The Asian Development Bank and the Privatization of Power Services
Posted on December 12 2003 |
Fabby Tumiwa
Working Group
on Power Sector Restructuring
Indonesia
Introduction
Power sectors in many developing countries are undergoing fundamental changes that are enormous in their scope and depth. Across the world, electricity reform or restructuring has been taking place. The vertically integrated government owned utilities, responsible for generating, transmitting and distributing the electricity to people, are being unbundled into separate entities or subsidiaries of generation, transmission, distribution and retailers. Countries’ needs for investment in the sector to meet growing demand have made private power producer becomes more important to supply electricity and delivering it to communities. Public monopolies are being edged out by market competition. Ironically, even as electricity is widely recognized as an essential service, the sector is being wrenched from public hands as governments are pushed to privatize and transfer ownership to the private sector by various international financial institutions and development agencies.
Widespread problems experienced under public monopolistic ownership often crop up as basis for instituting power sector reform. Proponents cite: (a) poor performance of the state-run electricity sector resulting to higher costs, inadequate expansion of electricity service, and/or unreliable supply; (b) the inability of the state to finance expenditures for new investments and/or maintenance; (c) the need to remove subsidies from the sector to release resources for other pressing public expenditure needs, and; (d) the desire to raise immediate revenue for the government through the sale of assets from the sector (Bacon and Jones, 2002). To address these problems, many developing countries have been pushed by creditors to implement power sector reform or power sector restructuring program.
Economically and politically powerful governments, multilateral developments banks and bilateral institutions obviously support power sector reform. The reforms are not always set nor designed to solve problems in the power sector of developing countries. In some cases, power sector reform takes place in compliance with loan conditionalities set by development aid agencies and multilateral development banks or regional and global trade arrangements.
Cloaking all these with legitimacy is the captivating rhetoric supported by the neo-classical theoretical discourse, which have enthralled the academic, political, administrative, economic, and social mainstreams in these countries. Enormous human resources at the disposal of the multilateral and bilateral institutions allow the spread of this mainstream rhetoric, the supporting theoretical propositions, and the detailed policy prescriptions.
ADB’s Role in the Privatization of Power Services
Asian Development Bank Energy Policy
In the Asia region, the Asian Development Bank (ADB) plays a major role proposing and supporting so-called ‘power sector restructuring programs’, together with the World Bank, IMF and development aid agencies such as USAID and DFID. These institutions argue that developing countries need power sector reform, which they believe is the best mantra with which to attract private investment for building power infrastructures, improving efficiency, and provide access and better service to the consumers and the poor.
ADB’s role in power sector development among developing member countries (DMCs) started in the early 80s, with the first Energy Policy Paper released in March 1981. This policy focused on overcoming the crisis caused by the oil price shocks in the late 70s. By then, the energy requirements of the rapidly growing economies of DMCs needed large investments. The policy paper furthermore emphasized developing energy infrastructure in developing countries, including power infrastructure, creating incentives to bring foreign investment to the country and giving priority to social and environmental impact on new energy projects. The Bank reasoned that large producers are attracted to economies of scale like power sectors; making these attractive enough for them to invest in would ultimately ensure the lowest electricity costs for consumers.
In 1995, ADB released a second Energy Policy Paper, which noted how the power sectors in the developing countries were growing bigger, more unmanageable, and inefficient. It scored the dual role of government as both monopoly owner and policy-maker as reasons for the worsening performance of the energy sector. Government, it added, was contributing to the creation of a distorted market.
ADB pointed out that electricity tariffs lagged behind the cost of supply, which was why internal cash generation could not sufficiently support power sub-sector expansion in the 80s, and had to rely on foreign borrowings and equities. Furthermore, public utilities Because of the increase of the debt-services of utilities, therefore, they should not continue to depend on government budget.
ADB predicted that in next ten years, (public) utilities would have the capacity to meet the increasing demand, therefore the power sub-sector needs new participants and institutions to come into the field, thus, the restructuring of DMCs power sub-sector has become necessary.
The objectives of the reform set by the ADB is to: (i) introduce competition, (ii) allocate a greater role for private sector; (iii) separate the roles of owning and regulating; (iv) provide for fair, objective, stable and transparent regulation; and (v) broaden the financing base.
ADB further stresses directing major portions of its lending and technical assistance to DMCs willing to restructure their power sector to increase efficiency and to mobilize the incremental investment funds from private sector, both domestic and foreign (ADB, 1995). Since then, power sector reforms have begun to take place in many countries, inspired by “success stories” in Australia and New Zealand, OECD nations and some initial changes in several DMCs. The Bank encourages DMCs to undertake restructuring efforts appropriate to the maturity of their stock exchange and capital market, the extent of the autonomy of their public utilities as well as the existing structure of the sector.
The ADB advocates power sector restructuring in the medium-term, involving unbundling the mix of generation, transmission and distribution, introducing elements of market competition and minimizing monopolistic segments of the power sector by the state to enable greater private sector participation.
It envisions that the restructuring of power sub-sectors in DMCs would take place accordingly. The power transmission function and some hydro generating units would remain with the existing utilities, which may be privatized. Most of existing thermal units would be privatized and most of the new thermal units would be in private sector or jointly owned by the private sector and utility. In the smaller DMCs, the distribution function may be handled within transmission system. In the larger DMCs, the distribution function would be separated from generation and transmission and entrusted into one or more distribution companies that are owned privately, by the government, or by local authorities.
For the short term, ADB promoted corporatization and commercialization of government-owned utilities as a prelude to their privatization efforts and the entry of private sector through BOO/BOOT (build-own-operate/build-own-operate-transfer) options. It also advocates in tariff setting through independent and transparent regulation, increasing tariff towards its economic level, removing cross subsidy in tariff structure and focusing sharply on demand side management.
One important issue is the role of private sector in sector reform. The ADB sees private sector as the main engine of structural reform in energy sector in general and power sector in particular, and believes that private sector participation plus market-oriented behavior are crucial to improving performance and efficiency.
To DMCs with very weak institutional bases, ADB suggests introducing private sector participation by contracting out operations and maintenance of power plants and commercial functions such as billing and collection. For DMCs with stronger institutional, operational and financial capabilities, the private sector is encouraged to enter the independent power generation and transmission activities. In DMCs with a mature energy sector, the private sector could be interested in investing on its own, partnering with the public sector, or making equity investments in energy sector entities that have successfully restructured into corporations and listed on the stock exchange (Tellam, 2001).
In November 2000, ADB released the Energy 2000: Review of the Energy Policy of the ADB, a review of the 1995 Energy Policy. The Energy 2000 listed four operational priorities for ADB, namely (i) Poverty reduction by creating energy infrastructure for sustainable energy growth; (ii) Increasing private sector involvement by restructuring energy sector and creating enabling environment for private sector; (iii) Addressing the regional and global environmental impact by use of clean energy, and Kyoto Protocol Mechanism for GHG abatement and financing renewable energy projects and; (iv) Promoting regional cooperation by identify and implement export-oriented hydropower, natural gas-based generation and transmission projects.
As a framework, the review bannered the changing context of ADB, that of poverty reduction which it adopted as its overarching goal at the end of 90s. Energy sector operation, therefore, should take their cue from ADB’s approaches to poverty reduction strategy. ADB points out, for example, that access to modern energy services (such as power service) has a close link to poverty indicators. Access to modern forms of energy makes it possible to get greater gains in productivity, education, agriculture and private investment. Poor populations in DMCs need such access for income generation. The review also stressed the role of ADB’s private sector development agency in strengthening the role of private sector as motor of growth in Asia (ADB, 2000).
The review affirmed the soundness of the policy. It emphasized the following issues: continuous support for private sector participation in the energy sector; allocation of funds to DMCs willing to restructure their energy sub sector (oil, gas, coal and power) for purposes of attracting private investment; support for the build-operate-transfer project types and the Bank’s partnership with utilities and private investor to encourage private investment; use of market prices to increase private sector participation.
ADB also committed itself to assisting DMCs in creating enabling environments for private sector participation, such as preparing private sector projects compatible with the move to make the electricity market more competitive and selecting their developers through international competitive bidding. Financing would be provided developers through ADB’s private sector window.
Asian Development Bank Energy Loans and TA Portfolio
Power sector reform then becomes very important for ADB’s goals. This is apparent from the allocation of ADB’s loan approval and technical assistance for the energy sector from 1995-1999, after the Energy Policy was released, and for fiscal year 2002. During the period 1995-1999, about $834.4 million of total energy sector lending of $4.8 billions went to power sector reform . However, technical assistance for the power sector reform objective remained a priority, with an allotment of $16.9 millions or 22.8 percent of the total $74.1 million.
In 2002, the total energy sector loan stood at $1.017 billion or 18 percent of $5,676 million total lending. From the overall lending in the energy
Issues |
Before Reform |
After Reform |
Power
Industry Structure
|
Vertically integrated generation, transmission and distributions are in one
enterprise, usually owned state-owned enterprise.
|
Creation
of new generation companies, transmission and distribution companies as the
result of unbundling process.
|
Power
Industry Market
|
Regulated and monopolize by state-owned utilities.
|
Deregulated, introducing competition in several stage: regulated utility,
single buyer model, wholesale competition, and retail competition.
|
Electricity Tariff
|
Regulated, government subsidy, lifeline rate.
|
Market-based electricity tariff, discouraged cross subsidy, introduced
targeted subsidy.
|
Private
Sector Participation
|
Independent Power Producers, Power Purchase Agreement (PPA) between IPP and
State-Owned Utility.
|
Private
sectors play bigger role; new IPP encouraged using BOT/BOOT scheme;
privatization in different form: lease contract, management contract, and
full ownership of utilities.
|
Role of
the government
|
Utilities owner, policy and regulation making, regulatory institution.
|
Policy
maker and facilitator only, independent regulatory commission is established
to function as regulator.
|
sector in 2002, about $460 million, or 45 percent was set aside for program or projects related to power sector restructuring in DMCs; 21 percent for transport and fuel projects, 16 percent for renewable energy project, 9 percent for private sector projects and 9 percent for regional development projects (see chart 1).
Source: Computations by the author based on the ADB Annual Report 2002.
Highlights of Electricity Reform and Privatization in Asian Countries
Bangladesh
Since 1994, ADB has funded power sector restructuring program through three loans totaling $340 million, six technical assistance grants and one private sector involvement.
Before the reform took place, Bangladesh Power Development Board (BPDB) existed as the sole utility controlling generation, transmission and distribution of electricity in the country. The initial step towards reform started in 1991 when the government established Dhaka Electricity Supply Authority (DESA). In 1993, upon the recommendation of an inter-ministerial committee, reform was taken further and subsequently led to the establishment of an independent regulatory commission and the unbundling the BPDB. In the mid-90s, ADB and World Bank interventions under the reform program paved the way for the rationalization of power distribution boundaries, and the creation of a power company for the rural areas. As a result, the Bangladesh Power Grid Company was set up in 1996 to take over the transmission business from BPDB. The Dhaka Electricity Supply Company (DESCO) took over the distribution business for Dhaka City from DESA and Rural Power Company (RPC) .
Under the restructuring program, the government will separate existing power generation units through a corporatized entity. Distribution systems under DESA and BPDB will also be transformed into several corporatized units. As for the electricity market, the government will encourage competition on the generation side under a single buyer model. However, in the long term, it could also aim for full competition under a multi-buyer/multi-seller model .
In terms of regulation, ADB and the World Bank have made a joint prescription in the power sector (CPD, 2000). ADB supported the Bangladesh Government in the drafting of the electricity reform bill. In 2002, ADB awarded a $850,000 Technical Assistance grant for project preparation activities related to the corporatization of DESA.
India
The ADB supported power sector reform program in two Indian states, Gujarat and Madhya Pradesh (MP) started in 2000. In the state of MP, ADB supported the power sector reform program of the state government through a $ 200 million loan released at the close of 2001. The objective of the reform is to unbundle the Madhya Pradesh Electricity Board (MPEB) with only one generating company comprised of previously separate generation plants running as a profit center; a transmission company; a dispatch company and several distributions companies.
To achieve financial viability, ADB required MPEB to apply tariff increases. Starting January 1, 2001, the state government and MPEB reduced the supply of free power to agricultural consumers and single light point consumers. Both Gujarat and MP state have introduced corporatization and commercialization principles in their power sectors. The private sector is encouraged to participate in building generation and distribution infrastructure.
In 2002, ADB awarded the Indian Government with $150 millions for its implementation of the state power sector reform program. Reaching total costs of $392.7 million, the program sourced additional funds from ECAs, governments, and other credit institutions.
The Philippines
By 2002, ADB lending in the power sector already reached $2,297.6 billion or 28.59 percent of total lending (Freedom from Debt Coalition or FDC, 2003a). For power restructuring, ADB funding in 1999 alone amounted to $300 million. World Bank and JBIC provided additional funding of $400 million while USAID provided several more millions in the form of technical assistance grants .
To support this power restructuring, these financial institutions urged the Philippine government to draft an enabling law – the Electric Power Industry Restructuring Act (EPIRA) – which was passed in 2001. Before its passage, ADB and other funding agencies did not idly stand but actively exerted efforts to recommend changes in the Power Restructuring Bill (Bohun, 2001). ADB also made sure that the proposed measure would be in accordance with its restructuring plans by attaching this as a condition to loan disbursement.
EPIRA facilitated the privatization of the National Power Company (Napocor) through an unbundling process. Napocor’s power plants have been grouped into several new power companies, which will also be privatized in the near future. For instance, transmission has been relegated to the National Transmission Corporation (Transco).
The distribution sector has not yet been fully unbundled. Under the reform program, the creation of competitive markets in electricity generation is envisioned upon the completion of the privatization process.
Heated controversy surrounded the issue of Napocor’s stranded costs. In 1995, the lease obligation to IPPs only amounted to P 35 billion; by 2002, the amount had increased 20 times. In large part, the huge increase was caused by the government’s contractual obligations with independent power producers, whose revenues it guaranteed, regardless whether the contracted electricity was actually generated or used. Moreover, government continued to forge 25-year contracts with IPPs even as the country was already experiencing an oversupply by the late 90s.
The Power Purchase Adjustment would transfer to buyers of Napocor’s generating assets but government will cover the cost differential. This burden will be passed on to electricity consumers in the form of a universal charge or levy (Seymour, 2002).
As of end-June 2003, Napocor had approximately $7 billion worth of debt to its name. These debts do not include the $250 million-bond partly backed by the Overseas Private Investment Corp.; around $500 million of this amount was to mature in 2003. Napocor obligations as of end 2002 reached more that P1 trillion, of which P700 billion is due the IPPs. All in all, Napocor’s financial obligations represented about 25 percent of the total national debt estimated at P 3.8 trillion. (FDC, 2003b).
Privatizing the transmission asset is a key element in the power privatization program. However, the Power Sector Assets and Liabilities Management Corp. (PSALM) has already failed twice to bid out Napocor’s transmission asset. It recently announced plans to enter into negotiations with lone bidder Singapore Power (SP). According to recent reports, PSALM will defer negotiations with SP until the first quarter of 2004 because of SP’s ongoing corporate restructuring (FDC, 2003b).
In 2002, ADB awarded the Philippine government $40 million of the $106 million Electricity Market and Transmission Development project outlay. ADB further extended its support for the power sector restructuring program by guaranteeing a 61.8 billion Japanese yen Eurobond issued by the project executing agency PSALM. The bond proceeds will help in the initial stages of power sector privatization. This increases the total financial assistance to the vital power sector reform to more than $1 billion (ADB, 2003).
Indonesia
ADB approved a $400 million power sector restructuring program, consisting of a $380 million program loan and $20 million for a Technical Assistance (TA) loan in March 1999. Japan Bank for International Cooperation (JBIC) provided co-financing of $400 millions; Germany KfW contributed $60 millions while USAID gave $5 million in technical assistance to the Indonesian government and the state-owned electric power company, PLN. It is estimated that the Indonesian power sector reform program will cost a total of $1.5 to $ 2 billion until the competitive market is established.
The objective of this restructuring program is to establish a competitive market for electricity in Java-Bali to increase the economic efficiency of the power sector in that region. The Java-Bali area is the most densely populated region in Indonesia and where more than 75 percent of electricity is produced and consumed. According to the government and ADB, the Java-Bali system is mature enough to be transformed into a competitive electricity market.
To attain the first objective, five activities that have to be carried out were identified: (i) restructuring the power sector and creating an environment for a competitive electricity market, (ii) establishing competition in bulk for the electricity supply in Java-Bali, initially with single buyer, then multi-buyers and multi-sellers by 2003, (iii) adjusting tariffs to ensure the financial viability of PT PLN and the newly created subsidiaries during the transition period, (iv) increasing the participation of the private sector, and (v) strengthening the regulatory environment, including protecting the interest of the end consumer.
Restructuring involves changing the legal framework that will become the basis for structural changes in the future and the privatization of PLN. This includes adjusting electricity tariffs starting from the year 2000 up to the year 2005.
To increase private sector participation, ADB strongly urged the Indonesian government to renegotiate and rationalize the contracts of Independent Power Producers (IPP's). The problem however was that 27 of the power purchase agreement (PPA) contracts made between 1994-1997 had already been reviewed and subsequently cancelled by government in 1998 (although the decision to continue some of these contracts was retracted by the government in March 2002). An ADB official stressed that the Bank will not support any contract cancellation and government must continue to honor them. This situation has placed government in a bind because of the corrupt and onerous nature that these mostly PPA contracts were forged; they should be not be eligible for renegotiation.
PPAs have burdened the PLN greatly and contributed to PLN’s financial crisis even after 1998. IPPs sold electricity to PLN for 8 US cents per kilowatt-hour (KWh) even as electricity rates before 1997 came only to about 7 US cents per kWh. Then due to the depreciation of Indonesian currency in 1998, electricity tariffs fell to 3 cents per kWh.
The concluded renegotiations of government with IPPs last June resulted in the continuation of PPA contracts with 15 IPPs, the acquisition of four IPPs and the closing-out of seven (a total power capacity of about 5,500 MW). The average tariff of new PPA is 5 - 5.5 cents per kWh, far above the average electricity production of PLN, which is 4 to 4.5 cents per kWh. WGPSR has estimated that the new deal with the IPPs would cost PLN at least $ 2 – 2.5 billion dollar per year for 30-40 years long and the costly PPA will be subsidized by consumers through high electricity rates.
Other DMCs
ADB has also been actively pushing for power sector reform in other DMCs through loan funding and/or technical assistance. In 2002, ADB extended several TA loans and grants to various countries for preparations related to power sector reform.
China has received $ 500,000 in technical assistance loans from the ADB for advisory services and operations needed to establish the National Electricity Commission.
The Indian government was also awarded by ADB five technical assistance loans totaling around $2.1 millions.
To Indonesia’s Power Welfare Scheme, ADB provided $800,000 for advisory services and operational costs.
The Philippines government received $800,000 for the Transition to Competitive Electricity Market program.
ADB gave $1,050,000 for Phase II of the Sri Lankan Restructuring Power Sector Program. This program aims to establish an independent regulatory and tariff-setting mechanism, and to encourage private sector participation.
Efforts are also ongoing in Maldives and some Pacific nations and countries in Central Asia.
Critique to Power Privatization
Privatization of power sector has failed to ensure public benefits as promised, as shown by the experience of New Zealand, the US and countries in Latin America and Asia. In many cases, the reform programs created more problems for the sector itself, consumers and whole communities.
In the last five years, we have been witness to a series of disastrous blackouts, skyrocketing power tariffs, increasing corruption and heightening financial problems in the sector. Serious blackouts in US over the past three years, for instance, are commonly scored as one of the impacts of deregularizing and privatizing the power sector .
The power sector reform promoted by ADB and the World Bank proceed from an erroneous diagnosis that public ownership and government monopolies inherently lead to financial crisis and poor performance of public utilities. This has, in turn, led it to adopt the wrong prescriptions, focusing on handing over ownership to the private sector.
In this manner, government effectively abandons the social contract that exists with its constituents; after it has set up the electricity infrastructure, it is now surrendering its obligation to private hands.
Power sector reform renders the public vulnerable to high electricity rates, the profit motive of private power firms, and the loss of control over environment regulation. The end-result is significantly reduced consumer protection and the transfer of corporate debts into public hands.
Requiring power sector reform as a condition for loan disbursements underscores the way the ADB and other international financial institutions believe in a one-size-fits-all-model, applicable to countries everywhere. Power sector reform is being advance by those institutions as panacea for improving technical, financial and managerial performance of power utilities, regardless of differences in the economic level of countries, the level of development of their power sectors, the number of people connected to the grid, and the roots of the crisis faced by various public or state-owned utilities.
Indonesia and Philippines have different stages of power sector development, different models of electricity market structure and different conditions in terms of energy sources. Yet the models and phases for power reform imposed by the ADB and WB on the two countries are almost the same!
ADB has also intervened many times in the internal process of reforms that countries are supposed to enjoy as sovereign states. It has not only limited itself to its role as loan provider but even acts to significantly influence the substance of laws, as well as government policies and programs and regulatory regimes.
ADB practically drafted the Electricity Reform Bill of Bangladesh and worked with the World Bank to draw up the Power Sector Restructuring Policy of Indonesia in 1998. Both institutions were also involved in providing the draft of Indonesian Electricity Bill . The very process of passing the bill into law was facilitated by ADB, which explicitly declared that the second disbursement of the power sector restructuring loan of $200 million plus additional co-financing from JBIC of $200 million, would not be released without the Act in place.
The same is true for the Philippines. From the time EPIRA was being drafted, ADB already exercised undue influence. Suspiciously, the privatization of Napocor was attended by a payoff scandal exposed by two parliamentarians. This was not simply another case of corrupt politics in the south. It exemplifies the tremendous pressure from external donor, like ADB, to privatize state-owned enterprise (Bello, 2000; TNI, 2002) .
Because of flawed processes of reform involving no genuine public participation, ADB’s overarching goal reduce poverty comes under serious question. ADB argues that the reform will help government to cut subsidies for electricity. Government then should be able to allocate funds to other public expenditure priorities such as health and education. This is not entirely true due to the removal of government subsidies. The removal of cross subsides among tariff segments will also increase electricity tariffs for all consumers; small or poor consumers will have to spend bigger portions of their limited incomes for basic needs like electricity.
The government does not always shift subsidies to public expenditure; instead, external and internal debt payments are prioritized because of the shift of the stranded debts of privatized public utilities to public accounts. In contracts with IPPs, government has also been bound to guarantee their level of revenue or return regardless of actual performance.
The idea for encouraging private sector participation in IPP program through BOT/BOOT along with the implementation of the reform has put private profit before public interest. Private investors would always want to limit their losses, which is why they insist on ‘government guarantees’ for their revenues and to cover most of the risks.
ADB’s Partial Risk Guarantee (PRG), in which it guarantees private sector projects rather than provide direct project financing, have to be-counter-guaranteed by national governments. This serves to transfer much of the project risks from the private sector to the public (Pahlman, 1996). Moreover, the case of BOT private infrastructure clearly demonstrates the short-term nature of ADB’s strategies and the lack of accountability in terms of longer-term development goals of DMCs such as debt and risk management. The World Bank itself admits that guarantees could potentially create major budgetary shortfalls and follow on consequences for future generations (Wyatt, 2002).
In the case of the Philippines, Napocor claimed that they are paying about P60 million ($1.5 million) a month to the Department of Finance to guarantee IPP projects started in 1990s.
In Indonesia, developers of Tanjung Jati B power plant required government to guarantee their revenues over a 30-year long contract.
Reforms are supposed to increase the poor’s access to modern energy services, which are important components towards poverty reduction. However, maintaining and extending the supply of electricity to poor people and other unprofitable groups cannot realistically be attractive to the private sector whose eyes are often turned to achieving the greatest profit and commercial returns.
Private companies are very selective in the type of consumers they serve, preferring big consumers to residential consumers. Investments to provide electricity to rural or underdeveloped areas remain small.
As electricity tariffs in a competitive market are volatile, low-income consumers are always in a position of high risk.
Finally, reform has often meant laying off privatized thousands of public utilities employees.
Conclusion
Power sector reform in Asia (and other countries) clearly tends to increase and not alleviate poverty. The debt stocks of countries have increased because of the huge costs backing up reform programs, and the accompanying rise in debt service. While it can be argued that privatization of public utilities in the short term will generate fresh money for government to pay its debts, it can only lead to greater debt burdens in the medium and long term.
In the near future, ADB and JBIC will rank among the major players providing financial support to various countries to jumpstart their reform and power privatization programs. Meanwhile, the World Bank will focus more on policy setting for the reform of the oil and gas sectors.
The victors of the reform and privatization are not the people but multinational development companies (MNCs), regional and local business groups and the international financial institutions. In stark contrast, people especially the poor, will suffer high electricity costs in exchange for even more limited access to electricity connections. In this light, the need for formulating alternatives to power sector reform has become even more urgent.
For the ADB and other multilateral development banks and donor agencies, they have to look more closely to evaluate the implementation of deregulation, privatization and liberalization approaches as prescriptions to solving the power sector crises in developing countries. Those institutions have to move away from their fundamentalism of private sector orientation and “market-locked thinking”.•
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