Options for power sector reforms Key indicators for assessing PSR impact on the poor in Africa PSR impact on indicators of pro-poor outcomes in Africa Role of regulators in promoting pro-poor reform outcomes
PSR typically involves changes in ownership and/or management of the sector, including privatization of assets and establishment of independent regulation. Commercialization of SOEs seeks to run the sector on commercial principles while keeping ownership in public ownership. Privatization involves transfer of existing power sector assets to private ownership and allowing for private development of new power infrastructure.
Private sector participation (PSP) in the management and operation of the power sector include: - service contracts; - management contracts; - lease/affermage contracts; - concession agreements.
Studies carried out by ECA and other institutions to assess impacts of PSR on the poor in Africa revealed that key factors for consideration include: Access to electricity; Affordability of electricity services Quality and reliability of supply; Access to social services infrastructure such as electrified schools and clinics; and Net impacts on public finances
Review of studies on impacts of PSR on the poor in Africa reveals that: Access to electricity not significantly improved; Affordability of electricity services for the poor deteriorating with tariff increase trands; Quality and reliability of service improved with reduced power outages; and Access to social services infrastructure improved as a result of reduced subsidies to SOEs.
To be effective regulatoryrole should include: Setting tariffs that take care of service providers and customers interests; Setting lifeline tariffs and administering; subsidies to service providers and customers; Awarding licenses for management contracts and private electricity distributors; Approving (?) power purchase agreements (PPAs) for IPPs; and Advise governments on investment decisions.
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