Publication: Revisiting Reform in the Energy Sector : Lessons from Georgia
This paper reviews the changes in the supply of electricity and gas from the perpective of households, utility operators, and the government. The objective is to highlight lessons from the reforms implemented and to apply them to the future reform program planned for the rest of the energy sector. The paper concludes that improved service quality and the increased supply of clean and subsidized natural gas have offset the potentially negative impact of higher electricity prices. Despite very good performance by the privatized electricity distribution company in Tbilisi, the sustainability of the reform program is still in doubt. Consolidated government expenditures on energy have increased, but to a large extent this simply recognizes costs that were incurred, but not paid, prior to reform. Existing subsidies to households for electricity provide compensation beyond levels that produce large welfare gains. Changing the subsidy system to base targeting on actual levels of electricity consumption while providing enough compensation to ensure the household received a basic level of electricity, would be one option to improve subsidy targeting.
“Lampietti, Julian A.; Gonzalez, Hernan; Wilson, Margaret; Hamilton, Ellen; Vashakmadze, Sergo. 2004. Revisiting Reform in the Energy Sector : Lessons from Georgia. World Bank Working Paper;No. 21. © Washington, DC: World Bank. http://openknowledge.worldbank.org/entities/publication/2e078b67-04de-52ce-9d18-dca1d272bafc License: CC BY 3.0 IGO.”
Other publications in this report series
PublicationBank Loan Classification and Provisioning Practices in Selected Developed and Emerging Countries(Washington, DC: World Bank, 2003)This report reviews loan classification and provisioning practices in a broad sample of countries that differ in size, location and level of financial development. The survey conducted for the report compares the regulatory approaches adopted by industrial and emerging economies, and is intended to complement other sources of information that focus exclusively on either industrial or developing countries. It covers classification of individual and multiple loans, treatment of guarantees, collateral and restructured loans, bank loans review processes, loan loss provisioning, tax treatment of loan loss provisions, disclosure standards, and external auditors' role. Differences in provisioning and classification approaches have often made difficult a comparison of bank and banking system weaknesses across regulatory regimes. Poor classification and provisioning practices have led to solvency ratios that gave a false sense of security, as occurred when seemingly adequately capitalized financial systems failed in the 1990s. Successful regulatory harmonization therefore requires a set of minimum standards for loan classification that is grounded in sound risk management practices, but that is also sufficiently general to recognize differences in national economic and legal environment. The evidence this report provides is intended to contribute to this difficult task.
PublicationPrivate Participation in Infrastructure in China : Issues and Recommendations for the Road, Water, and Power Sectors(Washington, DC: World Bank, 2003)Infrastructure has played a major role in China's rapid development. Over the past decade the road network expanded by more than 40 percent, water production grew by more than 50 percent, and China has become the world's second largest energy producer. However, foreign direct investment in infrastructure accounts for a small share of foreign direct investment flows and for only 10 percent of total investment in infrastructure. Meeting the demand for cheaper, more reliable, and more efficient infrastructure services will require more than US$75 billion a year over the next decade. Increasing the participation of the private sector, domestic and foreign is an obvious policy option. Public-private partnerships can reduce the fiscal subsidies on public agencies and improve the targeting of subsidies to poor people, students, the elderly and other disadvantaged groups. This report reviews China's current framework for private participation in infrastructure. It also compares China's experiences with those of other countries, providing legal, regulatory, and financial framework recommendations as well as sector-specific suggestions.
PublicationAgriculture Non-Point Source Pollution Control(Washington, DC: World Bank, 2003-06)The Chesapeake Bay is the largest and historically most productive estuary in the United States. It is approximately 200 miles long and 35 mile wide at it broadest point. The Bay's watershed includes parts of six states (Delaware, Maryland, New York, Pennsylvania, Virginia, West Virginia, and the entire District of Columbia. This area encompasses 64,000 square-miles, 150 major rivers and streams and has a population of 15.1 million people. It receives half of its water from the Atlantic Ocean; the rest from rivers, streams and groundwater sources. Fifty percent of the freshwater coming into the Bay comes from the Susquehanna River, which starts in New York State and flows through Pennsylvania and Maryland. The Chesapeake Bay supports 3,600 species of plants, fish and animals. It is home to 29 species of waterfowl, a major resting ground along the Atlantic Migratory Bird Flyway, and provides winter nesting for over one million waterfowl. After years of decline, the Bay still supports number of commercial and recreational fisheries, producing about 500 million pounds of seafood per annum. Over the years as its population the watershed grew, use of agricultural chemicals became widespread and livestock numbers increased, the water quality in the Bay declined. Nutrients, sediments and toxic chemicals flowing into the Bay were decreasing dissolved oxygen, increasing turbidity, killing-off sea grasses and producing diseases in fish and shellfish. Research undertaken in the late 1970s and early 1980s determined that the major culprits responsible for the decline of the Chesapeake Bay's health were the excess nutrient loads from municipal wastewater plants and from agriculture and residential lands, the sediment runoff from agricultural and residential construction, and the high level of toxic chemicals coming from industry and agriculture.
PublicationPublic Money for Private Infrastructure : Deciding When to Offer Guarantees, Output-based Subsidies, and Other Fiscal Support(Washington, DC: World Bank, 2003-08)When governments seek private investment in infrastructure projects, they usually find themselves asked to provide grants, guarantees, or other forms of fiscal support. Often they prefer to provide support in ways that limit immediate cash expenditure but sometimes generate large costs later. Seeking to provide support without any immediate spending of cash, for example, governments often agree to shoulder project risks and sometimes encounter fiscal problems later. For example, in the 1970s and 1980s in Spain, the government was obliged to pay $2.7 billion when the exchange-rate guarantees it had given private toll roads were called (Gomez-Ibanez 1993). More recently, the Indonesian government agreed to pay $260 million as a result of its agreements, through the electricity company it owns, to bear demand and foreign-exchange risks in private power projects. Yet even when governments have chosen to provide cash subsidies they have not always achieved their apparent goals: for example, over 80 percent of the Honduran government's "lifeline" electricity subsidies go to customers who aren't poor (Wodon et al. 2003). In still other cases, governments' decisions not to provide support may have caused problems.
PublicationPrivate Sector Participation in the Power Sector in Europe and Central Asia : Lessons from the Last Decade(Washington, DC: World Bank, 2003-06)The Californian power crisis appears to have greatly rekindled the latent doubts on moving to more competitive market structures for such an essential service as electricity. The recent collapse of Enron and several other industrial giants, as well as doubts about the reliability of external audits (resulting, in particular, in the collapse of Arthur Anderson) and the slide in the stock values of AES and other companies has eroded the confidence in the institutional pillars of the market, such as corporate disclosure, external audit, and oversight by regulators and Security Exchange Commissions. Major energy investors, at least in North America, seem to be anxious to clean up their balance sheets to eliminate from their portfolio unprofitable and risky investments. Against this backdrop, the objective of this study is to review the experiences in the ECA regio