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Policy Statement on Regional Power Trade in Greater Mekong Subregion
THIS POLICY STATEMENT(the "Policy Statement") is prepared at Phnom Penh on the 28th day of October, 1999.
BETWEEN:
THE MEMBERS of the Greater Mekong Sub-region (GMS) as defined in this Policy Statement (hereinafter referred to as the "Members").
WHEREAS:
(1) DESIRING efficient development of the electric power sector in the GMS and the achievement of economic growth;
(2) RECOGNIZING that since 1992, with the assistance of the Asian Development Bank and other donors, the Members have been promoting close economic ties and economic cooperation, including in the electric power sector, through the GMS program;
(3) RECALLING that the GMS Program is informal and guided only a general set of principles and institutional arrangements;
(4) NOTING that notwithstanding this, the GMS Program has been instrumental in promoting opportunities for extended economic cooperation amongst Members in the field of electric power; facilitating the implementation of priority power projects; and addressing technical, economic, financial and institutional issues relevant to sub-regional power development;
(5) NOTING ALSO that the Fifth Electric Power Forum (EPF) Meeting held in December 1998, the importance of sub-regional cooperation and electric power trade was endorsed; and
(6) NOTING ALSO that it was decided at the Fifth EPF to prepare a policy statement for Member cooperation in sub-regional electric power trade and interconnection for adoption at the next GMS Ministerial Conference,
NOW THEREFORE, in consideration of the mutual benefits to be derived, the Members hereby agree as follows:
Article 1
Objective
1. The Objective of this Policy Statement are:
(a) To promote the efficient development of the electric power sector in the GMS with the objective of aiding economic growth;
(b) To promote opportunities for extended economic cooperation between Members in the field of energy;
(c) To facilitate the implementation of priority electric power projects;
(d) To address technical, economic, financial and institutional issues relevant to GMS electric power development;
(e) To promote electric power trade, where economic, to further these objectives; and
(f) To protect and improve the environment through the adoption of appropriate technologies and plans.
Article 2
Article 2
Definitions and Interpretation
2. Unless the context otherwise requires, the following terms shall have the following meanings whether used in the singular or in the plural:
"Electric Power Forum (EPF)" shall mean the electric power group established pursuant to the GMS Program.
"Experts Group on Power Interconnection and Trade (EGP)" shall mean the group of experts drawn from the Utilities and Member governments and constituted by the EPF.
"GMS Ministerial Meetings" shall mean the ministerial meetings of Members held as part of the GMS Program.
"GMS Program" shall mean the economic cooperation program initiated and supported by the Asian Development Bank for the GMS.
"Greater Mekong Sub-Region (GMS)" shall mean Cambodia, Yunnan Province of the PRC, Lao PDR, Myanmar, Thailand and Viet Nam.
"Independent Power Producer (IPP)" shall mean a private sector entity owning and/or operating an electric power generating facility connected to a Utility's network.
"Members" shall mean the members of the GMS.
"Utility" shall mean an entity owning and/or operating electric power generation, transmission and/or distribution facilities in the GMS.
3. In this Policy Statement (including the recitals and annexes), unless otherwise stated:
(a) The headings and paragraph numbering shall be ignored in construing this Policy Statement;
(b) The singular includes the plurals and vice versa;
(c) References to Clauses and Annexes are, unless the context otherwise requires, references to clauses of, and annexes to, this Policy Statement; and
(d) The word "including" is to be construed as being at all times followed by the words "without limitations", unless the context otherwise requires.
Article 3
Principles
4. The Members shall be guided by the following principles under this Policy Statement:
(a) Each Member recognizes and endorsed international trading in electric power to be an integral part of its policies to strengthen its electricity sector;
(b) Each Member recognizes the importance of technical harmonization of electric power transmission parameters and practices with eventual interconnection in mind;
(c) Each Member recognizes the desirability of foreign direct investment on reasonable terms in its electric power sector in order to speed economic development in the GMS;
(d) Each Member recognizes that, for private sector participation in the electric power sector on reasonable terms, certain "best practice" guiding principles should be recognized as generally indicated in Annex 1 hereto;
(e) Each Member recognizes the importance of open communication and the sharing of information in order to promote the efficient development and supply of electric power; and
(f) Each Member recognizes the need to protect and improve the environment through the adoption of appropriate technologies and plans.
Article 4
General Provisions
5. Each Member's representative at the EPF will act as its national coordinator for all matters to do with this Policy Statement.
6. Members agree to hold regular, informal discussions, not less than annually, on issues relating to electric power development and trade. The scope of such discussions shall include: the compatibility of legislation, policies on transmission grid ownership, access to transmission grids, the environmental impact of power generation and transmission facilities, the development of national or possibly international regulatory bodies, the negotiation of transmission system tariffs, the treatment of taxes and royalties on the efficient operation of the system, technical matters to do with compatibility of electric power systems from the viewpoint of long-term interconnection and such other matters as are relevant to the development of electric power trade.
7. It is agreed that a protocol on regional power trade will be prepared by the EGP for adoption by the EPF and endorsement at a GMS Ministerial Meeting. The protocol will reflect the foreseen trading environment. Without limiting the format or content of the protocol, it is envisaged that subsidiary formal bodies may be constituted as trade develops in order to deal with technical or non-technical matters relating to electric power trade.
Article 5
Effectiveness and Revision
8. This Policy Statement shall come into effect upon its endorsement by a GMS Ministerial Meeting and shall remain in effect until revised or terminated by that body.
9. Any proposed revision to this Policy Statement shall be effective only after adoption by the EPF and endorsement by a GMS Ministerial Meeting.
ADOPTED at he Sixth Electric Power Forum Meeting held in Phnom Penh on the date first above written for presentation to, and endorsement by, the GMS Ministerial Meeting to be held in Manila in December 1999.
______________________________________
ITH PRAING
Secretary of State
Ministry of Industry, Mines and Energy, Cambodia
Chairman of the Sixth Electric Power Forum Meeting
Attachment:
Annex.
Best Practice Features for Private Sector Involvement in Electric Power Sector.
Regions and Countries 
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