The TA project will review and assess ongoing power sector reform in selected DMCs in Asia and the Pacific, where the power sector development agenda (i) remains high in the development strategy and policy priorities of the national government; (ii) has achieved significant physical, economic, and institutional reform milestones that have demonstrated either successful outcomes or generated relevant experiences and lessons useful for other ADB member countries to learn from; and (iii) has continued to support ongoing reform objectives targeted to achieve improved power sector development. The TA will help enhance the DMC's medium-term power sector development plans and policy advocacy toward achieving successful sector reform that will bring reliable, accessible, and secure power supply to DMCs towards achieving environmentally sustainable and inclusive economic growth and development. The outcome of the TA is expected to contribute to the formulation of effective policies and regulatory leading to improved operational environment for the power sectors.
This assessment will be conducted to deliver three main outputs: (i) comprehensive assessment study on the power sector reform agenda of the participating DMCs, (ii) knowledge sharing and policy dialogues among various stakeholders, and (iii) dissemination workshops.
The TA will be implemented in at least three countries in the DMCs.
|Project Rationale and Linkage to Country/Regional Strategy
Rapid population and economic growth in Asia and the Pacific continue to create high levels of demand for energy and electricity. Given the increasing scale of energy and electricity use, about 800 million people still have no access to basic electricity services in Asia and the Pacific. Now and in the foreseeable future, the increasing trend and pattern of energy use are expected to create far-reaching environmental consequences such as climate change. Achieving energy security, mitigating the impacts of climate change, and improving energy access for all will require a strong and more responsive energy sector to deliver structural as well as policy reforms to boost power sector development toward achieving more inclusive and environmentally sustainable economic growth.
Although countries in Asia and the Pacific have been undertaking power sector reforms during in the last 20 years, results have been mixed in terms of physical, economic, and institutional milestones, particularly in the areas of market structure, private participation, and regulatory framework. Most have generally been tentative and incomplete, and remain works in progress. The reform initiatives have mainly been focused on institutions and processes that influence the relationship between power utilities and the public sector; the limited efficiency of public sector management, accountability, legal framework, and information flows have often resulted to inadequate services and incentives to meet consumer demands efficiently. Although the importance of institutions and their undertakings have emerged amid large investment needs in the power sector, the sector has yet to create an enabling environment in which investors and operators can face reasonable commercial risks, and in which consumers, regulators, and other stakeholders honor the contractual rights of power suppliers to recover their revenues. This has discouraged private sector investment in the power sector.
Since the power sector will continue to play a key role in the region's rapid economic growth, it is highly relevant to revisit and assess the power sector reform developments, determine the relative success and performances of some selected countries in achieving the targeted reform outcomes, and draw lessons for knowledge sharing that can improve reform planning perspectives among other developing countries in the region. Questions that remain to be answered are: (i) how successful the reforms have been and (ii) whether the reforms have contributed to the power sector development in the region. Moreover, it is necessary to address shortcomings in terms of policies and their implementation that need to be overcome going forward.
In the last 40 years, the Asian Development Bank (ADB) has been providing assistance to its developing member countries (DMCs) in the energy sector, particularly on power expansion programs and infrastructure, institutional capacity building, power sector reforms, governance, and efficiency improvements. Promotion of institutional and policy reforms to enhance the operational efficiency and sustainability of energy operations and infrastructure in the DMCs is among the core areas of ADB's Strategy 2020. In support of this framework, ADB's Energy Policy considered energy sector reform, capacity building, and governance as important pillars in helping DMCs provide reliable, adequate, and affordable energy to achieve inclusive growth in a socially, economically, and environmentally sustainable way. In light of this, the technical assistance (TA) aims to review and conduct an assessment of the ongoing power sector reform in Asia and the Pacific. It will evaluate the outcomes of reforms in at least three countries in the region and build on relevant ADB project experiences and research outputs on power sector reforms to provide insight toward more effective policy and an improved regulatory and operational environment for power sector development in the DMCs.