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Energy 2000: Review of the Energy Policy of the Asian Development Bank : Future assistance in the changing context
Electric power
80. In the electric power subsector, the following will also be applicable.
Restructuring: In addition to the operational priorities, ADB, in coordination
with other multilateral and bilateral agencies, will assist its DMCs
in the design and implementation of power subsector restructuring.
ADB will also assist in implementing projects that promote
competition. When DMCs unbundle power utilities and create smaller
successor public entities (e.g., to operate the transmission network or
to provide power supply outside the main grid), ADB will help such
entities improve their technical and financial management. ADB will
also help mitigate the social impacts arising from restructuring, such
as job redundancies. Post-restructuring: After power subsector restructuring, joint and private
sector companies engaged in the generation, distribution, and
supply of power may need support during the initial years. ADB will
assist such companies to ensure that the power subsector remains
strong. Private power generation: ADB will assist its DMCs in creating enabling
environment for private sector participation, preparing private sector
projects that are compatible with the move to competitive electricity
markets, and selecting their developers through ICB. When essential
for such projects to materialize, ADB will provide financing to their
developers through its private sector window. Public power generation: ADB will continue to assist its DMCs when
power generation capacity additions (including hydropower capacity),
which are beyond the private sector capability or interest, are
needed. In the design of such projects, care will be taken to minimize
adverse environmental and social impacts and to maximize economic
efficiency and support for renewable energy development, where feasible. For new hydropower projects, the approach recommended
by the World Commission on Dams will be pursued. Rural electrification: ADB will help its DMCs provide more regions and
new consumers with access to electricity. Projects will be designed
either as stand-alone electrification projects for increasing access, or
where possible integrated rural development projects wherein electricity
supply will complement development and poverty reduction
efforts in other sectors like agriculture, public health, education, rural
development, and forestry. Communities that stand to benefit from
such projects will be consulted. Off-grid supply options using
environment-friendly renewable energy sources and micropower technologies
will be encouraged where they are economical and help rural
development. Small grids: ADB will assist its DMCs with small power grids, which
are unsuitable for competitive electricity markets, to commercialize
their operations, improve governance, and introduce the necessary
reforms for private sector participation; and will support the implementation
of projects in instances when the private sector is incapable
or unwilling to bear the risks at acceptable costs, to expand the
power subsector so that it does not hinder economic growth. Power transmission and distribution: Recognizing that transmission
and distribution are natural monopolies and vital complements of a
competitive generation market, ADB will continue to assist in implementing
transmission and distribution facilities in its DMCs. Demand-side management: ADB will continue to emphasize DSM
through policy reforms and establishment of standards, particularly
when the creation of a competitive market results in decreased funding
and activities for DSM by competing power companies.
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