Private Sector Participation in Electricity Transmission and Distribution

In recent decades, many countries have embarked on structural reform programs involving private sector participation (PSP) across the entire value chain of the power sector. Often as part of a broader market oriented reform program, governments have resorted to PSP in transmission and distribution (T and D) for a variety of reasons, including to: (i) offset years of underinvestment and poor operating performance under public ownership; (ii) attract considerable private investment to fill the financing gap stemming from new T and D additions amid rapidly growing demand for electricity; and (iii) raise fiscal revenues by offloading state assets. In some cases (for example, Brazil and Peru), a prolonged electricity supply crisis prompted government into structural reforms of the T and D sector. The energy sector management assistance program (ESMAP) study covers PSP in transmission, as well as distribution. The four case-study countries, Brazil, Peru, Philippines, and Turkey were selected based on the substantial transmission story under their broader electricity PSP experience.