Policy and Regulatory Environment for Private Investment in the Power Sector
Singh, Anoop | June 2006
Abstract
Private investors respond to risk return tradeoffs. The policy environment and regulatory framework significantly influence risk as well as return in the power sector. Power sector reform and policy initiatives for enhanced private participation have been undertaken in a number of developing countries. The economic crisis faced by India in the early 90s led to opening up of the power sector for private investment there. Major policy initiatives were undertaken to encourage private and foreign investment. The investment climate was further strengthened by gradual restructuring of state electricity boards (SEBs) and regulatory reforms. More recently, the Electricity Act 2003 has enabled competition in the sector and improved the policy environment for private investment. Abolition of the single buyer model and phased access to consumers has opened substantial potential for private investment in the sector. The scale of private investment in the Indian power sector is not as encouraging as in the case of some reforming countries in Latin America and Asia. This paper undertakes a comparative analysis of the policy and regulatory environment in the power sector in Argentina, Brazil, People’s Republic of China, India, Mexico and Thailand. We find that the scope, pace and sequencing of the reform process has significant influence on private and foreign investment. Policy clarity and independent regulatory institutions reduce risk perception of investors as well as lenders.
Citation
Singh, Anoop. 2006. Policy and Regulatory Environment for Private Investment in the Power Sector. © Asian Development Bank. http://hdl.handle.net/11540/4062. License: CC BY 3.0 IGO.ISSN
1882-6717
Keywords
Asian Development Bank
Development
Rural Development
Public Sector
Public Sector Management
Development Cooperation
Development Goals
Organization For Economic Cooperation & Development
Public Sector Projects
Ports
Education
Ports
Education
Rural planning
Regional development bank
Project finance
Strategic planning
Infrastructure projects
Government programs
Public finance
Public enterprises
Infrastructure
Partnership
Power
Communication in rural development
Rural enterprise zones
Communication in community development
Social participation
Development banks
Community banks
Partnership
Joint venture
Economic development
Public works
Administrative agencies
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http://hdl.handle.net/11540/4062Metadata
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