35992 ESMAP TECHNICAL PAPER 089 Study on Investment and Private Sector Participation in Power Distribution in Latin America and the Caribbean Region December 2005 Papers in the ESMAP Technical Series are discussion documents, not final project reports. They are subject to the same copyright as other ESMAP publications. ENERGY SECTOR MANAGEMENT ASSISTANCE PROGRAMME (ESMAP) PURPOSE The Energy Sector Management Assistance Program (ESMAP) is a global technical assistance partnership administered by the World Bank and sponsored by bi-lateral official donors, since 1983. ESMAP's mission is to promote the role of energy in poverty reduction and economic growth in an environmentally responsible manner. Its work applies to low-income, emerging, and transition economies and contributes to the achievement of internationally agreed development goals. ESMAP interventions are knowledge products including free technical assistance, specific studies, advisory services, pilot projects, knowledge generation and dissemination, trainings, workshops and seminars, conferences and roundtables, and publications. ESMAP work is focused on four key thematic programs: energy security, renewable energy, energy-poverty and market efficiency and governance. GOVERNANCE AND OPERATIONS ESMAP is governed by a Consultative Group (the ESMAP CG) composed of representatives of the World Bank, other donors, and development experts from regions which benefit from ESMAP's assistance. The ESMAP CG is chaired by a World Bank Vice President, and advised by a Technical Advisory Group (TAG) of independent energy experts that reviews the Programme's strategic agenda, its work plan, and its achievements. ESMAP relies on a cadre of engineers, energy planners, and economists from the World Bank, and from the energy and development community at large, to conduct its activities. FUNDING ESMAP is a knowledge partnership supported by the World Bank and official donors from Belgium, Canada, Denmark, Finland, France, Germany, the Netherlands, Norway, Sweden, Switzerland, and the United Kingdom. ESMAP has also enjoyed the support of private donors as well as in-kind support from a number of partners in the energy and development community. FURTHER INFORMATION For further information on a copy of the ESMAP Annual Report or copies of project reports, please visit the ESMAP website: www.esmap.org. ESMAP can also be reached by email at esmap@worldbank.org or by mail at: ESMAP c/o Energy and Water Department The World Bank Group 1818 H Street, NW Washington, D.C. 20433, U.S.A. Tel.: 202.458.2321 Fax: 202.522.3018 Study on Investment and Private Sector Participation in Power Distribution in Latin America and the Caribbean Region December 2005 Rafael Herz Jan Kappen Lucio Monari Energy Sector Management Assistance Program (ESMAP) Copyright © 2005 The International Bank for Reconstruction and Development/THE WORLD BANK 1818 H Street, N.W. Washington, D.C. 20433, U.S.A. All rights reserved Manufactured in the United States of America First printing December, 2005 ESMAP Reports are published to communicate the results of ESMAP's work to the development community with the least possible delay. The typescript of the paper therefore has not been prepared in accordance with the procedures appropriate to formal documents. Some sources cited in this paper may be informal documents that are not readily available. The findings, interpretations, and conclusions expressed in this paper are entirely those of the author(s) and should not be attributed in any manner to the World Bank, or its affiliated organizations, or to members of its Board of Executive Directors or the countries they represent. The World Bank does not guarantee the accuracy of the data included in this publication and accepts no responsibility whatsoever for any consequence of their use. The Boundaries, colors, denominations, other information shown on any map in this volume do not imply on the part of the World Bank Group any judgment on the legal status of any territory or the endorsement or acceptance of such boundaries. Papers in the ESMAP Technical Series are discussion documents, not final project reports. They are subject to the same copyrights as other ESMAP publications. The material in this publication is copyrighted. Requests for permission to reproduce portions of it should be sent to the ESMAP Manager at the address shown in the copyright notice above. ESMAP encourages dissemination of its work and will normally give permission promptly and, when the reproduction is for noncommercial purposes, without asking a fee. Table of Contents Preface.............................................................................................................................. v Acknowledgement............................................................................................................vii Survey of Private Participation in the Latin American and Caribbean Power Sector........1 Regional Overview........................................................................................................1 Comparative Overview of Countries ...........................................................................12 Comparative Overview of Companies.........................................................................18 Current Strategies of the Main Competitors................................................................23 Private Asset Sales and Market Exits .........................................................................27 Private Participation in Electricity Distribution.............................................................30 Private Investment in Network Extensions..................................................................31 Private Investment in Utility Performance and Modernization.....................................34 Private Investment in Strategic Assets and Market Control........................................37 Analysis of Key Barriers to Investments..........................................................................39 Macroeconomic Barriers .............................................................................................40 Institutional Barriers ....................................................................................................42 Legal/Regulatory Barriers ...........................................................................................45 Political barriers...........................................................................................................47 Investor Survey ...........................................................................................................49 Conclusions.................................................................................................................49 Estimates of Investments in the Electricity Sector ..........................................................51 Proposed Detailed Country Analysis...............................................................................57 Annex 1...........................................................................................................................59 Private Sector Investment in Latin America ....................................................................59 Annex 2...........................................................................................................................67 Work Sheets for Calculation of Estimates for Projected Investments.............................67 Bibliography ..................................................................................................................109 List of Tables Table 1.1: Investor Downgrading Following 2001.............................................................4 Table 1.2: Private Participation in the Power Sector, 2001 Estimate................................5 Table 1.3: Ownership of Generation Capacity, 2002 Estimate .........................................6 Table 1.4: Top 20 Project Sponsors by Total Investment (1990-2002)...........................23 Table 1.5: Private Asset Sales, 2002-2004.....................................................................29 Table 3.1: Projected Investments in the Electricity Sector in Latin America 2005-2015 (in m US$)............................................................................................................................52 Table 3.2: Projected Investments to Increase Access in Latin America in the Distribution Sector 2005-2015 (in m US$) .........................................................................................53 Table 3.3: Reference Scenario: Investment in Electricity in Latin America (billion US$) 54 Table A1.1: Divestitures in Electricity Distribution in Argentina, 1990 - 2002 .................60 Table A1.2: Divestitures in Electricity Distribution in Bolivia, 1990 - 2002 ......................61 Table A1.3: Divestitures in Electricity Distribution in Brazil, 1990 - 2002........................62 Table A1.4: Divestitures in Electricity Distribution in Colombia, 1990 - 2002..................63 Table A1.5: Divestitures in Electricity Distribution in the Dominican Republic, 1990 - 2002 ................................................................................................................................63 Table A1.6: Divestitures in Electricity Distribution in El Salvador, 1990 - 2002 ..............63 Table A1.7: Divestitures in Electricity Distribution in Guatemala, 1990 - 2002 ...............64 iii Table A1.8: Divestitures in Electricity Distribution in Panama, 1990 - 2002 ...................64 Table A1.9: Divestitures in Electricity Distribution in Peru, 1990 - 2002 .........................65 Table A1.10: Divestitures in Electricity Distribution in Venezuela, 1990 - 2002..............65 List of Figures Figure 1.1: Annual Private Investment in the Latin American and Caribbean Power Sector by Sub-Sectors, by Year of Financial Closure 1990-2002.....................................3 Figure 1.2: Percent-Shares of Annual Private Investment in the Latin American and Caribbean Power Sector by Subsectors, 1990-2002 cumulated ......................................4 Figure 1.3: Investment in Power Sector by Sub-Types of Public Participation, Latin America and Caribbean, 1990-2002 cumulated................................................................8 Figure 1.4: Investment in Power Sector by Sub-Types of Public Participation, Latin America and Caribbean, 1990-2002 cumulated................................................................9 Figure 1.5: Greenfield Projects by Subtypes of Private Participation, 1990-2002 ..........10 Figure 1.6: Types of Private Participation, 1990-2002 by year of financial closure ........11 Figure 1.7: Use of Private Funds by Year of Financial Closing (1990-2002)..................12 Figure 1.8: Investment Commitments by Country1, 1990-2002 [$mm cumulated]..........13 Figure 1.9: Cumulated Private Investment Commitments 1990-2002 vs. Size of Markets (I).....................................................................................................................................14 Figure 1.10: Private Participation 1990-2002 vs. Size of Markets (II).............................14 Figure 1.11: Investment Commitments by Sub-Sectors, 1990-2002 cumulated.............16 Figure 1.12: Investment Commitments1 by Types of Private Participation, 1990-2002 cumulated........................................................................................................................17 Figure 1.13: Investment Commitments1 by Use of Funds, 1990-2002 cumulated..........18 Figure 1.14: Investment Commitments by Origin, 1990-2002 cumulated.......................19 Figure 1.15: Top 20 Project Sponsors by Subsector, 1990-2002 [$mm cumulated].......20 Figure 1.16: Top 20 Project Sponsors by Type of Investment, 1990-2002 [$mm cumulated].......................................................................................................................21 Figure 1.17: Top 20 Project Sponsors by Use of Funds, 1990-2002 [$mm cumulated] .22 Figure 1.18: Private Asset Sales 2002-2004 [percent-share of according to $-value of transaction]......................................................................................................................28 Figure 1.19: Latin America and Caribbean Power Market, Recent Development...........30 Figure 1.20: Percentages of Population without Access to Electricity ............................33 Figure 1.21: Increases in Access Following Distribution Privatization ............................33 Figure 1.22: Reductions in Energy Losses Following Distribution Privatization..............35 Figure 1.23: Non Technical Electricity Transmission and Distribution Losses in the Latin American and Caribbean Region....................................................................................36 iv Preface In the 1990s, there has been a significant involvement of private investors in the electricity sector in the Latin America and the Caribbean, which was interrupted abruptly near the end of the decade. It appears that investment in the region has still not recovered, while future energy needs for funding in the sector cannot be met without significant re-animation of private sector interest in the region and the sector ­ most countries operate under tight fiscal constraints that preclude extended public investment. There are a number of lessons learnt through experiences in the various countries in the last 15 years that argue for further studies in more detail on what happened and why it went wrong in some places, or worked well in others. The desk study presents the results of a survey and analysis of the data available on private participation in the power sector in the period 1990-2002, pointing to a series of preliminary findings, and identifies areas where deeper policy analysis is needed so that modalities for public-private partnerships can be proposed and the sector can again attract the needed investments. The final goal of this desk study is to select two or three countries for further analysis. It would be the objective of a subsequent phase, to analyze case studies and present key lessons learnt in selected countries and compare them with international experience. v Acknowledgement This four-part study was commissioned under ESMAP Activity P093135 and carried out by Jan Kappen and Rafael Herz (consultants) and Lucio Monari, Lead Energy Economist, LCSFE, World Bank. The first part reviews the recent trends and features of the private Sector Participation in the Latin America and the Caribbean power sector. This section is based on an analysis of existing databases and on a review of studies and a survey conducted in 2003. The second section presents an analysis of the key barriers to investments based on a review of the existing literature and the experience of the authors. The third section present estimates of investment for the next ten years based on consultants' own analysis of past and projected demand growth scenarios and compared them with estimates from the International Energy Agency. The last section briefly makes a proposal for a detailed country analysis. Special thanks to Ms. Nidhi Sachdeva for desktopping the final report and to Ms. Marjorie Araya for coordinating the publications process, both from ESMAP. vii 1 Survey of Private Participation in the Latin American and Caribbean Power Sector Regional Overview 1.1 Throughout most of the 1990s, many Latin American countries were very successful in attracting a large share of worldwide private investment in infrastructure. Investors were predominantly attracted by a widespread confidence in economic stability, commitment to public sector reforms and far-reaching privatizations of state owned enterprises. During the early 1980s, Chile was the first country to introduce comprehensive reforms aimed at opening the power sector to private participation and competition. By the end of the 1990s, Latin America had the largest share of private electricity projects among all developing regions worldwide. More than 38 percent of the total investment in the developing world power sectors was placed in Latin America. 1.2 As a result of this development, private investors absorbed an increasing part of the necessary expansion and modernization investments particularly in generation capacity and, to a less extent, distribution networks and thereby reduced the budgetary pressure on governments strained by large transfers of tax money to state owned utilities. 1.3 Towards the end of the 1990s, after more than 7 years of dynamic investment growth, macroeconomic shocks as well as overall political and economic instability radically undermined the prospects for growth and private participation in infrastructure. The power sector was the infrastructure sector most affected by this decline with many developers suffering a tremendous increase in their cost of capital1 and subsequently being forced to swiftly divest and pull back from the Latin American market.2 1.4 After having grown from 6 percent in 1990 to 43 percent in 1997, when private capital flows into the Latin American and Caribbean power sector reached their peak, the share of annual investment in the power sector plunged back to 16 percent in 2001. 1see Table 1.1 2see section 1.5 1 2 Study on Investment and Private Sector Participation in Power Distribution in Latin America and the Caribbean Region During the above period, total annual investments in the power sector dropped from 23 billion to less than 4 billion Dollars, the lowest level since 1994.3 1.5 The collapse of investment was particularly drastic for private funds invested in acquisitions of distribution-, transmission and integrated utilities. The magnitude of the slowdown was a consequence of the conclusion of major divestiture programs in these areas and, to some degree, a result of the region's economic crisis4. Following 1998, with many sectoral privatization programs coming to an end, new private investment remained small and was largely dominated by the addition of new generation capacity through greenfield projects. There were also a number of international factors which contributed to the slowdown in investments, including the over-arching expectations about returns in the developing countries by investors (which did not materialize), and the ENRON crisis. These important supply side effects are not the subject of this preliminary study, which focuses on the demand side factors. 3Izaguirre / Hahn / Khuu / Nellis (2004) 4Izaguirre / Hahn / Khuu / Nellis (2004) Chapter 1: Survey of Private Participation in the Latin American and Caribbean Power Sector 3 Figure 1.1: Annual Private Investment5 in the Latin American and Caribbean Power Sector by Sub-Sectors, by Year of Financial Closure 1990-2002 [$mm] Sum of Total Investment 25000 20000 15000 Subsector Integrated Utilities Electricity generation Electricity distribution and transmission 10000 5000 0 1990 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 ClosureYear Source: PPI database (2004), ECLAC (2001), own calculations 5 Investments in infrastructure projects have generally been recorded on a commitment basis in the year of financial closure (for which data are typically available). Actual disbursements are not tracked. Where divestitures are phased or where investment requirements are defined by requirements on service coverage and quality and data are available (such as for large privatized electricity and telecommunications companies), the investments are recorded in the years in which the transactions take place. Where investments in acquiring government assets are due over the period of a concession, an estimate of their present value is recorded in the year of financial closure. 4 Study on Investment and Private Sector Participation in Power Distribution in Latin America and the Caribbean Region Figure 1.2: Percent-Shares of Annual Private Investment in the Latin American and Caribbean Power Sector by Subsectors, 1990-2002 cumulated Integrated Utilities Electricity 18% distribution and transmission 34% Electricity generation 48% Source: PPI database (2004), ECLAC (2001), own calculations Table 1.1: Investor Downgrading Following 2001 Developer S&P Rating August 2001 S&P Rating March 2003 Enron BBB+/Stable D NRG Energy Inc. BBB-/Stable D Reliant Energy Power. BBB+/Stable B-/Watch Dev. Endesa A+/Neg. BBB-/Neg. CMS Energy BB/Stable BB/Neg. ABB AA+/Neg. BB+/Neg. AES Corp. BB/Positive B+/Neg. Cogentrix Energy Corp BB+/Stable BB/Watch Neg. Edison Mission Energy BBB-/Stable BB-/Neg. Source: Bloomberg Online 1.6 Despite the meltdown of private investment at the end of the decade, the surge of private participation during the 90s dramatically changed the landscape of the Latin American power sector. In particular the generation sub-sector experienced a drastic shift from exclusive state ownership to the considerable private sector participation. 1.7 However, as Table 1.2 shows, privatization of the electricity sector is far from complete in Latin America and the Caribbean. In most countries, the state still controls sizeable amounts of the generation, transmission and distribution segments. Conflicts of interest may arise within the government itself. This may be caused by the fact that the government assumes many different roles with respect to the electricity industry, as legislator, regulator, owner and purchaser of electricity. Multiplicity of roles may give origin to conflicts of interest and to the erosion of regulatory power.6 6Milan/Lora/Micco (2001) Chapter 1: Survey of Private Participation in the Latin American and Caribbean Power Sector 5 Table 1.2: Private Participation in the Power Sector, 2001 Estimate Generation Transmission Distribution Argentina 60% 100% 70% Bolivia 90% 90% 90% Brazil 30% 10% 60% Chile 90% 90% 90% Colombia 70% 10% 50% Costa Rica 10% 0% 10% Dominican Republic 60% 0% 50% Ecuador 20% 0% 30% El Salvador 40% 0% 100% Guatemala 50% 0% 100% Jamaica 20% 0% 0% Mexico 10% 0% 0% Paraguay 0% 0% 0% Peru 60% 20% 80% Trinidad & Tobago 40% 0% 0% Uruguay 0% 0% 0% Venezuela 20% 10% 40% Source: Espinasa (2001). 1.8 In 2002, more than 30 percent of the generation capacity in the Latin American and Caribbean region was operated and managed by corporations where private investors owned at least a 30 percent stake of the equity.7 1.9 Yet, Table 1.3 illustrates that many countries with a large share of hydropower in their generation mix (i.e. Brazil, Argentina, Peru) were apparently reluctant to exceed a certain level of private participation in their generation capacities involving large dams and other significant hydropower facilities. 1.10 In some cases, the simple explanation for the lower share of private participation in generation capacity is the fact that in many Latin American countries a large share of hydropower stems from bi- or multinational projects (i.e. Itaipu, involving Argentina, Brazil and Paraguay, or Yacyreta between Argentina and Paraguay) that for political and regulatory reasons are difficult to transfer into private ownership or management. Other reasons for the unwillingness to privatize sizeable shares of hydropower resources are oftentimes the important social implications of the management of hydropower facilities and in particular large dams (i.e. environmental, irrigation, transport routes) as well as the ability of private hydropower operators to influence market prices in their favor. 1.11 Colombia, even though it features a 63 percent-share of hydropower in its generation mix and at the same time an impressive 58 percent-share of private participation in power generation, is not an exception to the above phenomenon. The 7see Table 1.3 6 Study on Investment and Private Sector Participation in Power Distribution in Latin America and the Caribbean Region main goal of the Colombian sector reform program that started in the beginning of the 90s was to drastically increase the share of thermoelectric capacity, which more than doubled in the decade thereafter. Therefore, compared to the new thermoelectric capacity that is almost 100 percent in private hands, the bulk of hydroelectric capacity is still predominantly under public ownership. Table 1.3: Ownership of Generation Capacity, 2002 Estimate Total generation capacity Country [MW]1 % private ownership2 % hydro3 Brazil 76,139 29% 83% Mexico 42,484 15% 23% Argentina 27,039 63% 35% Venezuela 21,226 1% 62% Colombia 13,141 58% 63% Chile 10,269 61% 40% Peru 5,906 38% 50% Cuba 4,411 5% 1% Ecuador 3,136 18% 56% Dominican Republic 3,081 72% 13% Costa Rica 1,715 13% 72% Guatemala 1,697 52% 32% Jamaica 1,584 53% 4% Trinidad and Tobago 1,417 99% 0% Panama 1,260 82% 49% Bolivia 1,227 75% 30% El Salvador 1,134 46% 36% Honduras 914 27% 47% Nicaragua 643 35% 16% Grand Total 218,421 32% 55% Source: PPI database (2004), OLADE (2003), own calculations (1) OLADE (2003) (2) Percentage of generation facilities with more than 30 percent private sector participation (3) Share of electricity from hydroelectric facilities 1.12 Probably the most typical feature of private participation in the Latin American power sector has been the striking predominance of divestitures and greenfield projects.8 Up until 1999, divestitures have been the most common form for introducing private participation in electricity, unlike in other areas of infrastructure reform, such as the water sector, where privatizations have been relatively scarce.9 8see Figure 1.3 9Izaguirre (1998) Chapter 1: Survey of Private Participation in the Latin American and Caribbean Power Sector 7 1.13 Of the total investment in private electricity projects, about 67 percent has been directed to the 144 divestitures, and 32 percent to the 167 greenfield projects10. Interestingly, despite the dramatic meltdown of investment at the end of the 90s, greenfield investments appeared to be more resistant to the unfavorable macroeconomic environment, and continued to develop at almost unchanged pace and magnitude across most countries of the Latin American and Caribbean Region. 1.14 Conversely, concessions11 as well as management or lease operations contracts12 which were quite frequent in the region's water sector have been very rare in the electricity sector. In the years from 1990 to 2002 only five concession contracts have been signed, all of which were subject to the operation and/or refurbishment of power generation facilities.13 In the same period, only two very small-scale management contracts have been signed in the entire Latin American and Caribbean Region. Of these two, only one contract (Electricité de Haiti) involved a capital expenditure by private sponsors (EDF, Hydro-Quebec, 4.7 Million) in expanding or rehabilitating facilities. The other contract (Empresa Distribuidora de Electricidad de San Luis, Edesal, Argentina) simply transferred the management of distribution facilities to a private operator (Union Fenosa) while leaving the public sector responsible for new investments. 1.15 The predominant "sub-types" of private participation were full or partial privatization, greenfield projects operated as merchant plants in the more liberalized markets such as Argentina and Chile, and "Build, Own, and Operate" contracts in other countries.14 A "Build, Own, and Operate" contract is a commercial agreement, wherein a private sponsor builds a new facility largely at its own risk, transfers ownership to the government, leases the facility from the government and operates it at its own risk, and eventually receives full ownership of the facility at the end of the concession period. The 10Izaguirre (1998) 11Concessions: A private entity takes over the management of a state-owned enterprise for a given period during which it also assumes significant investment risk. The PPI - database, from where the data of this survey is extracted, classifies concessions in the following three categories (see PPI-Glossary): 1. Rehabilitate, operate, transfer. A private sponsor rehabilitates an existing facility, then operates and maintains the facility at its own risk for the contract period. 2. Rehabilitate, lease or rent, transfer. A private sponsor rehabilitates an existing facility at its own risk, leases or rents the facility from the government owner, then operates and maintains the facility at its own risk for the contract period. 3. Build, rehabilitate, operate, transfer. A private developer builds an add-on to an existing facility or completes a partially built facility and rehabilitates existing assets, then operates and maintains the facility at its own risk for the contract period. 12Management and lease contracts: According to the PPI-database, these contracts can be divided into two subclasses: 1. Management contract. Usually the government pays a private operator to manage the facility and retains much of the operating risk. 2. Lease contract. A private operator typically pays a fee to the government for the right to manage the facility and takes on most of the operating risk. 13Izaguirre / Hahn / Khuu / Nellis (2004) 14see Figure 1.4 8 Study on Investment and Private Sector Participation in Power Distribution in Latin America and the Caribbean Region government usually provides revenue guarantees through long-term take-or-pay contracts for bulk supply facilities or minimum traffic revenue guarantees.15 1.16 Temporary arrangements such as management contracts as well as forms of private participation where ownership after the expiration of a concession period is transferred back to the state ("Build, Own, Transfer", or "Build, Own, Operate, Transfer") where almost never employed.16 1.17 From 1990-2002, of all funds employed for divestitures in the region, more than 25 percent have been spent on expanding or rehabilitating the facilities of utilities that were privatized beforehand. Of all greenfield projects that reached financial closure in the region by 2002, "Build, Own, Operate" or "Build, Own, Transfer" schemes made up for about 73 percent and the remainder consisted of merchant power plants. Most of the investment into "Build, Own, Operate" or "Build, Own, Transfer" schemes was captured by projects in Colombia, Brazil, and Guatemala, countries that had already embarked on comprehensive reform of their electricity sectors. The other nineteen contracts were signed by Costa Rica, Jamaica, the Dominican Republic, and Honduras, which in most cases have adopted the Asian model of private participation.17 Figure 1.3: Investment in Power Sector by Sub-Types of Public Participation, Latin America and Caribbean, 1990-2002 cumulated Concessions 1% Greenfield projects 32% Divestitures 67% Source: PPI database (2004), own calculations 15see PPI glossary (2004) 16see Figure 1.4 17Izaguirre (1998) Chapter 1: Survey of Private Participation in the Latin American and Caribbean Power Sector 9 Figure 1.4: Investment in Power Sector by Sub-Types of Public Participation, Latin America and Caribbean, 1990-2002 cumulated Build, own, and Rehabilitate, operate operate, and 14% transfer Build, own, and 0% transfer 6% Build, rehabilitate, operate, and Partial transfer Privatization 1% Full Privatization 53% 14% Management contract Merchant 0% 12% Source: PPI database (2004), own calculations 1.18 Since 1997, mostly as a result of the increasing volatility of market prices for electricity throughout the region, the share of merchant plants18 is continuously decreasing.19 1.19 Another relatively recent development is the trend towards a larger share of "Build, Own, Transfer" schemes, which before 1997 were hardly ever employed. Since 1997, more than $5 billion of total investment was allocated through these contracts, of which more than $4 billion were invested in Brazil alone. 18Merchant plant/facility: A private sponsor builds a new facility in a liberalized market in which the government provides no revenue guarantees (see PPI Glossary). 19see Figure 1.5 10 Study on Investment and Private Sector Participation in Power Distribution in Latin America and the Caribbean Region Figure 1.5: Greenfield Projects by Subtypes of Private Participation, 1990-2002 100% 90% 80% 70% 60% Merchant 50% Build, own, and transfer Build, own, and operate 40% 30% 20% 10% 0% 1990 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 Source: PPI database (2004), own calculations 1.20 The strong preference for divestiture and greenfield projects and the only sporadic use of other forms of private participation is mainly a result of the region's prevalent approach to power sector reform: Following the Chilean model, most Latin American countries have introduced private participation in electricity as part of broader reforms that usually included the establishment of a vertically separated market structure. 1.21 This approach in general entailed the transfer of most generation and distribution assets to the private sector. Therefore, major generation and distribution divestitures have been very frequent across all reforming countries in the region. Most notably, Argentina, Bolivia, Brazil, Chile, Colombia, and Peru have privatized the great majority of their distribution and generation facilities as stand-alone businesses.20 1.22 The above shift from divestiture to greenfield projects also led to a fundamental alteration in the way funds were used after the financial meltdown in 1997. The increased proportion of greenfield projects led to a sharp decrease of funds invested in government 20Izaguirre (1998) Chapter 1: Survey of Private Participation in the Latin American and Caribbean Power Sector 11 assets (such as existing plants and facilities or non tangible assets such as concessions and license fees) while investment into expansion and modernization remained almost unchanged. 1.23 As a result, Figure 1.7, "Use of Private Funds", shows a very similar pattern to Figure 1.6, "Types of Private Participation", featuring a strong decline of private funds allocated to the purchase of government assets, while expansion and modernization investments remain relatively stable. Figure 1.6: Types of Private Participation, 1990-2002 by year of financial closure Subsector (All) [$mm] Sum of Total Investment 25000 20000 15000 TypeOfPPI Management and lease contract Concession Greenfield project Divestiture 10000 5000 0 1986 1987 1988 1989 1990 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 ClosureYear Source: PPI database (2004) 12 Study on Investment and Private Sector Participation in Power Distribution in Latin America and the Caribbean Region Figure 1.7: Use of Private Funds by Year of Financial Closing (1990-2002) [$mm] 25,000 20,000 15,000 Expansion, Modernization Purchase of Govmt. Asset 10,000 5,000 0 1986 1987 1988 1989 1990 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 Source: PPI database (2004), own calculations Comparative Overview of Countries 1.24 From 1990 to 2002, the Latin American and Caribbean region's 25 countries granted a total of 316 projects involving private participation. By the end of 2002, Brazil, Argentina, Colombia and Chile were all among the top ten developing countries in the world in terms of private investments in the electricity sector, with projects worth $44 billion, $15 billion, $6.5 billion and $6.1 billion in that order.21 Even though Brazil started its reforms of the power sector relatively late in the process compared to Chile and Argentina, by 2002 it attracted more that $43 billion of cumulated investment commitments or almost 50 percent of the private investors in the regions power sector. Argentina followed with 16 percent, and both Columbia and Chile with 7 percent respectively. 21PPI-database (2004), see Figure 1.8 Chapter 1: Survey of Private Participation in the Latin American and Caribbean Power Sector 13 Figure 1.8: Investment Commitments by Country1, 1990-2002 [$mm cumulated] Brazil 43,612 Argentina 14,586 Colombia 6,512 Chile 6,193 Peru 4,303 Mexico 3,897 Dominican Republic 2,309 Guatemala 1,433 Panama 1,065 El Salvador 985 Bolivia 507 Jamaica 490 Nicaragua 347 Costa Rica 319 Ecuador 310 Trinidad and Tobago 207 Honduras 182 Cuba 165 Belize 154 Venezuela 133 Guyana 50 Dominica 26 Grenada 6 Haiti 5 Source: PPI database, own calculations (1) Excluding bi-national projects 1.25 With the exception of countries that were more reluctant to private participation models in infrastructure (i.e. Mexico, Venezuela, Cuba), that only recently started to open up their power sector to private participation (i.e. Dominican Republic, Ecuador, Nicaragua), or that show a particularly slow reform process (i.e. Costa Rica, Honduras), the magnitude of private investment mostly corresponded with the comparative size of the markets, meaning the largest markets accounted for the greatest share of private investment commitments. Brazil and Argentina for instance jointly accounted for ca. 46 percent of the region's generation capacity, and comprised more than 60 percent of total investments in region's power sector22. 22see Figure 1.9 14 Study on Investment and Private Sector Participation in Power Distribution in Latin America and the Caribbean Region Figure 1.9: Cumulated Private Investment Commitments 1990-2002 vs. Size of Markets (I) Brazil 49% 37% Mexico 4% 24% Argentina 16% 9% Venezuela 0% 9% Colombia 7% 5% Chile 7% 4% Private Investment [% of total LAC] Peru 5% Annual Production in 2001 [% of total LAC] 2% Source: PPI database (2004), ECLAC (2001), own calculations Figure 1.10: Private Participation 1990-2002 vs. Size of Markets (II) Cuba 0.2% 1.6% Ecuador 0.3% 1.1% Dominican Republic 2.6% 1.0% Costa Rica 0.4% 0.8% Jamaica 0.7% 0.5% Guatemala 1.6% 0.6% Trinidad and Tobago 0.2% 0.6% Panama 1.2% 0.5% Bolivia 0.6% 0.4% Honduras 0.2% 0.4% El Salvador 1.1% 0.4% Private Investment [% of total LAC] Nicaragua 0.4% Annual Production in 2001 [% of total LAC] 0.2% Source: PPI database (2004), ECLAC (2001), own calculations Chapter 1: Survey of Private Participation in the Latin American and Caribbean Power Sector 15 1.26 In the examined decade from 1990 to 2002, the five countries with the largest power sectors in the Latin American and Caribbean region followed a comprehensive, sector-wide approach to reform and unbundling involving the privatization of companies in generation as well as in power distribution and transmission. 1.27 However, about half of the region's second and third tier power markets, such as Mexico, the Dominican Republic, Costa Rica, Ecuador, Honduras and Venezuela limited private participation more or less exclusively to the generation subsector with the exception of a few integrated utilities that typically featured only minor distribution and transport assets. Most of the second tier countries such as Mexico and the Dominican Republic started their sector reforms only relatively recently and during the early phases of reform tend to focus on either greenfield projects or privatizations. The third-tier countries mostly consist of small markets typically too small to fully benefit from the competition-enhancing effects of unbundling and the privatization of distribution and transport utilities, and therefore predominantly show a greater share of greenfield projects aimed at enhancing the generation capacity.23 1.28 Chile belongs to neither of the two groups, it only shows a small portion of transactions in the transmission and distribution subsectors due to the fact that both were already entirely privatized in the late 1980s. 23see fig. 11 16 Study on Investment and Private Sector Participation in Power Distribution in Latin America and the Caribbean Region Figure 1.11: Investment Commitments by Sub-Sectors, 1990-2002 cumulated Brazil Argentina Colombia Chile Peru Mexico Dominican Republic Guatemala Panama Electricity distribution and transmission El Salvador Electricity generation Integrated Utilities Bolivia Jamaica Nicaragua Costa Rica Ecuador Honduras Belize Venezuela Haiti 0% 20% 40% 60% 80% 100% Source: PPI database, own calculations (1) Excluding bi-national projects 1.29 Concerning the different types of private participation amongst the countries of the region, a similar pattern compared to the one already observed in the distribution of investments among sub sectors seems to be prevalent. Small countries in general and in particular small countries that started their reform processes late tend to have a limited variety of the different possible types of private participation in their portfolio. Chapter 1: Survey of Private Participation in the Latin American and Caribbean Power Sector 17 Figure 1.12: Investment Commitments1 by Types of Private Participation, 1990- 2002 cumulated Brazil Argentina Colombia Chile Peru Mexico Dominican Republic Guatemala Panama Concession Divestiture El Salvador Greenfield project Bolivia Management and lease contract Jamaica Nicaragua Costa Rica Ecuador Honduras Belize Venezuela Haiti 0% 20% 40% 60% 80% 100% Source: PPI database, own calculations (1) Excluding bi-national projects 1.30 The majority of countries that were among the late power sector reformers in the region were affected by the shift from divestiture to greenfield projects that was increasingly prevalent during the late 1990s. Costa Rica, Ecuador and Honduras are the countries that were most concerned by this effect with portfolios that do not include a single divestiture. 1.31 Mexico only started its sector reform program relatively early in 1992, but limited competition and private participation to IPP, auto generation and power imports only. Consequently, the expenditure of private funds in these countries is restricted to expansion investments into new facilities and the enlargement of existing capacity alone. 18 Study on Investment and Private Sector Participation in Power Distribution in Latin America and the Caribbean Region Figure 1.13: Investment Commitments1 by Use of Funds, 1990-2002 cumulated Argentina Colombia Chile Peru Mexico Dominican Republic Guatemala Panama El Salvador Expansion, Modernization Bolivia Purchase of Govmt. Assets Jamaica Nicaragua Costa Rica Ecuador Honduras Belize Venezuela Haiti 0% 20% 40% 60% 80% 100% Source: PPI database, own calculations (1) Excluding bi-national projects Comparative Overview of Companies 1.32 With the participation of international investors across North America, Europe and the Latin American and Caribbean countries, and all Top 10 investors adding up to less than half of the total investment in the sector, the sources of investment in the region's power sector appear to be well diversified throughout the region. 1.33 However, the great participation of Latin American investors24 is somehow misleading, given the fact that Spanish Endesa is the majority shareholder of Enersis and Endesa Chile, both by far the largest Latin American investors. 24 See fig. 14 Chapter 1: Survey of Private Participation in the Latin American and Caribbean Power Sector 19 1.34 Furthermore, in contrast to what the large number of competitors throughout the region might suggest, several large power markets in the region are subject to critical market concentration issues. Especially in Argentina, cross-ownership and the de-facto re-integration of the market resulting from the acquisition of Endesa Chile by Endesa Spain, raised concerns as to whether enough attention has been paid towards the preventing excessive market concentration.25 The Chilean power market has also shown signs of considerable market concentration, with Endesa owning and operating about 65 percent of the generation capacity in the central system. Other controversial issues have been a de-facto vertical integration and cross ownership issues, resulting from Endesa's dominance of the transmission and upstream markets. Figure 1.14: Investment Commitments by Origin, 1990-2002 cumulated US 29% Europe 30% LAC 41% Source: PPI database (2004), ECLAC (2001), own calculations 1.35 With the exception of the acquisitions of Edenor and Edesur by Electricité de France and Endesa in 1992, US- and European investors during the early 90s predominantly focused on the strategic acquisition of generation assets. Only towards the second half of the decade, investors started to widen their focus across subsectors and aggressively for bid power distribution and -transport networks as well as for integrated utilities. However, by the end of the 1990s, the region's financial crisis brought most investments in transport and distribution assets to a halt. Since the year 2000, due to political pressure and the absence of potential buyers, Latin American and Caribbean governments and international investors alike have mostly abstained from further privatizations of distribution utilities. 1.36 For the above reason, the majority of investors that show significant participation in power transmission and distribution are part of the first generation of private sponsors that entered the distribution market during the heydays of power market privatization and 25See chapter 2, market regulation. 20 Study on Investment and Private Sector Participation in Power Distribution in Latin America and the Caribbean Region have been active in the market for almost a decade.26 Despite the current market prices resulting from a surge of market exits27 and the resulting drop of market prices for distribution utilities, most of the new market players abstained from investments in power transport and distribution. 1.37 Private participation in Latin American and Caribbean power distribution and transport subsectors also appears to be matter of company size since outside the Top 15 investors in the region, private participation in both subsectors is only sporadic. Figure 1.15: Top 20 Project Sponsors by Subsector, 1990-2002 [$mm cumulated] AES Corporation (US) Electricite de France Endesa Chile SUEZ (France) VBC Energia (Brazil) Iberdrola SA (Spain) Light Rio Servicos de Electricidade SA Endesa Spain Enersis (Chile) Cia. Naviera Perez Companc (Argentina) Electricity generation Electricity distribution and transmission Electricidade de Portugal SA Integrated Utilities Duke Energy Corp. (US) Enron (US) Banco do Brasil Union Fenosa (Spain) Community Energy Alternatives (US) Gener/Chilgener (Chile) TotalFina (France) El Paso Energy International (US) InterGen (US) - 2,000 4,000 6,000 8,000 10,000 Source: PPI database, own calculations 1.38 The analysis of the distribution of the different types of private participation and the use of funds shows a similar picture. Only the top competitors participated in the major divestitures and allocated a significant part of their funds into the purchase of government assets such as distribution facilities or concessions. 1.39 Despite the shift from divestitures to greenfield projects that occurred towards the end of the 90s, all of the top 15 companies still have asset portfolios that are largely 26see Figure 1.15 27see Table 1.4 Chapter 1: Survey of Private Participation in the Latin American and Caribbean Power Sector 21 dominated by generation and distribution assets acquired during the region's utility privatizations.28 In the years from 1990 to 2002, 79 percent of the funds employed by the top 15 investors were assigned to divestitures and only 21 percent into greenfield projects (with a remainder of 2 percent corresponding to concession contracts). 1.40 The small investor's portfolio somehow shows the mirror image of the above: None of the bottom 100 investors has more than two projects in their Latin American and Caribbean investment portfolio, and only 26 percent of their total investment is allocated into divestitures whereas the great majority of funds of about 72 percent is invested in greenfield projects and (remainder of 2 percent corresponds to concession contracts). 1.41 A similar distribution seemed to prevalent in the use of funds, with the top 15 investors dedicating only 41 percent of their resources to modernization and expansion investments, whereas the bottom 100 investors used more than 80 percent of their funds for upgrading and capacity enhancement investments.29 Figure 1.16: Top 20 Project Sponsors by Type of Investment, 1990-2002 [$mm cumulated] AES Corporation Electricite de France Endesa (Chile) SUEZ VBC Energia Iberdrola SA Light Rio Servicos de Electricidade SA Endesa (Spain) Enersis Cia. Naviera Perez Companc Divestiture Greenfield project Electricidade de Portugal SA Concession Duke Energy Corp. Enron Banco do Brasil Union Fenosa Community Energy Alternatives (CEA) Gener (Chilgener) TotalFina El Paso Energy International InterGen - 2,000 4,000 6,000 8,000 10,000 Source: PPI database, own calculations 28see Figure 1.16 29see Figure 1.17 22 Study on Investment and Private Sector Participation in Power Distribution in Latin America and the Caribbean Region Figure 1.17: Top 20 Project Sponsors by Use of Funds, 1990-2002 [$mm cumulated] AES Corporation Electricite de France Endesa (Chile) SUEZ VBC Energia Iberdrola SA Light Rio Servicos de Electricidade SA Endesa (Spain) Enersis Cia. Naviera Perez Companc Electricidade de Portugal SA Modernization, Expansion Purchase of Govmt.assets Duke Energy Corp. Enron Banco do Brasil Union Fenosa Community Energy Alternatives (CEA) Gener (Chilgener) TotalFina El Paso Energy International InterGen - 2,000.00 4,000.00 6,000.00 8,000.00 10,000.00 Source: PPI database, own calculations Chapter 1: Survey of Private Participation in the Latin American and Caribbean Power Sector 23 Table 1.4: Top 20 Project Sponsors by Total Investment (1990-2002) Electricity Distribution and Electricity Integrated Total Country transmission generation utilities investmt.2 Company Name1 of origin [%] [%] [%] [$mm] AES Corporation US 37% 22% 41% 16,088 Enersis Chile 44% 2% 0% 7,408 Endesa (Spain) Spain 32% 13% 0% 7,311 Electricite de France France 11% 5% 27% 6,852 Iberdrola SA Spain 29% 11% 0% 6,444 Endesa (Chile) Chile 0% 38% 0% 6,154 Banco Bradesco Brazil 38% 0% 0% 6,076 VBC Energia Brazil 29% 8% 0% 5,951 Electricidade de Portugal SA Portugal 24% 4% 5% 5,150 SUEZ France 0% 26% 4% 4,796 Construcoes e Comercio Camargo Correa Brazil 19% 3% 0% 3,552 Cia. Naviera Perez Companc Argentina 18% 2% 0% 3,268 Light Rio Servicos de Electricidade SA Brazil 20% 0% 0% 3,169 Duke Energy Corp. US 0% 19% 0% 3,061 Chilectra Chile 18% 1% 0% 2,999 Mirant US 0% 1% 16% 2,621 Community Energy Alternatives (CEA) US 14% 2% 0% 2,603 Enron US 9% 7% 0% 2,575 CMS Energy Corporation US 0% 15% 0% 2,464 Banco do Brasil Brazil 14% 0% 0% 2,234 Total 22.6% 11.3% 9.2% 100,776 Source: PPI database (2004), own calculations. (1) Projects can be associated with more than one sponsor. (2) Total investment from all sources in projects in which sponsor had an equity participation of 15 percent or more. Current Strategies of the Main Competitors AES Corporation, United States 1.42 In 2004, more than half of AES's assets in the power sector were situated in Latin America, with an investment portfolio that includes Argentina, Brazil, Chile, Colombia, Venezuela, the Dominican Republic, El Salvador, Honduras, Mexico, and Panama. In 2002 and 2003, AES has undertaken a comprehensive global restructuring, including the sale of 14 subsidiaries, with the exception of Brasilia Energia, all of which in regions other than Latin America and the Caribbean. In the Latin American region, AES has 24 Study on Investment and Private Sector Participation in Power Distribution in Latin America and the Caribbean Region increased its stake in many companies, buying shares from other players who are currently exiting the market.30 In addition, it was effectively forced to take over the shares of several Argentinean joint ventures for a total of $ 376 million, including the transfer of PSEG Global's 30 percent interest in the three Argentine distribution companies EDELAP, EDEN and EDES, a 19 percent share in the 650-MW Central Termica San Nicolas power plant, and a 33 percent interest in the 830-MW Parana power plant, all abandoned by its partner PSEG.31 1.43 After defaulting on loans from its subsidiary Eletrobras and its Chilean subsidiary, AES Gener, AES has systematically renegotiated the debt of all its subsidiaries in Brazil and reduced Gener debt by $250 million.32 In the Dominican Republic, AES sold its interests in the distribution company EdeEste, while maintaining the interests in generation. In Argentina, AES notes that "In 2003, the political and social situation in Argentina showed signs of stabilization, the Argentine peso appreciated to the U.S. dollar, the economy and electricity demand started to recover" and that renegotiation of utilities concessions remains open until the end of 2004.33 Empresa Nacional de Electricidad SA (Endesa), Spain 1.44 Endesa has been active in Latin America since the early 1990s. In June 2004, Endesa's management stated that it will stop expanding operations in Latin America as it tries to obtain returns on recent investments that have brought it control of 10 percent of the continent's electricity sector34. To justify the risks on Latin American investments and to recoup previous losses, the company is aiming for considerably higher returns on its Latin American assets compared to its European portfolio. 1.45 Although Endesa plans to invest $2.9bn in Latin America over the next few years, the bulk of these funds will mostly be employed to maintain existing assets rather than undertake new investments.35 Endesa is actively seeking more local partners, so that investment will come from local sources rather than Spain.36 Endesa's Chilean subsidiary, Enersis, had to carry out a major financial restructuring in 2002, arranging an extra $2.3 billion loans to avoid having to repay existing loans. Despite this, the credit rating of Enersis has been reduced to BBB-.37 In Brazil however, Endesa decided to reinvest in its distribution companies rather than agree to a refinancing arrangement with Brazilian bank BNDES (as was done by other companies, like for example AES). In Argentina Endesa is involved in negotiations with the government to try and retain its 30Hall (2004) 31http://www.gasandoil.com/goc/company/cnl13988.htm 32http://www.aes.com/aes/index?page=news&reqid=511079 33AES Annual report (2003) 34 Business News Americas-English February 2, 2004 Monday Endesa to halt LatAm expansion 35Hall (2004) 36 Business News Americas-English June 7, 2004 Monday Endesa seeks local partners in Argentina, Brazil 37 Business News Americas-English July 2, 2004 Friday Fitch affirms Endesa, Enersis BBB- ratings Chapter 1: Survey of Private Participation in the Latin American and Caribbean Power Sector 25 investments, reclaim its dollarization agreement and increase electricity prices to improve profits.38 Electricité de France (EDF), France 1.46 Across the Latin American and Caribbean Region, EDF has invested in operations in electricity generation and distribution in Argentina and Brazil, as well as in generation facilities in Mexico. In 2003, operations in Mexico were mostly lucrative and profitability steadily improved in its operations in Argentina and Brazil, but it lost nearly 1 billion with its Brazilian distributor "Light.". EDF's strategy is now to concentrate on Europe. 1.47 In 2003, EDF brought arbitration cases to the World Bank's International Centre for Settlement of Investment Disputes (ICSID) concerning the Argentinean government's sudden ending of dollarization. EDF has also approached banks to begin restructuring the financial liabilities of its subsidiaries. It has demanded price rises for its distribution companies, but the Argentinean government has not granted any so far. The government has instead decided to impose fines as a penalization for all blackouts that occurred within its concession area since 2001. In July 2004, EDF announced it is selling its stake in the Argentinean distributor Edemsa (Mendoza province) to a local business group.39 Iberdrola, Spain 1.48 Iberdrola is a Spanish company with investments in Brazil, Bolivia, Guatemala and Mexico. Its main presence is in a group of distribution companies in the northeast of Brazil. It has recently invested in a 520MW gas-fired generator in the region, all of the output from which will be bought by Iberdrola's distribution companies. According to the 2003 annual report, this investment is fully funded from the surplus of Iberdrola's Brazilian energy operations, not through imported capital. 1.49 Two of Iberdrola's Brazilian distribution companies, Coelba and Cosern, have recently publicized plans to tap local capital markets by issuing bonds worth $143m and $40m respectively.40 CMS Energy, United States 1.50 CMS Energy once had broad ambitions in Latin America's gas and power sectors, but decided to slash its overseas presence in order to refocus on its home market (6m customers throughout the state of Michigan). In October 2001, CMS Energy decided to discontinue the operations of its international energy distribution business, but in 2003, it reclassified a large part of its distribution assets as continuing operations due to its inability to sell these assets. 38Hall (2004) 39Hall (2004) 40Hall (2004) 26 Study on Investment and Private Sector Participation in Power Distribution in Latin America and the Caribbean Region 1.51 The company has been marketing its regional assets since late 2001, pursuing an individual asset sale strategy, but is finding weak demand. Since 2003, the company hopes to divest its 15 percent equity interest and associated US$140 million debt in 1,320 MW Argentine hydro generator El Chocon. However, the deal is contingent on the provincial government of Neuquen, where the power station is located, making a planned buyout offer for CMS' stake. Even if that transaction proceeds, CMS will still be left with significant interests in three other Argentine power plants, in Argentine gas pipeline TGN, in Chile's integrated gas and power project GasAtacama, and in Venezuelan state utility SENECA. 1.52 In 2004, CMS announced a loss of $400m on its Argentinean operations.41 Comparable to EDF, it has taken court action against the government of Argentina's devaluation of the Peso and the forced ending of dollarized end user tariffs.42 Mirant Corporation, United States 1.53 Mirant unloaded its money-losing 706 MW Chilean thermal generator Edelnor in early 2002 for US$4.5 million. At year-end 2002, it also completed its exit from South America by selling its 3.6 percent stake in CEMIG--Brazil's largest integrated power generation and distribution company.43 CenterPoint, United States 1.54 Houston-based CenterPoint, formerly Reliant Energy, timed most of its Latin America asset sales more fortunately than other investors, managing to sell off its stakes in three Colombian and two Brazilian electric utilities in 2000. It also sold two Argentine businesses in 2003: a 160 MW gas-fired cogenerator was sold for US$23.1 million in February, and its 90 percent stake in Santiago del Estero provincial utility Edese was sold for a reported US$850,000 in April.44 Tractebel/Suez, France 1.55 The energy division of Suez Tractebel has major stakes in generating companies in Brazil, Chile, and Peru and Mexico as well as some gas distribution companies in Mexico. 1.56 It has suspended investment in Brazil for the last two years and will not invest further depending on the development of the government's policies for the energy market45. Tractebel complains that the current policies put Tractebel "in an unfair position by forcing it to compete with state-controlled generators."46 41CMS Energy 10-Q filed on 05/07/2004. 42Bloomberg News . 07/06/2002 43Hall (2004) 44Global Power Report, Feb 27, 2003 45Global Power Report March 18, 2004 46Hall (2004) Chapter 1: Survey of Private Participation in the Latin American and Caribbean Power Sector 27 Enron, United States 1.57 Under a plan announced recently, a new holding "International Co" would administrate "all or a portion" of Enron's interests in its international electric as well as its natural gas utilities and pipelines. The gas pipeline and distribution assets include the Electridade Servicios SA (Elektro) power distribution company, which has 1.5 million customers in Sao Paulo State, Brazil.47 1.58 The power plant assets to be administered (and ultimately sold), comprise a 480- MW gas-fired plant in Cuiaba, Mato Grosso, Brazil; 100 percent of Enron America del Sur, which operates a 70-MW power facility in Argentina; a 51 percent holding in Bahia Las Minas Corp. in Panama, which operates a 280-MW generating facility; 35 percent of Empresa Energetica de Corinto, a 71-MW station in Nicaragua; a 38 percent holding in the 234-MW Puerto Quetal Power plant in Guatemala; an 85 percent holding in Smith/Enron Cogeneration LP, which operates a 185-MW unit in the Dominican Republic.48 Private Asset Sales and Market Exits 1.59 In the last two years, planned and realized asset sales of private investors in the Latin American and Caribbean Power sector have totaled more than $3.6 billion.49 Considering the weak demand and plunging prices for power market assets all across the region, many more deals are likely to be in the pipeline but temporarily put on hold until the market shows signs of recovery. 1.60 As to the distribution of private asset sales between the different subsectors, sales of generation assets seem to have occurred in a considerably higher proportion (65 percent) than the share of private participation in generation assets across the Latin American and Caribbean region (48 percent) would suggest.50 This disconnect is likely to be a result of distribution assets being more difficult to market after the recent occurrences of government interventions like tariff freezes and dis-indexation that affected private investment in distribution very negatively. 47Hall (2004) 48Power in Latin America, May 23, 2003. 49see Table 1.5 50see Figure 1.18 and Figure 1.2 28 Study on Investment and Private Sector Participation in Power Distribution in Latin America and the Caribbean Region Figure 1.18: Private Asset Sales 2002-2004 [percent-share of according to $-value of transaction] Integrated Utilities Distribution Transmission 13% 19% 3% Generation 65% Source: PPI database (2004), Bloomberg (2004), Proquest (2004), Power in Latin America (2004), own calculations. Chapter 1: Survey of Private Participation in the Latin American and Caribbean Power Sector 29 Table 1.5: Private Asset Sales, 2002-2004 Expected Expected Realized Sale Holdings Price Price Seller Project-, Asset name Subsector Country Date [%] [$mm] [$mm] ABB Termobahia (190 MW) generation Brazil Aug-03 49 256 AES Corp AES Gener (,748 MW) generation Chile Mar-04 19 150 AES Brasilia Energia generation Brazil Mar-04 53.84 600 Alliant Cataguazes-Leopoldina group generation Brazil Jul-03 49.2 76 CenterPoint Argener, Cogen Plant (160 MW) generation Argentina Feb-03 100 23 CMS Energy CPEE group distribution Brazil Jun-03 93.9 92 Constellation, PPL, Covanta Valle Hermoso (195 MW ) generation Bolivia May-03 50 34 Duke Energy Corani hydro generation Bolivia May-03 50 405 San Marcos thermoelectric Duke Energy project (88 MW) generation Bolivia Dec-02 46 70 Electricite de Empresa Distribuidora de France Electricidad de Mendoza distribution Argentina Jan-05 51 280 Endesa Cia. Electrica del Rio Maipo integrated Chile Mar-03 100 201 Endesa Chile Transmission lines transmission Chile Jul-03 110 100 110 Endesa Chile Cautillar hidroelectric generation Chile Mar-03 100 174 Endesa Chile Traselec integrated Chile Dec-00 100 1057 Enron Monterrey (254 MW) generation Mexico Dec-02 80 151 Enron Monterrey (254 MW) generation Mexico Jan-03 20 38 FirstEnergy Guaracachi generator (200 MW) generation Bolivia Apr-03 50 47 Iberdrola Ibener (124 MW ) generation Chile Aug-04 94.74 123 Mirant Empresa Electrica Del Norte integrated Chile Sep-01 82.3 380 Compania Boliviana de Energia NRG Electrica (204 MW) generation Bolivia May-03 98 40 Bulo Bulo thermo plant (84 NRG MW) generation Bolivia May-03 60 40 NRG TermoRio (1,040-MW) generation Brazil Jan-04 15 80 PSEG, Sempra Luz del Sur distribution Peru Apr-04 13.6 31 Sempra Luz del Sur distribution Peru Nov-03 42 90 50% of Chilquinta Energia, Sempra electricty distributor distribution Chile Mar-04 50 320 Edegel (Central Costanera Southern Cone 2,302-MW, San Isidro 370-MW Power Peru ) generation Peru Feb-04 24 135 Tractebel Enersur (339-MW) generation Peru Feb-04 21 48 Tuxpan, Hermosillo, and Union Fenosa Nogales generators generation Mexico Jun-03 50 300 Xcel Energy Energia del Sur (76 MW) generation Argentina Mar-03 90 10 Source: Bloomberg Online, Proquest, Power in Latin America (2004) 30 Study on Investment and Private Sector Participation in Power Distribution in Latin America and the Caribbean Region Figure 1.19: Latin America and Caribbean Power Market, Recent Development Domestic Integrated Gas and Power (Petrobras) Mitsubishi Tractebel PSEG Niche Reliant Players? CMS Mirant New NR EDF IPPs? G Venture Union Capital? Fenosa Integrated Gas and AES Power? Iberdrol a PPL Local Power Companies El Paso Enron (Eletrobras, COPEL, Cemig) TransCanada EDP Established IPPs? Endesa FirstEnergy Source: based on Cano (2003) Private Participation in Electricity Distribution 1.61 For most of the last decade, the bulk of privatizations in electricity distribution worldwide took place in Latin America, where primarily US and Spanish companies acquired and exchanged the great majority of available distribution assets. In the years from 1990 to 2002 more than $30 billion worth of divestitures were undertaken in the Latin American and Caribbean distribution subsector alone. 1.62 In the 12 years following 1990, Brazil comprised the greatest share in the region's distribution network privatizations totaling more than $20 billion. Argentina followed with a total $5.5 billion, and Colombia and Peru with $1.8 billion and $1.3 respectively. In all four countries, private buyers were mostly North American and European. Regional Chapter 1: Survey of Private Participation in the Latin American and Caribbean Power Sector 31 investors merely acted as local subsidiaries of American or European investors (i.e. Endesa Chile, Enersis) or only played a minor role.51 1.63 The following section tries to outline the most important trends in the two main areas of investment - network extensions and investments in modernization and utility performance - and provide a brief account of the concerns stemming from major strategic acquisitions of the region's key investors. Private Investment in Network Extensions 1.64 One of the most common failures of the former state owned utilities in the Latin American and Caribbean power sector and therefore a key concern for many reforming governments has been a sustained under-investment in distribution infrastructure. However, even in 2001, after more than a decade of distribution privatizations, almost 60 million people or 12% of the region's population, in particular poor peri-urban and rural population, were still without access to electricity.52 1.65 The prevailing logic of market reforms throughout the region suggested that large amounts of private capital would be invested in network extension and the formalization of grid connections, in order to increase the market size and maximize consumer payments.53 1.66 Concerning the expansion of privatized distribution networks, there is some evidence to suggest that in some cases the private sector does better than public provision. The private sector's technical and managerial competence, combined with more sustainable pricing policies and better financial discipline, provide more resources for investing in expansion and relax the investment constraints which prevailed under public provision. As a result, in many cases the biggest gains from private provision come through increased investments to meet increasing demand and serve previously unattended consumers.54 However, it should be noted that network extension has also been significantly subsidized by public funds. The optimality and effectiveness of these interventions, e.g., Guatemala, has recently been questioned. 1.67 A recent example for the successful extension of access to electricity through private participation has been the privatization of electricity distribution in Lima, which has lead to a much larger coverage by the private companies with government support.55 Coverage of electricity has also increased in Chile since privatization, with the biggest increases being seen for those with lowest income.56 51see Tables A1.1 to A1.10 52see Figure 1.20 53Estache/Foster/Wodon (2002) 54Harris (2003) 55see Figure 1.21, Torero/Pasco-Font (2001) 56Estache, et al. (2000) 32 Study on Investment and Private Sector Participation in Power Distribution in Latin America and the Caribbean Region 1.68 However, contrary to the idea that market liberalization leads to market expansion and thereby investments in new distribution networks, many critics have argued that market reform, if left unregulated, is likely to benefit only established customers and networks. This argument is based on the experience that private utility operators often tend to discriminate amongst consumer groups if there are large differences of perceived likely returns between them. Consequently, low-income areas and consumers are more likely to be perceived as a high risk/low return market. This tendency is particularly prevalent, where regulatory capacity is weaker, and where reform legislation and policies have been rushed through quickly with no particular concern for low income groups and rural access.57 Monetary incentives to expand the system are vital and can be done through binding obligations and targets to increase access. 1.69 Without specially targeted schemes and interventions, privatized distribution utilities have been likely to move away from the huge investments and financial risks involved in improving and extending the electricity grid of rural, peri-urban and low- income populations. In Argentina, the two privatized distribution companies in Buenos Aires, being confronted with the needs of hundreds of thousands of low-income consumers came up with a "4-year plan" involving significant assistance from the federal and provincial governments.58 57Haselip (2004) 58Haselip (2004) Chapter 1: Survey of Private Participation in the Latin American and Caribbean Power Sector 33 Figure 1.20: Percentages of Population without Access to Electricity Haiti Nicaragua Honduras Bolivia Guatemala Dominican Republic El Salvador Peru Paraguay Panama Ecuador Colombia St. Vincent and the Grenadines St. Lucia St. Kitts and Nevis Guyana Grenada Dominica Belize Antigua and Barbuda Jamaica Venezuela, RB Argentina Brazil Mexico Costa Rica Uruguay Chile 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% Source: Olade (2003) Figure 1.21: Increases in Access Following Distribution Privatization Source: Torero and Pasco-Font (2001), World Bank/PPIAF (2002). 34 Study on Investment and Private Sector Participation in Power Distribution in Latin America and the Caribbean Region Private Investment in Utility Performance and Modernization 1.70 Before privatization, with governments often lacking the ability to efficiently manage public enterprises or using state owned utilities for non-commercial objectives, distribution companies were frequently over-staffed and badly managed. As a result, taxpayers frequently ended up suffering the cost of those inefficiencies as governments incurred substantial fiscal deficits supporting bungling utilities.59 1.71 Consequently, in many cases throughout the region, the almost immediate result of privatizations of distribution utilities was a substantial improvement of labor productivity60. For example, Chilectra, Chile's largest distribution utility, more than doubled its annual sales of electricity since privatization, from 3,612 GWh in 1987 to 9,253 GWh in 2001, and its customer base grew from 973,000 to 1,289,000. The number of workers, meanwhile, fell from 2,587 to 722, and the number of clients per worker grew from 376 in 1987 to 1,785 in 2001.61 1.72 The Chileans often regarded as pioneers in improving the efficiency and quality of service of privatized companies, later profited from their early expertise as they participated in the privatization of many distribution companies in Argentina, Brazil, Peru and Colombia. A good example of this pattern may be found in CODENSA, the privatized Bogota distribution company that increased customers per employee from 800 to 1,900, and reduced the frequency of service interruptions and mean interruption time by more than 30 percent in only two and a half years.62 1.73 A recent study of privatized Brazilian distribution utilities during the period from 1995 to 2000 observed impressive reductions of controllable costs per unit of up to 10% and increases of labor productivity of more than 140%.63 59Harris(2003) 60Some of the productivity improvement implicit in the labor indicators could be attributed to the outsourcing of a number of services that the newly privatized companies have undertaken. 61Fischer/Gutierrez/Serra 62Milan/Lora/Micco (2001) 63Mota (2003) Chapter 1: Survey of Private Participation in the Latin American and Caribbean Power Sector 35 Figure 1.22: Reductions in Energy Losses Following Distribution Privatization Source: Feler (1999). Losses include both technical and non-technical losses. 1.74 Non-technical losses and deficient payment discipline is a great challenge in many countries of the Latin American and Caribbean region, with roughly half of the region's countries showing losses above 20% of electricity fed into distribution networks.64 Accordingly, in countries where deficient meter reading and billing was very prevalent, one of the focal points of private participation was the investment in metering as well as billing and collection mechanisms.65 Improvements in collections have often been rapid in electricity companies with private participation. For instance in Chile, losses in electricity transport and distribution have more than halved over the levels when the sector was publicly owned.66 1.75 However, for many privatized utilities, the need for improvement of collections and non- technical losses meant having to disconnect large quantities of illegally connected end users and customers in default of payment. 1.76 In Argentina, many of the lowest-income groups were illegally connected to the system, causing substantial leakage.67 Consequently, the first step taken by the privatized companies was to cut the supply to these poor neighborhoods. Mainly due to open public outrage, a significant portion of illegally connected end-users were incorporated into regular service and their consumption registered and metered by the distribution company. Before Argentina's financial meltdown, municipal authorities throughout the country heavily subsidized the electricity services supplied to these poor areas. Sufficient funds for these payments were generated through municipal charges or taxes applied to 64see Figure 1.23 65Harris (2003) 66Estache/Rodriguez-Pardina (1998) 67Chisari/Estache/Romero (1997) 36 Study on Investment and Private Sector Participation in Power Distribution in Latin America and the Caribbean Region electricity tariffs.68 However, in the aftermath of Argentina's economic crisis, these funds have dried out and the percentage of non-technical losses is again rapidly increasing, making the economic recovery of many distressed distribution companies even harder. 1.77 After the 1999-restructuring of the power sector in the Dominican Republic, distribution networks were transferred to a consortium consisting of AES (US) and Union Fenosa (Spain). Soon after the privatization, to reduce losses and keep up with customers failing to pay, AES was cutting off some 2000 people a day, although it was reported that more three quarters reconnected illegally.69 Figure 1.23: Non Technical Electricity Transmission and Distribution Losses in the Latin American and Caribbean Region Haiti Nicaragua Dominican Republic Venezuela, RB Ecuador Guatemala Colombia Panama Honduras Brazil Uruguay Mexico Argentina El Salvador Bolivia Peru Jamaica Costa Rica Chile Paraguay 0% 10% 20% 30% 40% 50% 60% Source: WDI Database (2004) 68EIA (2004) 69Bayliss (2001) Chapter 1: Survey of Private Participation in the Latin American and Caribbean Power Sector 37 Private Investment in Strategic Assets and Market Control 1.78 Most of the downward pressure on prices from electricity restructuring traditionally comes from promoting efficiency at the firm level through sector unbundling and wholesale competition.70 In Argentina, for example, where a strongly competitive market was established in the 1990s, electricity prices demonstrated a consistent downward trend following the market restructuring in the early 1990s, falling about $1.67/MWh annually.71 1.79 However, there is growing evidence that in some countries of the Latin American and Caribbean region, effective price competition is increasingly hampered by a creeping monopolization and re-integration of the market. In these countries, a few major investors, through a series of strategic investments and mergers, were able to gain a significant degree of market control through horizontal and/or vertical integration that endangers the functioning of the market and may be difficult to remove. 1.80 In El Salvador, AES effectively gained control of three major distribution companies comprising more than 60% of the market and serving 3.5 million people by incrementally buying out the shares of the two participants (Grupo EDC of Venezuela and Reliant (US)) that originally owned the distribution companies in a 50%/50% joint venture. In addition, shortly after gaining control of the consortium, AES acquired Compania de Luz Electrica de Santa Ana (CLESA) increasing its Salvadorian market share by another 206,000 customers. As a result, AES is now in control of four of the five companies that were subject to the 1998-privatization program.72 1.81 Other examples of re-integration issues are Peru, where Endesa's exercises a dominant position in both generation and distribution sectors after it acquired control over the Chilean holding company Enersis and its Peruvian subsidiaries, as well as Argentina, where Endesa and Enersis hold substantial stakes in both of the largest distribution companies.73 70Newberry (1999); Kessides (2004) 71Strategis(2004), http://strategis.ic.gc.ca/epic/internet/inimr-ri.nsf/en/gr-78498e.html 72Bayliss (2001), see Table A1.6 73Bayliss (2001), see Table A1.9 2 Analysis of Key Barriers to Investments 2.1 As presented and discussed in Chapter 1, the Latin American region has gone through a broad, reform process in the electricity sector. While many countries (Chile, Argentina) went through a full and comprehensive reform process wit many, new private investors entering the market, others (Mexico, Uruguay) have only recently begun attempts at liberalization and deregulation of their electricity markets. In between, there are many examples of different degrees of reform and private investment. In most cases, private participation was part of a broader reform that included some form of vertical separation in the market structure. 2.2 The first section also revealed that private interest was widespread at the beginning of the reform process, initially mainly directed towards divestitures and then mostly to greenfield developments. It also became clear that private interest has been gradually retracting from the electricity sector in the region, with many players leaving the region and others not expanding investments any further. 2.3 From the perspective of the countries and their customers, reform has had some mixed results. In most cases quality standards were raised and coverage increased, at the same time as labor productivity improved substantially. However, reform has also seen cross-ownership and de-facto re-integration in some cases, limiting therefore competition and possible benefits intended at the beginning of the process. In other cases, market liberalization has not led to additional investments in the distribution networks, benefiting more the established residential and industrial customers than expanding service. Nevertheless, the fiscal, financial and service benefits have outweighed the disappointments, thus leading for a continued search for additional private investment in the future, whilst correcting the mistakes and regulatory constraint of the recent past. 2.4 General economic and political aspects, as well as sectoral aspects are the main reasons for the decline of private investment in the energy sector and the market exit by many participants since the mid-1990s. This section provides an analysis of four aspects that have been most common for the reduction in private sector interest in electricity sector in Latin America: (i) macroeconomic barriers, (ii) institutional barriers, (iii) legal/regulatory barriers and, (iv) political barriers. In addition a short summary of a survey of international investors in the power sector will be presented, before concluding with some recommendations. 39 40 Study on Investment and Private Sector Participation in Power Distribution in the Latin American and Caribbean Region 2.5 The analysis below needs not only to describe reasons for decline in private sector interest, but requires also considering the desired outcome of sector reform, in terms of efficiency and consumer benefits. For example, policies or developments that protect incumbent private sector operators from competition are an important element of the problems facing electricity sector reform in Latin America. Similarly, allowing horizontal re-integration through acquisitions by a single, private participant are not desired outcomes and will inevitably lead to either (i) decline in interest by possible new, private players, or (ii) dissatisfaction by the public in general. The latter is likely to lead to obstacles in a continued reform process. 2.6 Two methodological clarifications are required. In this first part of the proposed study, many of the aspects considered are more anecdotal in nature. More detailed quantifications will be available in the next phase of the analysis, when in-depth country studies will allow also interviews with investors and likely access to some more precise data at companies' level. 2.7 The second aspect to be clarified involves the specific considerations with respect to the distribution sector. While the analysis tries to concentrate on the aspects related to and surrounding distribution companies, inevitably some of the aspects described are either more general in nature (i.e. impact also other sub-sectors) or are originated by institutional or regulatory issues affecting initially the generation sub-sector, but having consequences for the distribution firms. Macroeconomic Barriers 2.8 The best examples of macroeconomic barriers to private investment are Argentina and Brazil. In both cases, devaluation and macroeconomic instability represented unexpected shocks by private investors. Repercussions have been felt well beyond these two countries. Many private investors (actually in generation and distribution) decided to retract to their base countries avoiding exchange rate risk altogether. 2.9 In the case of Argentina, the collapse of the dollarization and currency board, led in the late 1990's and early 2000's to pesification and desindexation together with devaluation. This in turn, led to economic and financial imbalances for foreign investors and caused major pullouts. A devaluation of 60% in real terms, directly reduced tariff income by that amount. 2.10 In a simplified description of events, the Argentinean electricity sector disaster occurred when private distributors started defaulting on dollar-denominated debt, because the initial introduction and later devaluation of the peso made it difficult or even impossible to honor the contracted obligations74. Private investors were betting on a dollarized economy and had correspondingly entered into dollar-denominated debts without any apparent need for hedging arrangements. Since the initial problems 74see, Bouille, Dubrovsky, Maurer (2003) Chapter 2: Analysis of Key Barriers to Investments 41 encountered, several foreign distribution companies have taken legal steps against the government because of losses caused by devaluation and conversion of dollar- denominated tariffs. 2.11 The Brazilian case is similar, although somewhat different with respect to the original causes. Private sector investors had to face heavy losses when the currency crashed in the second half of the 1990's. The Brazilian devaluation (around 40%) was not the consequence of the inflexibility of a currency board scheme, but rather the outcome after the authorities were not able to undertake the required macroeconomic reforms, especially introducing the required fiscal reforms. An important flavor of the Brazilian crisis lies with the financing of the privatization of the distribution companies. Local currency financing through BNDES (the local development bank) was not made available for acquisition of companies by foreign investors75. Consequently, investors had purchased the companies through dollar-denominated loans. Examples include AES and Iberdrola amongst others. 2.12 Once the tariffs of a devalued "Real" were not sufficient to meet the contracted obligations, many foreign investors were faced with the most typical and structural problem of exchange rate risk. The investors were unable to meet the obligation with respect to the debts contracted to purchase the companies. Since the original crisis, many of these investors have been able to successfully restructure their external debt. However, those efforts have come at high costs and negative results on the income statements. 2.13 In addition to the "exchange rate risk" aspects of the Argentinean and Brazilian cases, other macroeconomic barriers to continued private sector interest have been derived from low sector profitability. This in turn is normally the result from retail tariffs that do not cover costs. Fear by government of the short-term inflationary pressure of tariff hikes, has often (i.e. Bolivia, Colombia, Guatemala) led to either delaying or avoiding the necessary tariff adjustments altogether. Private investors were therefore faced with rates of return well below their initial expectations. 2.14 An overall volatile macro environment or macroeconomic restrictions on debt financing have been also important barriers to renewed private sector interest in investing in the distribution sector in the region. For example, restrictions to local debt financing (i.e. Costa Rica) have resulted in lacking behind with respect to the needed investment targets to reduce losses and increase efficiency in the sector. Instable macroeconomic conditions in some Central American (i.e. Honduras) and even South American countries have limited the investment in required additional generation capacity, which in turn has restricted the expansion of the distribution companies. Finally, an issue at stake in Central America is the small size of countries/economy, which results in the need for supra- national connections. This is a challenging undertaking given the political and economic ramifications. 75see Rosenzweig, Voll, Pabon Agudelo (2004) 42 Study on Investment and Private Sector Participation in Power Distribution in the Latin American and Caribbean Region 2.15 The late 1990's also saw a deepened recession in most of the region. This in itself has unlikely reduced private sector interest. Private investors have a long-term view, with possible short-term demand reductions not necessarily affecting the long-term return expectations. However, macroeconomic crises have led in some cases (Colombia, Argentina, Brazil, Mexico amongst others) to either a slower pace in the reform process (passing of crucial legislation was or has been delayed like Mexico and Brazil), or reform processes have been halted or even reversed. It is this type of instability and uncertainty that has and will continue to affect private interest in the distribution sub-sector. Institutional Barriers 2.16 Power sector reform in Latin America is at different stages for different countries. Some countries are at advanced stages of liberalization (i.e. Chile, Argentina), some are still testing different approaches (i.e. Mexico, Venezuela), while several have only started to carefully undertake some initial steps towards liberalization (i.e. Uruguay and Paraguay). However, even in those countries with more advanced reform processes, substantial institutional barriers continue to prevail, that have led to the reduced interest by private players76. 2.17 Again, the Argentinean case is representative. Despite the initial success in attracting private investors into the generation and distribution sub-sectors, several factors impeded a broader and more sustained transition towards private sector participation. The cumbersome privatization processes with participation of multiple agencies and legislative bodies made it extremely costly and difficult for new private investors to participate in the bidding process. This was especially the case if regional enterprises were involved77. 2.18 Another example of similar problems includes Bolivia78, where while the Ministry of Capitalization was in charge of the privatization of the SOE in distribution, poor inter-agency coordination followed in aspects related to finalizing the divestiture process and more importantly in aspects of sector oversight. 2.19 However, institutional barriers to private investment in Argentina do not stop at the initial divestiture process. Moreover, multiple entities for sector oversight and their limited capabilities make it extremely difficult to understand the ultimate goals and purposes of the authorities. Again, these problems become further exacerbated with a lack of coordination with local authorities when regional markets are involved. 2.20 In addition to those cases where competition has been limited because of incumbent market power or cross-ownership between generator and distributors, private investors have been deterred due to the role and power of large omnipresent state-owned 76see Millan (2002) and Benavides (2002) 77see, Bouille, Dubrovsky, Maurer (2003) 78see O'Sullivan, Gutierrez (2000) Chapter 2: Analysis of Key Barriers to Investments 43 players. This applies to such diverse cases as Mexico (two large integrated SOE's), Costa Rica (one large integrated SOE), or Colombia (one large SOE in generation, and several regionally owned companies in distribution). In some of the countries that have only initiated the reform process, vertical and horizontal integration is the rule, especially of privatization has not yet occurred on a broad basis. Such market structures deter potential private investors, especially if they cannot foresee what the final intention in terms of market structure is. 2.21 A pervasive characteristic that has led to lesser interest by private investors is the continued role of the state in multiple functions79. The government often continues to play a role in providing transmission and system operating services, while being the regulator and having political oversight. This paired with a continued role of either nationally or regionally owned enterprises in generation and distribution that are competing with private players, has increased mistrust and led to lost confidence by potential private investors. 2.22 Other institutional barriers and sectoral problems can be extrapolated from the Brazilian example. Here, one ministerial agency has had and continues to have large responsibilities including award of concessions, design of sector policies, and regulation of new bidding processes amongst others80. This large amount of several and diverse obligations centralized in one entity have led to a slowdown in planned capacity enlargement, as well as in slow-paced new efforts for enhanced rural electrification. Further private investment in distribution entities might be compromised by the most recent legal changes that require distributors to forecast and contract new generating capacity. This is not an easy task given the lack of data on supply and demand projections. In addition, weak contract enforcement, continued vagueness in tariff-setting provision and the aforementioned "dollar cost/real revenue" mismatch continue to impact private sector interest in a big and growing market. 2.23 In many countries, responsibilities amongst several government entities are not clear, making it difficult for private players to understand the "playing field." In Colombia for example, there are overlapping areas of jurisdictional authority between entities such as the regulatory body, the super-intendancy in charge of supervision and control and that in charge of competition policies. In Colombia, as well as in many other countries also the boundary between regulation and political oversight is not clear, often leading to contradictory decisions and often changes in rules. 2.24 Unclear distribution of roles and responsibilities amongst Government entities is not a minor issue. It leads to reduced confidence and trust by the new or potential private investors. In Central America, examples range from the inexistence of a defined body for 79see Lamech, Saeed (2003) 80see Mota (2003) 44 Study on Investment and Private Sector Participation in Power Distribution in the Latin American and Caribbean Region sector coordination and policy (El Salvador) to undefined composition and capabilities of the market administrator (Guatemala)81. 2.25 Another widespread institutional issue relates to the quality of service. It is certainly the case that often the main reason for seeking private investors is improving the quality in the provision of services. However, when technical and black losses, as well as inefficient and unreliable operating systems are too widespread, private investors tend to shy away from what seem insurmountable challenges. 2.26 In addition, private investors have complained about missing support or vague policies in critical areas. Examples include, little if any support from host governments to collect debts owed to them by customers. This applies even more so, when customers are state-owned entities or public agencies. Even countries with more advanced reform processes like Argentina, Chile, Bolivia or Colombia have never instituted policies or legal frameworks to support collection efforts by newly privatized distribution companies. 2.27 Another issue that has led to a disappointing view by many new investors in the distribution sector relates to the inability of the institutions to respond to the challenges of the ongoing operations under new market structures. Many of the independent or semi- independent dispatch centers have not always been able to accommodate the required technical complexity, or have often not been able to play the clearing house role required for contracts signed between generators and distributors. 2.28 Finally, and critically important, the governmental institutions have often not complied or delayed implementation of contractual commitments. These include, amongst others, on-time payments of subsidies, regulatory or operational commitments acquired in the privatization process, administrative support or shareholder agreements as part of the post-divestiture market structure. In addition, promised Government support to reduce technical losses, to disconnect non-paying customers, to expand service by providing rights of way or environmental licenses has often been lacking. In specific cases in Argentina and Brazil, the government committed to reimburse the privatized utilities for the unpaid balances for "illegal connections" or to support installment of meters or "legal" connections to the network. Many times these commitments were not complied with as political resistance grew or fiscal resources were not available. . Probably the most important complaint by private investors relates to this non- compliance with established commitments82. 81see Ruffin (2002) 82see Lamech, Saeed (2003) Chapter 2: Analysis of Key Barriers to Investments 45 Legal/Regulatory Barriers 2.29 The main and repeated issue that can be found with respect to regulatory barriers relates to the inexistence of a truly independent regulator. This is the case in such different countries as Argentina and Chile (with a long and well-developed experience on sector reform) or Costa Rica. In the more advanced countries such as Argentina and Chile, the identified problem has been leniency towards the accumulation of power by certain market players (i.e. incumbent, private investors). In other cases, the missing independence has sometimes favored existent regional or national state-owned enterprises. In Colombia, for example, while the regulator is independent as per the letter of the law, the financial and political dependency on the Central Government has constrained its ability to maintain a truly neutral position83. 2.30 More than just the "prima-face" independence, private investors want to know how regulators are selected and paid to understand the institutional set-up of the sectoral regulators. Selection of regulators by the executive or legislative branch has different implications for stability and responsiveness. Also, hiring experts from independent technical lists as opposed to political appointees plays a major role. Furthermore, payments of the sectoral budget depending on yearly approvals by Congress or parliament certainly allows for less "continuity" than payments of contributions by the companies themselves. Thus, private investors look not only at the "independence" in terms of the actual relationship to Government ministries but moreover with respect to appointment and payment of regulators and technical support. 2.31 In addition, many of the regulatory bodies face major challenges either because they are new and have to learn the tasks ahead, the appointees and/or technical personnel do not have the required capabilities, or it is faced with multiple tasks within the sector or even across industries. Furthermore, in some countries (i.e. Chile) the regulator does not have the required flexibility to set and enforce rules, given the complicated and stringent legislative process to issue norms and regulations84. 2.32 A second general aspect found in many countries in the region, including those with more advanced liberalization programs relates to limited competition. Take the example of Chile. Even in this country that had one of the earliest and most successful reform programs, market power of single players (i.e. ENDESA) makes new entry into the market nearly impossible. Cross-ownership and market dominance have resulted in de-facto vertical integration. A similar case is Peru, where horizontal re-integration has been the case due to cross-ownership issues that have led to reduced competitive pressure. 83Millan, Lora, Micco (2201) 84see Fischer, Gutierrez, Serra (2003) 46 Study on Investment and Private Sector Participation in Power Distribution in the Latin American and Caribbean Region 2.33 The third group of regulatory barriers is linked to the price regulations themselves. The regulations for distribution tariffs in Latin America range from indexed retail tariffs with seasonal prices aimed at protecting final consumers from volatility, through price cap systems with complicated formulas, reference prices set or recommended by regulators to set rates of return for different time periods. Most of these schemes have resulted in insufficient tariffs and are often onerous and difficult to administer. Some of the countries that have started more recently with the reform efforts need a total overhaul of the tariff system85. 2.34 In addition to the tariff regulations themselves, prevailing subsidy schemes continue to impose challenges that have been difficult to accept by private investors. While many countries have succeeded to reduce subsidies with the correspondent political side effects (see below), regionally diversified and complicated cross-subsidy schemes continue to exist. This together with non-compliance by the government to transfer budgeted subsidies to the distribution companies has added to financial losses and administrative burdens for the newly privatized or to be privatized discos. All of the above has resulted in many distribution companies being under increased financial distress. 2.35 A fourth regulatory/legal challenge to increased private investment lies with the discriminatory application of rules. The most wide spread examples include regional differences in the definition and application of regulations (i.e. Argentina and Brazil) to inconsistent application of rules and penalties for meeting quality standards (i.e. Peru, Brazil). This inconsistent application of rules has led to private investors limit any further expansions or investment, as they do not see the conditions for a fair competitive environment. In addition, the enforcement of quality standards is often weak, leading to an uneven playing field between state-owned distributors and private competitors, who often provide better services86. 2.36 Discrimination can also be found in how the rules are provided for different size of consumers. In some cases, consumers do not have always access to the same rules and options for price negotiations. This has two effects. It leads to dissatisfaction amongst consumer types and groups, but also limits flexibility for distribution companies to market their services to a broader clientele. 2.37 A fifth regulatory challenge facing many countries is the need to coordinate electricity and gas market reform. Countries such as Brazil and Colombia require development and deepening of gas exploration and production to sustain the required thermo-electric capacity expansions, and be able to meet the increasing consumer demands. 85see World Energy Council (2001) 86Tenenbaum (1995) Chapter 2: Analysis of Key Barriers to Investments 47 2.38 Finally, rules and regulations should be broad and applicable to all players. Many examples provide though for case-by-case regulations tailored for specific regions (i.e. provinces in Argentina or states in Brazil), specific firms in specific markets (distributors in Lima or Sao Paulo), interference with purely administrative or labor issues, intrusion in concession contracts (Atlantic coast in Colombia), or reversal of policies agreed upon (tariff increase schedules, capacity charges, separate billings for ancilliary services, separate provision of public lighting amongst others). Private investors have seen their base assumptions been challenged by those intrusion and discriminatory applications of formerly foreseen or announced regulations. Political barriers 2.39 Political barriers to private investment in the electricity sector of the Latin American region take different flavors. Vested political interests can be linked to state- owned incumbents, protecting generous collective bargaining agreements within those SOE's, defending regional interests or bending rules forced by political pressures in the legislature. However, some of the political barriers are also linked to the perception by the public in general that privatization and liberalization has resulted in increased tariffs (often a necessary requirement of the reform process) or dominant market power by individual private players (see above). In addition, accusations of corruption in the divestiture processes themselves, has often hurt the liberalization efforts87. 2.40 In many countries local governments have been and continue to be reluctant to implement reforms and privatize enterprises (Argentina, Colombia, and Brazil). Often regional government use distribution companies as cash-cows for the regional budget, or use them for job-creation purposes. In Argentina, for example, where competitive markets were supposed to allow electricity supply at the federal and provincial level, 10 of 24 provinces did not follow the divestiture scheme, creating a dual market structure for the country as a whole. In many cases, provincial governments were reluctant to emulate the federal example maintaining local utilities as sources for economic rents and vehicles for political patronage88. This also applies in many other countries in the region. 2.41 Sector reform and privatization has often resulted in a sharp drop of sector employment, or the elimination of previous generous collective bargaining agreements. In Argentina, Bolivia, Brazil, Chile, amongst others, this has led to opposition by labor unions. Private investors have been required to either face long labor conflicts or they have had to pay out to be able to reduce employment figures to acceptable levels. Opposition to private investments and employment reduction continues to play an important role in reducing or eliminating private sector interest in the distribution companies89. 87Bouille, Dubrovsky, Maurer (2003) and Estache, Rodriguez (1996) 88Bouille, Dubrovsky, Maurer (2003) 89see Millan (2001) 48 Study on Investment and Private Sector Participation in Power Distribution in the Latin American and Caribbean Region 2.42 Tariff increases are often a needed element of sector reform. Even without privatization, tariff hikes would have been needed to make distribution companies viable. However, consumer groups and political opposition to sector reform have been able to oppose tariff increases and overhauling of the tariff system, often even against the backdrop of IMF programs. Even in more advanced reform countries such as Chile, political interference into regulatory decisions is a common aspect. Regulatory decisions are seldom isolated from political pressure and interests. 2.43 In some cases (i.e. Brazil, Colombia), the authorities have even allowed for customers to back out from what they saw as too costly contractual arrangements, effectively promoting breaching established obligations. In Venezuela, severe collection problems exist amongst regional utilities and state entities. In addition, electricity prices seem not driven by efficiency considerations, but politically controlled by the Government. Without tariffs that recognize costs and necessary returns, private investment will not be able to flow into the distribution sub-sector in the region. 2.44 Opposition to privatization and liberalization often is based on regional differences. For example, Bolivia was only able to privatize isolated sub-systems as political opposition grew harder in urban as opposes to rural areas90. In Brazil, regional politicians have been able to block privatization of regional distribution companies. In Panama, the creation of privatized regional distribution monopolies has responded to regional interest groups, but has limited competition and efficiency gains, leading to increased distribution losses. 2.45 In some countries sectoral reform has been blocked or delayed because of aspects relating to capacity expansion between hydropower and thermo-electric generation. This indirectly affects the distribution companies, either because it increases the costs or, more importantly, because it limits the possibility to meet future demand. In Brazil, for example, social issues and environmental opposition has limited the expansion of hydropower. In Colombia, political intervention in favor of large hydro-electric projects has made it unattractive for private investors to bet on the needed expansion of thermo- electric plants91. 2.46 Two common trades that directly affect private investors in distribution companies have to do with direct government action or inaction. In many countries government entities are the worst customers when it comes to paying electricity bills. Moreover, the authorities do not help distribution companies to collect the bills, by disallowing disconnecting overdue customers. In other cases (i.e. Colombia) Government bailouts of publicly owned discos, at least cast some doubt over the interest and sustainability of reform to attract private investment. 90Barbu and Luzuriaga (1999) 91Ayala, Millan (2002) Chapter 2: Analysis of Key Barriers to Investments 49 2.47 Finally, opposition to sector reform is often a political battlefield. Best example is Mexico where lifting a constitutional prohibition is needed to liberalize the sector and attract private investment. However for years now, a political deadlock has effectively stopped any constitutional change. In many countries awarding concessions or allowing private investment require approvals by Parliament, Congress or National Assembly, creating an uncertainty that limits private interest in participating in costly, lengthy and politically charged processes. Investor Survey 2.48 In 2002 the World Bank undertook a survey of private investors in the power sectors (see "What International Investors Look for When Investing in Developing Countries", Energy and Mining Sector Board Discussion Paper No. 6, May 2003). 67 international investors were surveyed, of which 48 completed a written questionnaire. 2.49 The answers reveal key messages to government when trying to attract and retain investment in the power sector, as well as the main concerns by the investment community. The key messages for governments are that investors are willing to go or stay in markets with good demand growth if (i) adequate cash flows in the sector are ensured, (ii) laws and contracts are stable and enforced, (iii) government interference is minimized, and (iv) responsiveness to the needs of investors are improved. The last point relates mainly to the issues involved in administering and preparing transactions (i.e. concessions or privatizations) in a timely fashion. 2.50 For Latin America, the investors responded to be most dissatisfied with Argentina and Colombia as host countries, while most satisfied with Chile and Mexico. The main concerns of private investors were legal and contractual frameworks that were unstable or difficult to enforce, and issues involving consumer payment discipline and enforcement. Independence of the regulatory entity was another prominent point. Many investors pointed out to the potential benefit of having credit enhancements or guarantees made available (see below for further discussion of this point). 2.51 With respect to the best experiences encountered, investors pointed largely to solid retail tariff schemes and collection discipline, ability to exercise effective management, government meeting established commitments, as well as ability to enforce laws and contracts. The worst experiences expressed by investors related to unresponsiveness to their needs and timeframes in transactions, insufficient retail tariff levels, not sustained commitments acquired through contracts or regulations, and arbitrary regulation processes. Conclusions 2.52 It is apparent that some basic fundamentals need to be revisited to attract and retain investors in the power sectors in Latin America. Foreign investors have been harmed due to macroeconomic instability and regulatory changes that have affected return expectations. While sectoral liberalization has advanced and sector reform has 50 Study on Investment and Private Sector Participation in Power Distribution in the Latin American and Caribbean Region gained momentum in most countries, investors will need reinforced security to believe that power markets will work in the region. 2.53 With respect to macroeconomic issues, mainly exchange rate risk, as well as regulatory compliance (meeting the required tariff levels), Government's in Latin America might need to think about some temporary credit enhancement mechanisms. Multilateral backing of exchange rate risk and regulatory commitments might be required to gain the trust back while the fundamental changes in economic structure and regulatory frameworks are sorted out. 2.54 In addition, there is a need to solidify the institutional basis. There is need for sole responsibility for political oversight, while regulation and supervision should be housed with truly independent government bodies. Incentives, both pecuniary and non- pecuniary are required to attract professionals with the needed credentials, experience and capabilities into the regulatory bodies. Also, there is an apparent need to revisit competition policies. The reform process would not be able to be sustained if single private investors are able to acquire unduly market power and vertical and horizontal re- integration takes place. 2.55 The role of state and government remains another major issue. Competing against large, omnipresent state-owned enterprises makes private investment unlikely. Also, the potential for regulatory discrimination deters private interest. 2.56 Price and tariff regulations need to be simple, clear and be maintained over a long time period. Also, retail tariffs need to reflect costs and allow for basic returns. While subsidy schemes are often necessary, especially in a longer transition period to sector reform, it is more likely that direct subsidies by the government (backed possibly by guarantees) provide confidence to investors, than complicated and difficult to administer cross-subsidy schemes. 2.57 Finally, challenges ahead rely with surmounting political opposition to sector reform. This needs a transparent process in the divestiture, as well as communicating the goals of private sector participation to the public in general. If majorities can be won for the process, vocal minorities with vested interests might not be able to stop the reform. The worst outcome, however, is for government's to promote non-compliance with contractual obligations to gain political support. This will inevitably result in private investors leaving the countries they sought of as possible recipients of new investment and enhanced management techniques. 3 Estimates of Investments in the Electricity Sector 3.1 After having presented in chapter 1 the role of private participation in the region, and having discussed the most important barriers to continued private investment in chapter 2, chapter 3 is aimed at projecting required investment needs over the next decade. To achieve that, three different set of figures will be presented. Two estimates based on own calculations as discussed in more detail below, as well as some regional investment projections by the World Energy Investment Outlook. 3.2 The estimates provided by own calculations are based on two different scenarios. One scenarios is based on past growth estimates and extrapolates to project future investments. A second scenario provides for calculations specifically for the distribution sector based on network expansion goals for the rural and urban sector. In addition, numbers for projected investments based on the latest World Energy Investment Outlook are also provided. 3.3 The first calculation as summarized in Table 3.1 is based on growth estimates. The base for the estimates is a 29 year median growth rate for consumption from 1972- 2001, which was equivalent to about 6.5% per annum. The cost for new capacity and the capacity utilization rate per country are derived from 2003 estimates. The share distribution corresponds to 60% generation, 30% distribution and 10% transmission as derived from the World Energy Investment Outlook and the study by Fay and Yepes (2003). This scenario can be called "business as usual", as it is based upon the historical data on electricity consumption and the most recent cost estimates. 51 52 Study on Investment and Private Sector Participation in Power Distribution in the Latin American and Caribbean Region Table 3.1: Projected Investments in the Electricity Sector in Latin America 2005- 2015 (in m US$) Country Generation Transmission Distribution Total Argentina 8070 1345 4035 13450 Bolivia 420 70 210 700 Brazil 55012 9169 27506 91687 Chile 5941 424 2970 9335 Colombia 4226 704 2113 7043 Costa Rica 6045 1007 3022 10074 Dominican Republic 1532 255 766 2553 Ecuador 1908 318 954 3180 El Salvador 611 102 306 1019 Guatemala 713 119 357 1189 Haití 67 11 33 111 Honduras 816 136 408 1360 Jamaica 1106 184 553 1843 México 27132 4522 13566 45220 Nicaragua 92 15 46 153 Panama 535 89 268 892 Paraguay 1990 332 995 3317 Peru 1732 289 866 2887 Uruguay 578 96 289 963 Venezuela 11342 1890 5671 18903 Total Region 129868 21077 64934 215879 (Own estimates based on past and projected demand growth scenarios) 3.4 Under this scenario, total investment in the region between 2005 and 2015 is estimated at around US 215 billion, of which close to US$65 billion corresponds to the distribution sector. This distribution investment estimate obtained through the top-down approach includes: (a) the necessary investment in augmentation due to the increased demand stemming from income and population growth, (b) the investment required to achieve universal coverage in urban areas and about 70% , and (c) maintenances and rehabilitation of the distributions system. Overall and not surprisingly, countries such as Brazil and Mexico will require investment of the order of US$90 billion for the first and US$45 billion for the second. Financing these investment needs will represent a big challenge. As examples, these figures equate to yearly investments of US$9 billion for Brazil and close to US$5 billion for Mexico. 3.5 To identify the investment required to achieve a significant progress in rural electrification only (i.e., 70% of households coverage) in all of the region's countries by 2015 and urban coverage to 100%, a bottom up approach was utilized. The costs per connection are based on 2003 estimates derived from current costs for both rural and urban electrification. The results of this scenario, which can be called "network extension and increased access", are reported in Table 3.2. Under these estimates total investment is over US$56 billion over the next decade, with US$11 billion related to new investment in rural connections and close to US$45 billion to overall, urban network Chapter 3: Estimates of Investments in the Electricity Sector 53 expansion. The difference between the first and the second should be interpreted as the distribution investments in maintenance and rehabilitation necessary to meet the increase in electricity demand for existing consumers. Table 3.2: Projected Investments to Increase Access in Latin America in the Distribution Sector 2005-2015 (in m US$) Country Number of Rural Number of Total Investment Need Investment Need Connections Connections Rural Network Connections Connections Argentina 713 10462 499 3139 Bolivia 489 2716 342 815 Brazil 3310 49755 2317 14927 Chile 250 4434 175 1330 Colombia 1390 12906 973 3872 Costa Rica 226 1172 158 352 Dominican Republic 524 2524 367 757 Ecuador 721 3830 504 1149 El Salvador 407 1951 285 585 Guatemala 1110 3974 777 1192 Haití 803 2532 562 760 Honduras 632 2230 443 669 Jamaica 192 720 134 216 México 3651 29531 2556 8859 Nicaragua 385 1762 269 529 Panama 193 865 135 259 Paraguay 371 1786 259 536 Peru 1001 7862 700 2358 Uruguay 28 894 20 268 Venezuela 437 7644 306 2293 Total Region 16833 149550 11781 44865 (Own estimates based on rural and urban network expansion) 3.6 The International Energy Agency foresees close to US$4 trillion in investment in the electricity sector over the next decade92. Of this total, around US$220 billion will be destined to the electricity sector in Latin America as per the reference scenario (see table 3.3) provided by decades in the World Energy Investment Outlook93. Around one third of that investment, around US$80 billion will be directed to the distribution sector. These figures are three times higher than those for the last three decades. The reasons for this substantial increase relates to the capital intensity if the investments, as well as to the 92 World Energy Investment Outlook, International Energy Agency (2004) 93 While the Outlook provides figures for the decades as 2001-2010, 2011-2020, and 2021-2030, approximations as per investment figures for the analyzed time frame of 2005-2015 can be provided based on that reference scenario 54 Study on Investment and Private Sector Participation in Power Distribution in the Latin American and Caribbean Region likely shift from primary fuels to electricity, with demand increases in the region to be on average around 5%. Table 3.3: Reference Scenario: Investment in Electricity in Latin America (billion US$) 2001-2010 2011-2020 2021-2030 2001-2030 Generation 86 111 120 317 Refurbishment 5 5 8 19 Transmission 32 41 55 128 Distribution 69 89 124 281 TOTAL 191 247 306 744 World Energy Investment Outlook, International Energy Agency (2004) 3.7 The analysis provided by the World Energy Investment Outlook further suggests that close to 2% of the GDP in Latin America will have to be spent in energy investment over the next two decades and that the share of energy investment in total domestic investment in the region will be close to 8%. 3.8 As can be seen from the used reference scenario, the investment figures from own calculations for the distribution sector (i.e. US$64 billion in the scenario based on demand growth and US$55 billion based on network expansion targets) are in a similar range as those provided based on growth, network expansion and maintenance costs by the IEA. In all cases, it becomes clear that to achieve any of the projected targets, private investment will have to reach levels very similar to those seen in the peak of private investment in the distribution, i.e., close to US$8-10 billion in 1997/1998 period . 3.9 Fiscal constraints in all countries in the region paired with limited debt capacity mean that private investment sources have to account for a substantial portion of this investment. Moreover, public utilities remaining in the public sector face substantial financial challenges, being unable to finance investments of this magnitude on their own. Low revenues, high production costs, and political interference have resulted in substantial liquidity and financial constraints. 3.10 While one potential source could be domestic savings, most of these savings in Latin America are now linked to individual, pension savings accounts. Most of these pension funds have either self-imposed or regulatory restrictions in terms of investing in what are believed to be riskier investments such as infrastructure projects. Projects in the electricity sector are viewed as including such risks as market, construction and operation risks, that together with regulatory, judicial and force majeure risks lead to ratings that are unlikely to meet the requirements of the more conservative domestic pension funds94. 94 While outside the scope of this analysis, it is important to mention that there are creative ways of managing and distributing the risks in the electricity sector. The World Bank's guarantee program provides interesting examples for risk guarantees in the distribution sector, with examples from Romania and Slovakia amongst others. Chapter 3: Estimates of Investments in the Electricity Sector 55 3.11 With domestic savings being an unlikely source to provide most of the needed funding for energy investment in general, and electricity investment in particular, there is clearly a need for external financing. With external debt, however representing close to 50% of GNP in Latin America, there is little room for increased debt financing. Therefore the needs for direct private investment, whether domestic or foreign is crucial. This however will require a perception of risk-return rewards that allows for such private investors to come back to the region. 3.12 There is no doubt that without large flows of private direct investment in the regional electricity sector in general, and in the distribution sector specifically, even the less ambitious targets will not be achieved. This will require substantial efforts to overcome the constraints mentioned in chapter 2 and provide the basis for a return to the levels of private investment seen in the middle of the 1990's as mentioned in chapter 1. 4 Proposed Detailed Country Analysis 4.1 The analysis provided so far requires much more detailed specific country studies that will define and propose an analytical framework for the identification of risks and risk mitigation mechanisms involved in the distribution business. The analysis will analyze the allocation of risks between different stakeholders (i.e. consumers, government, generation and distribution companies, the tax payer in general) and will include such risks as bill collection, service expansion commitments, supply obligations and demand growth, capital and operating cost assumptions, macroeconomic variables (i.e. inflation, foreign exchange risk), regulatory risks and political risks (including subsidy and tariff regime). 4.2 The purpose is to provide for the proposed countries (see below) a risk allocation matrix by analyzing market structures, legislative and regulatory frameworks and different types of concession agreements and/or contractual arrangements for private provision of electricity distribution services. Specific case studies within the proposed countries are aimed at looking at risk mitigation examples and financing mechanisms adopted by private investors. Such case studies will allow to analyze different experiences of public-private partnerships and propose a way forward based on the lessons learned, that will allow to propose mechanisms and structures that make more likely the investment required over the next decade in the regional distribution sector. 4.3 The criteria for proposing and selecting four specific countries for more detailed analysis are based on the following criteria: (i) current status with the electricity sector reform and market structure; (ii) degree of private sector investment; (iii) investment needs and network coverage; and (iv) reform sustainability and extent of some of the identified barriers (i.e. macroeconomic, legal, regulatory, political). The proposed countries below provide a wide range in terms of their abilities ad impediments to attract foreign investments, are diverse in size and investment needs, and have a likely approach to pursue an additional path of reform to revitalize private investment in the distribution sector. 4.4 The four countries proposed for detailed country analysis are as follows: (i) Argentina; (ii) Brazil; (iii) Colombia; and (iv) El Salvador. Argentina provides for an example of substantial private investment in the distribution sector with a widespread problem of trust and negative past experience. The country example provides for a rich 57 58 Study on Investment and Private Sector Participation in Power Distribution in the Latin American and Caribbean Region basis of experience and lessons learned from past failures and future requirements. Brazil provides an example with such a substantial need for future investment, that it imposes a challenge given its pure size. It is also an example of regulatory and market reform failures and repeated trial and errors. Colombia is an example that provides a different approach with profound reform and substantial private investment in the generation sector, but very little reform and private investment in the distribution sector. Moreover, it represents a case of repeated failures in attracting private investment to some of its public regional utilities. El Salvador will provide the example of a small country with large investment needs, but certainly more difficulties to attract private investment despite its investment grade rating. 4.5 Together the four proposed countries are representative of a) different stages in the reform process; b) differences in investment needs and size of future requirements; c) past experiences and contractual arrangements; d) extent and pervasiveness of some of the barriers analyzed in chapter 2; but e) are likely to pursue paths that will be looking at attracting and promoting private investment into their distribution sectors. Annex 1 Private Sector Investment in Latin America 59 60 Study on Investment and Private Sector Participation in Power Distribution in the Latin American and Caribbean Region Table A1.1: Divestitures in Electricity Distribution in Argentina, 1990 - 2002 Closure Subtype of % Total Sponsor Country Project Name Year PPI Private Investmt. Country Sponsor Edesur SA 1992 Full 100% 2,246 Argentina, Cia. Naviera Perez Companc, Divestiture Chile Enersis Edenor SA 1992 Full France, Electricite de France, Endesa Divestiture 100% 1,443 Spain (Spain) Empresa Distribuidora Partial Electrica Atlantica SA 1997 Divestiture 90% 495 Italy Camuzzi Gazometri SpA Empresa Distribuidora Full AES Corporation, Community Electrica Norte SA 1997 Divestiture 100% 420 US Energy Alternatives (CEA) Empresa Distribuidora de Electricidad de 1998 Partial 51% 281 France, Electricite de France, Medinvert Mendoza Divestiture Argentina Empresa de Jose Cartellone Construcciones Distribucion Electrica 1995 Partial 90% 190 Argentina Civiles SA, Compania General de de Tucuman SA Divestiture Electricidad, Compania Nacional Argentina de Fuerza Electrica Empresa de Distribucion de Full Electricidad de Entre 1996 Divestiture 100% 161 US PSEG Global Inc. Rios SA Empresa Distribuidora Full AES Corporation, Community Electrica Sur SA 1997 Divestiture 100% 145 US Energy Alternatives (CEA) Empresa de Energia de Full Argentina, Sociedad Austral de Electricidad Rio Negro SA 1996 Divestiture 100% 98 Italy (Saesa), Camuzzi Gazometri SpA Empresa Distribuidora de Electricidad La 1995 Full 100% 14 US GPU International Rioja Divestiture Empresa de Energia de Partial Argentina, Catamarca 1996 Divestiture 90% 12 Germany IATE SA, Siemens AG Empresa Distribuidora de Electricidad de San 1993 Management 100% - Spain Union Fenosa Luis contract Total 5,505 Source: PPI-Database (2004) Annex 1: Private Sector Investment in Latin America 61 Table A1.2: Divestitures in Electricity Distribution in Bolivia, 1990 - 2002 Closure Subtype % Total Sponsor Country Project Name Year of PPI Private Investmt. Country Sponsor Electricidad La Paz SA and Empresa de Luz y Full Iberdrola SA, Consortium of Fuerza Electrica de 1995 Divestiture100% 91 Spain investment funds Bolivia Oruro SA Empresa de Luz y Fuerza Electrica 1995 Partial 50% 50 US PP&L Global Inc. Cochabamba SA Divestiture Total 142 Source: PPI-Database (2004) 62 Study on Investment and Private Sector Participation in Power Distribution in the Latin American and Caribbean Region Table A1.3: Divestitures in Electricity Distribution in Brazil, 1990 - 2002 Closure Subtype % Total Sponsor Country Project Name Year of PPI Private Investmt. Country Sponsor Light Rio Servicos de Partial 92% 4,297 US, AES Corporation, Electricite de Electricidade SA 1996 Divestiture France France Eletropaulo Metropolitana de Light Rio Servicos de Eletricidade SA 1998 Partial 66% 3,169 Brazil, Electricidade SA, AES (Eletropaulo Divestiture US Corporation Metropolitana) Companhia de Electricidade do Estado 1997 Partial 61% 2,234 Brazil, Banco do Brasil, Iberdrola SA da Bahia (COELBA) Divestiture Spain Companhia NorteNordeste de Partial US, Community Energy Alternatives Distribuicao de Energia 1997 Divestiture 90% 1,651 Brazil (CEA), VBC Energia Eletrica Companhia Centro- Oeste de Distribuicao 1997 Partial 90% 1,529 US AES Corporation de Energia Eletrica Divestiture Elektro Eletricidade e Partial Servicos SA (Elektro) 1998 Divestiture 99% 1,514 US Enron Companhia Energetica Partial Spain, Brazil do Ceara (Coelce) 1998 Divestiture 59% 1,282 Chile Endesa (Spain), Enersis Companhia de Electricidade do Estado Partial Chile, Enersis, Chilectra, Electricidade de Rio de Janeiro SA 1996 Divestiture 78% 1,231 Chile, Portugal SA (CERJ) Portugal Empresa Bandeirante de Partial Portugal, Electricidade de Portugal SA, Energia (EBE) 1998 Divestiture 96% 1,186 Brazil Companhia Paulista de Forca e Luz (CPFL) Companhia de Energia Eletrica de Pernambuco 2000 Partial 79% 1,139 Spain, Iberdrola SA, Previ (CELPE) Divestiture Brazil Companhia Energetica do Rio Grande do Norte 1997 Partial 86% 754 Spain Iberdrola SA (Cosern) Divestiture Companhia Energetica Partial do Maranhao (CEMAR) 2000 Divestiture 85% 359 US PP&L Global Inc. Companhia Eletrica de Partial Borborema (CELB) 1999 Divestiture 75% 58 Brazil Cataguaz Leopoldina Companhia Piratininga Full Companhia Paulista de Forca e de Forca e Luz 2001 Divestiture 100% 26 Brazil Luz (CPFL) Total 20,427 Source: PPI-Database (2004) Annex 1: Private Sector Investment in Latin America 63 Table A1.4: Divestitures in Electricity Distribution in Colombia, 1990 - 2002 Closure Subtype % Total Sponsor Country Project Name Year of PPI Private Investmt. Country Sponsor Comercializadora y Chile, Distribuidora de 1997 Partial 48% 1,226 Chile, Enersis, Chilectra, Endesa (Spain) Energia SA Divestiture Spain Colombia Corelca Distribution 1998 Partial Divestiture 65% 558 Spain Union Fenosa Total 1,784 Source: PPI-Database (2004) Table A1.5: Divestitures in Electricity Distribution in the Dominican Republic, 1990 - 2002 Closure Subtype % Total Sponsor Country Project Name Year of PPI Private Investmt. Country Sponsor Dominican Empresa Distribuidora Partial Republic Electrica Este 1999 Divestiture 50% 109 US AES Corporation Source: PPI-Database (2004) Table A1.6: Divestitures in Electricity Distribution in El Salvador, 1990 - 2002 Closure Subtype % Total Sponsor Country Project Name Year of PPI Private Investmt. Country Sponsor Compania de Alumbrado Electrico de 1998 Partial 75% 236 US AES Corporation San Salvador (CAESS) Divestiture Distribuidora de Electricidad del Sur 1998 Partial 75% 180 US PP&L Global Inc. (DELSUR) Divestiture El Compania de Luz Partial AES Corporation, Energia Global Salvador Electrica de Santa Ana 1998 80% 119 US (CLESA) Divestiture Inc., De Sola Group Empresa Electrica de Partial Oriente (EEO) 1998 Divestiture 89% 61 US AES Corporation Distribuidora Electrica de Usulutan 1998 Full 100% 8 US, AES Corporation, Corporacion (DEUSEM) Divestiture Venezuela Electricidad de Caracas Total 604 Source: PPI-Database (2004) 64 Study on Investment and Private Sector Participation in Power Distribution in the Latin American and Caribbean Region Table A1.7: Divestitures in Electricity Distribution in Guatemala, 1990 - 2002 Closure Subtype % Total Sponsor Country Project Name Year of PPI Private Investmt. Country Sponsor Empresa de Spain, Iberdrola SA, Distribucion Electrica 1998 Partial 88% 520 Portugal, Electricidade de de Guatemala (EEGSA) Divestiture US Portugal SA, TECO Power Services Corp. Guatemala Empresa de Distribucion de Occidente & Empresa 1999 Partial 80% 101 Spain Union Fenosa de Distribucion de Divestiture Oriente Total 621 Source: PPI-Database (2004) Table A1.8: Divestitures in Electricity Distribution in Panama, 1990 - 2002 Closure Subtype % Total Sponsor Country Project Name Year of PPI Private Investmt. Country Sponsor EDE Metro Oeste and Partial Chiriqui 1998 Divestiture 51% 212 Spain Union Fenosa Panama Constellation Power Elektra Noreste, S.A. 1998 Partial US, Divestiture 51% 90 Panama Inc., Primer Banco de Ahorros, S.A. Total 302 Source: PPI-Database (2004) Annex 1: Private Sector Investment in Latin America 65 Table A1.9: Divestitures in Electricity Distribution in Peru, 1990 - 2002 Closure Subtype % Total Sponsor Country Project Name Year of PPI Private Investmt. Country Sponsor PSEG Global Inc., Sempra Energy Luz del Sur SA 1994 Full 100% 677 US, US, Divestiture others International, Latin American Energy and Electricity Fund Empresa de Chile, Distribucion Electrica 1994 Partial 64% 412 Chile, Enersis, Chilectra, Endesa (Spain) Lima Norte SA Divestiture Spain Electro Norte Medio 1998 Partial Divestiture 30% 68 Peru Jose Rodriguez Banda SA Empresa Regional de Servicio Publico de Partial Argentina, IATE SA, Tizon Constructora de Electricidad del Sur 1997 Divestiture 90% 51 Peru Caminos Medio SA Peru Electro Noroeste 1998 Partial Divestiture 30% 23 Peru Jose Rodriguez Banda SA Electro Norte 1998 Partial Divestiture 30% 22 Peru Jose Rodriguez Banda SA Empresa de Distribucion de Energia 1995 Partial 60% 10 Chile Endesa (Chile), Enersis, Chilectra de Chancay SA Divestiture Empresa de Distribucion Electrica 1996 Full 100% 9 Chile, Chilquinta, Ontario Hydro de Canete SA Divestiture Canada International Electro Centro 1998 Partial Divestiture 30% 1 Peru Jose Rodriguez Banda SA Total 1,273 Source: PPI-Database (2004) Table A1.10: Divestitures in Electricity Distribution in Venezuela, 1990 - 2002 Closure Subtype of Total Sponsor Country Project Name Year PPI % Private Investmt. Country Sponsor Compania Anonima Luz Venezuela y Fuerza Electricas de 1998 Partial 94% 10 US Enron Puerto Cabello Divestiture Source: PPI-Database (2004) Annex 2 Work Sheets for Calculation of Estimates for Projected Investments 67 68 Study on Investment and Private Sector Participation in Power Distribution in the Latin American and Caribbean Region Argentina Consumption Growth Based Estimate ("Business as Usual")* Coverage Gap Based Estimate (According to Below Targets for Overall/Rural Access)* 2005- Total Number of Network Connections 2005- Investment Need Power Sector 2010 Estimate $m 5,959 Needed 2010 Estimate 1000s 9,819 2005- Total Number of Network Connections 2005- Investment Need Power Sector 2015 Estimate $m 13,450 Needed 2015 Estimate 1000s 10,462 Investment Need Power 2005- 2005- Generation 2010 Estimate $m 3,575 Total Investment Need Network Extension 2010 Estimate $m 2,946 Investment Need Power 2005- 2005- Generation 2015 Estimate $m 8,070 Total Investment Need Network Extension 2015 Estimate $m 3,139 Investment Need Power 2005- Number of Rural Network Connections 2005- Transport 2010 Estimate $m 596 Needed 2010 Estimate 1000s 439 Investment Need Power 2005- Number of Rural Network Connections 2005- Transport 2015 Estimate $m 1,345 Needed 2015 Estimate 1000s 713 Investment Need Power 2005- 2005- Distribution 2010 Estimate $m 1,788 Investment Need Rural Network Extension 2010 Estimate $m 308 Investment Need Power 2005- 2005- Distribution 2015 Estimate $m 4,035 Investment Need Rural Network Extension 2015 Estimate $m 499 (*) As upfront payment (no (*) As upfront payment (no discounted discounted cash flow cash flow considerations). considerations). Assumptions Assumptions Cost per Connection (overall) 2003 Estimate $ 300 Cost per Rural Connection 2003 Estimate $ 700 1972- Base for Growth Rate Estimate 2001 Median years 29 Average Size of Household (overall) 2003 Estimate persons 4.0 Per-kWh-Cost of New Capacity 2003 Estimate $ 1,900 Average Size of Household (rural) 2003 Estimate persons 5.0 Capacity Utilization 2003 Estimate h.p.a. 7,500 Overall Electrification 2010 Target/Estimate % 98% Generation Investment Share 2003 Estimate % 60% Overall Electrification 2015 Target/Estimate % 100% Transmission Investment Share 2003 Estimate % 10% Rural Electrification 2010 Target/Estimate % 50% Distribution Investment Share 2003 Estimate % 30% Rural Electrification 2015 Target/Estimate % 70% Annex 2: Work Sheets for Calculation of Estimates for Projected Investments 69 Bolivia Consumption Growth Based Estimate ("Business as Usual")* Coverage Gap Based Estimate (According to Below Targets for Overall/Rural Access)* 2005- 2005- Investment Need Power Sector 2010 Estimate $m 306 Total Number of Network Connections Needed 2010 Estimate 1000s 2,420 2005- 2005- Investment Need Power Sector 2015 Estimate $m 699 Total Number of Network Connections Needed 2015 Estimate 1000s 2,716 2005- 2005- Investment Need Power Generation 2010 Estimate $m 184 Total Investment Need Network Extension 2010 Estimate $m 726 2005- 2005- Investment Need Power Generation 2015 Estimate $m 420 Total Investment Need Network Extension 2015 Estimate $m 815 2005- 2005- Investment Need Power Transport 2010 Estimate $m 31 Number of Rural Network Connections Needed 2010 Estimate 1000s 339 2005- 2005- Investment Need Power Transport 2015 Estimate $m 70 Number of Rural Network Connections Needed 2015 Estimate 1000s 489 Investment Need Power 2005- 2005- Distribution 2010 Estimate $m 92 Investment Need Rural Network Extension 2010 Estimate $m 237 Investment Need Power 2005- 2005- Distribution 2015 Estimate $m 210 Investment Need Rural Network Extension 2015 Estimate $m 342 (*) As upfront payment (no (*) As upfront payment (no discounted cash low discounted cash flow considerations). considerations). Assumptions Assumptions Cost per Connection (overall) 2003 Estimate $ 300 Cost per Rural Connection 2003 Estimate $ 700 1972- Base for Growth Rate Estimate 2001 Median years 29 Average Size of Household (overall) 2003 Estimate persons 4.0 Per-kWh-Cost of New Capacity 2003 Estimate $ 1,900 Average Size of Household (rural) 2003 Estimate persons 5.0 Capacity Utilization 2003 Estimate h.p.a. 7,500 Overall Electrification 2010 Target/Estimate % 98% Generation Investment Share 2003 Estimate % 60% Overall Electrification 2015 Target/Estimate % 100% Transmission Investment Share 2003 Estimate % 10% Rural Electrification 2010 Target/Estimate % 50% Distribution Investment Share 2003 Estimate % 30% Rural Electrification 2015 Target/Estimate % 70% 70 Study on Investment and Private Sector Participation in Power Distribution in the Latin American and Caribbean Region Brazil Consumption Growth Based Estimate ("Business as Usual")* Coverage Gap Based Estimate (According to Below Targets for Overall/Rural Access)* 2005- 2005- Investment Need Power Sector 2010 Estimate $m 38,357 Total Number of Network Connections Needed 2010 Estimate 1000s 45,931 2005- 2005- Investment Need Power Sector 2015 Estimate $m 91,687 Total Number of Network Connections Needed 2015 Estimate 1000s 49,755 Investment Need Power 2005- 2005- Generation 2010 Estimate $m 23,014 Total Investment Need Network Extension 2010 Estimate $m 13,779 Investment Need Power 2005- 2005- Generation 2015 Estimate $m 55,012 Total Investment Need Network Extension 2015 Estimate $m 14,927 Investment Need Power 2005- 2005- Transport 2010 Estimate $m 3,836 Number of Rural Network Connections Needed 2010 Estimate 1000s 2,664 Investment Need Power 2005- 2005- Transport 2015 Estimate $m 9,169 Number of Rural Network Connections Needed 2015 Estimate 1000s 3,310 Investment Need Power 2005- 2005- Distribution 2010 Estimate $m 11,507 Investment Need Rural Network Extension 2010 Estimate $m 1,864 Investment Need Power 2005- 2005- Distribution 2015 Estimate $m 27,506 Investment Need Rural Network Extension 2015 Estimate $m 2,317 (*) As upfront payment (no (*) As upfront payment (no discounted cash discounted cash flow flow considerations). considerations). Assumptions Assumptions Cost per Connection (overall) 2003 Estimate $ 300 Cost per Rural Connection 2003 Estimate $ 700 1972- Base for Growth Rate Estimate 2001 Median years 29 Average Size of Household (overall) 2003 Estimate persons 4.0 Per-kWh-Cost of New Capacity 2003 Estimate $ 1,900 Average Size of Household (rural) 2003 Estimate persons 5.0 Capacity Utilization 2003 Estimate h.p.a. 7,500 Overall Electrification 2010 Target/Estimate % 98% Generation Investment Share 2003 Estimate % 60% Overall Electrification 2015 Target/Estimate % 100% Transmission Investment Share 2003 Estimate % 10% Rural Electrification 2010 Target/Estimate % 50% Distribution Investment Share 2003 Estimate % 30% Rural Electrification 2015 Target/Estimate % 70% Annex 2: Work Sheets for Calculation of Estimates for Projected Investments 71 Chile Consumption Growth Based Estimate ("Business as Usual")* Coverage Gap Based Estimate (According to Below Targets for Overall/Rural Access)* Investment Need Power Total Number of Network Connections 2005- Sector 2005-2010 Estimate $m 4,237 Needed 2010 Estimate 1000s 4,098 Investment Need Power Total Number of Network Connections 2005- Sector 2005-2015 Estimate $m 9,902 Needed 2015 Estimate 1000s 4,434 Investment Need Power 2005- Generation 2005-2010 Estimate $m 2,542 Total Investment Need Network Extension 2010 Estimate $m 1,229 Investment Need Power 2005- Generation 2005-2015 Estimate $m 5,941 Total Investment Need Network Extension 2015 Estimate $m 1,330 Investment Need Power Number of Rural Network Connections 2005- Transport 2005-2010 Estimate $m 424 Needed 2010 Estimate 1000s 192 Investment Need Power Number of Rural Network Connections 2005- Transport 2005-2015 Estimate $m 990 Needed 2015 Estimate 1000s 250 Investment Need Power 2005- Distribution 2005-2010 Estimate $m 1,271 Investment Need Rural Network Extension 2010 Estimate $m 134 Investment Need Power 2005- Distribution 2005-2015 Estimate $m 2,970 Investment Need Rural Network Extension 2015 Estimate $m 175 (*) As upfront payment (no (*) As upfront payment (no discounted cash discounted cash flow flow considerations). considerations). Assumptions Assumptions Cost per Connection (overall) 2003 Estimate $ 300 Cost per Rural Connection 2003 Estimate $ 700 Base for Growth Rate Estimate 1972-2001 Median years 29 Average Size of Household (overall) 2003 Estimate persons 4.0 Per-kWh-Cost of New Capacity 2003 Estimate $ 1,900 Average Size of Household (rural) 2003 Estimate persons 5.0 Capacity Utilization 2003 Estimate h.p.a. 7,500 Overall Electrification 2010 Target/Estimate % 98% Generation Investment Share 2003 Estimate % 60% Overall Electrification 2015 Target/Estimate % 100% Transmission Investment Share 2003 Estimate % 10% Rural Electrification 2010 Target/Estimate % 50% Distribution Investment Share 2003 Estimate % 30% Rural Electrification 2015 Target/Estimate % 70% 72 Study on Investment and Private Sector Participation in Power Distribution in the Latin American and Caribbean Region Colombia Consumption Growth Based Estimate ("Business as Usual")* Coverage Gap Based Estimate (According to Below Targets for Overall/Rural Access)* 2005- Total Number of Network Connections Investment Need Power Sector 2010 Estimate $m 3,085 Needed 2005-2010 Estimate 1000s 11,730 2005- Total Number of Network Connections Investment Need Power Sector 2015 Estimate $m 7,043 Needed 2005-2015 Estimate 1000s 12,906 Investment Need Power 2005- Total Investment Need Network Generation 2010 Estimate $m 1,851 Extension 2005-2010 Estimate $m 3,519 Investment Need Power 2005- Total Investment Need Network Generation 2015 Estimate $m 4,226 Extension 2005-2015 Estimate $m 3,872 2005- Number of Rural Network Investment Need Power Transport 2010 Estimate $m 308 Connections Needed 2005-2010 Estimate 1000s 1,020 2005- Number of Rural Network Investment Need Power Transport 2015 Estimate $m 704 Connections Needed 2005-2015 Estimate 1000s 1,390 Investment Need Power 2005- Investment Need Rural Network Distribution 2010 Estimate $m 925 Extension 2005-2010 Estimate $m 714 Investment Need Power 2005- Investment Need Rural Network Distribution 2015 Estimate $m 2,113 Extension 2005-2015 Estimate $m 973 (*) As upfront payment (no ( *) As upfront payment (no discounted cash flow considerations). discounted cash flow considerations). Assumptions Assumptions Cost per Connection (overall) 2003 Estimate $ 300 Cost per Rural Connection 2003 Estimate $ 700 1972- Base for Growth Rate Estimate 2001 Median years 29 Average Size of Household (overall) 2003 Estimate persons 4.0 Per-kWh-Cost of New Capacity 2003 Estimate $ 1,900 Average Size of Household (rural) 2003 Estimate persons 5.0 Capacity Utilization 2003 Estimate h.p.a. 7,500 Overall Electrification 2010 Target/Estimate % 98% Generation Investment Share 2003 Estimate % 60% Overall Electrification 2015 Target/Estimate % 100% Transmission Investment Share 2003 Estimate % 10% Rural Electrification 2010 Target/Estimate % 50% Distribution Investment Share 2003 Estimate % 30% Rural Electrification 2015 Target/Estimate % 70% Annex 2: Work Sheets for Calculation of Estimates for Projected Investments 73 Costa Rica Consumption Growth Based Coverage Gap Based Estimate (According to Below Targets for Overall/Rural Estimate ("Business as Usual")* Access)* 2005- Total Number of Network Connections 2005- Investment Need Power Sector 2010 Estimate $m 4,250 Needed 2010 Estimate 1000s 1,062 2005- Total Number of Network Connections 2005- Investment Need Power Sector 2015 Estimate $m 10,075 Needed 2015 Estimate 1000s 1,172 2005- Total Investment Need Network 2005- Investment Need Power Generation 2010 Estimate $m 2,550 Extension 2010 Estimate $m 318 2005- Total Investment Need Network 2005- Investment Need Power Generation 2015 Estimate $m 6,045 Extension 2015 Estimate $m 352 2005- Number of Rural Network Connections 2005- Investment Need Power Transport 2010 Estimate $m 425 Needed 2010 Estimate 1000s 159 2005- Number of Rural Network Connections 2005- Investment Need Power Transport 2015 Estimate $m 1,007 Needed 2015 Estimate 1000s 226 2005- Investment Need Rural Network 2005- Investment Need Power Distribution 2010 Estimate $m 1,275 Extension 2010 Estimate $m 112 2005- Investment Need Rural Network 2005- Investment Need Power Distribution 2015 Estimate $m 3,022 Extension 2015 Estimate $m 158 (*) As upfront payment (no discounted cash flow considerations). (*) As upfront payment (no discounted cash flow considerations). Assumptions Assumptions Cost per Connection (overall) 2003 Estimate $ 300 Cost per Rural Connection 2003 Estimate $ 700 1972- Base for Growth Rate Estimate 2001 Median years 29 Average Size of Household (overall) 2003 Estimate persons 4.0 Per-kWh-Cost of New Capacity 2003 Estimate $ 1,900 Average Size of Household (rural) 2003 Estimate persons 5.0 Capacity Utilization 2003 Estimate h.p.a. 7,500 Overall Electrification 2010 Target/Estimate % 98% Generation Investment Share 2003 Estimate % 60% Overall Electrification 2015 Target/Estimate % 100% Transmission Investment Share 2003 Estimate % 10% Rural Electrification 2010 Target/Estimate % 50% Distribution Investment Share 2003 Estimate % 30% Rural Electrification 2015 Target/Estimate % 70% 74 Study on Investment and Private Sector Participation in Power Distribution in the Latin American and Caribbean Region Dominican Republic Consumption Growth Based Estimate ("Business as Usual")* Coverage Gap Based Estimate (According to Below Targets for Overall/Rural Access)* 2005- Total Number of Network Connections 2005- Investment Need Power Sector 2010 Estimate $m 1,046 Needed 2010 Estimate 1000s 2,301 2005- Total Number of Network Connections 2005- Investment Need Power Sector 2015 Estimate $m 2,553 Needed 2015 Estimate 1000s 2,524 2005- 2005- Investment Need Power Generation 2010 Estimate $m 627 Total Investment Need Network Extension 2010 Estimate $m 690 2005- 2005- Investment Need Power Generation 2015 Estimate $m 1,532 Total Investment Need Network Extension 2015 Estimate $m 757 2005- Number of Rural Network Connections 2005- Investment Need Power Transport 2010 Estimate $m 105 Needed 2010 Estimate 1000s 365 2005- Number of Rural Network Connections 2005- Investment Need Power Transport 2015 Estimate $m 255 Needed 2015 Estimate 1000s 524 2005- 2005- Investment Need Power Distribution 2010 Estimate $m 314 Investment Need Rural Network Extension 2010 Estimate $m 255 2005- 2005- Investment Need Power Distribution 2015 Estimate $m 766 Investment Need Rural Network Extension 2015 Estimate $m 367 (*) As upfront payment (no discounted (*) As upfront payment (no discounted cash flow considerations). cash flow considerations). Assumptions Assumptions Cost per Connection (overall) 2003 Estimate $ 300 Cost per Rural Connection 2003 Estimate $ 700 1972- Base for Growth Rate Estimate 2001 Median years 29 Average Size of Household (overall) 2003 Estimate persons 4.0 Per-kWh-Cost of New Capacity 2003 Estimate $ 1,900 Average Size of Household (rural) 2003 Estimate persons 5.0 Capacity Utilization 2003 Estimate h.p.a. 7,500 Overall Electrification 2010 Target/Estimate % 98% Generation Investment Share 2003 Estimate % 60% Overall Electrification 2015 Target/Estimate % 100% Transmission Investment Share 2003 Estimate % 10% Rural Electrification 2010 Target/Estimate % 50% Distribution Investment Share 2003 Estimate % 30% Rural Electrification 2015 Target/Estimate % 70% Annex 2: Work Sheets for Calculation of Estimates for Projected Investments 75 Ecuador Consumption Growth Based Estimate ("Business as Usual")* Coverage Gap Based Estimate (According to Below Targets for Overall/Rural Access)* 2005- Total Number of Network Connections 2005- Investment Need Power Sector 2010 Estimate $m 1,288 Needed 2010 Estimate 1000s 3,461 2005- Total Number of Network Connections 2005- Investment Need Power Sector 2015 Estimate $m 3,180 Needed 2015 Estimate 1000s 3,830 2005- 2005- Investment Need Power Generation 2010 Estimate $m 773 Total Investment Need Network Extension 2010 Estimate $m 1,038 2005- 2005- Investment Need Power Generation 2015 Estimate $m 1,908 Total Investment Need Network Extension 2015 Estimate $m 1,149 2005- Number of Rural Network Connections 2005- Investment Need Power Transport 2010 Estimate $m 129 Needed 2010 Estimate 1000s 506 2005- Number of Rural Network Connections 2005- Investment Need Power Transport 2015 Estimate $m 318 Needed 2015 Estimate 1000s 721 2005- 2005- Investment Need Power Distribution 2010 Estimate $m 386 Investment Need Rural Network Extension 2010 Estimate $m 354 2005- 2005- Investment Need Power Distribution 2015 Estimate $m 954 Investment Need Rural Network Extension 2015 Estimate $m 504 (*) As upfront payment (no discounted (*) As upfront payment (no discounted cash flow considerations). cash flow considerations). Assumptions Assumptions Cost per Connection (overall) 2003 Estimate $ 300 Cost per Rural Connection 2003 Estimate $ 700 1972- Base for Growth Rate Estimate 2001 Median years 29 Average Size of Household (overall) 2003 Estimate persons 4.0 Per-kWh-Cost of New Capacity 2003 Estimate $ 1,900 Average Size of Household (rural) 2003 Estimate persons 5.0 Capacity Utilization 2003 Estimate h.p.a. 7,500 Overall Electrification 2010 Target/Estimate % 98% Generation Investment Share 2003 Estimate % 60% Overall Electrification 2015 Target/Estimate % 100% Transmission Investment Share 2003 Estimate % 10% Rural Electrification 2010 Target/Estimate % 50% Distribution Investment Share 2003 Estimate % 30% Rural Electrification 2015 Target/Estimate % 70% 76 Study on Investment and Private Sector Participation in Power Distribution in the Latin American and Caribbean Region El Salvador Consumption Growth Based Estimate Coverage Gap Based Estimate (According to Below Targets for Overall/Rural ("Business as Usual")* Access)* 2005- Total Number of Network Connections 2005- Investment Need Power Sector 2010 Estimate $m 432 Needed 2010 Estimate 1000s 1,749 2005- Total Number of Network Connections 2005- Investment Need Power Sector 2015 Estimate $m 1,018 Needed 2015 Estimate 1000s 1,951 2005- Total Investment Need Network 2005- Investment Need Power Generation 2010 Estimate $m 259 Extension 2010 Estimate $m 525 2005- Total Investment Need Network Investment Need Power Generation 2015 Estimate $m 611 Extension 2005-2015 Estimate $m 585 2005- Number of Rural Network Connections 2005- Investment Need Power Transport 2010 Estimate $m 43 Needed 2010 Estimate 1000s 278 2005- Number of Rural Network Connections 2005- Investment Need Power Transport 2015 Estimate $m 102 Needed 2015 Estimate 1000s 407 2005- Investment Need Rural Network 2005- Investment Need Power Distribution 2010 Estimate $m 130 Extension 2010 Estimate $m 194 2005- Investment Need Rural Network 2005- Investment Need Power Distribution 2015 Estimate $m 306 Extension 2015 Estimate $m 285 (*) As upfront payment (no discounted cash flow considerations). (*) As upfront payment (no discounted cash flow considerations). Assumptions Assumptions Cost per Connection (overall) 2003 Estimate $ 300 Cost per Rural Connection 2003 Estimate $ 700 1972- Base for Growth Rate Estimate 2001 Median years 29 Average Size of Household (overall) 2003 Estimate persons 4.0 Per-kWh-Cost of New Capacity 2003 Estimate $ 1,900 Average Size of Household (rural) 2003 Estimate persons 5.0 Capacity Utilization 2003 Estimate h.p.a. 7,500 Overall Electrification 2010 Target/Estimate % 98% Generation Investment Share 2003 Estimate % 60% Overall Electrification 2015 Target/Estimate % 100% Transmission Investment Share 2003 Estimate % 10% Rural Electrification 2010 Target/Estimate % 50% Distribution Investment Share 2003 Estimate % 30% Rural Electrification 2015 Target/Estimate % 70% Annex 2: Work Sheets for Calculation of Estimates for Projected Investments 77 Guatemala Consumption Growth Based Coverage Gap Based Estimate (According to Below Targets for Overall/Rural Estimate ("Business as Usual")* Access)* 2005- Total Number of Network Connections 2005- Investment Need Power Sector 2010 Estimate $m 502 Needed 2010 Estimate 1000s 3,427 2005- Total Number of Network Connections 2005- Investment Need Power Sector 2015 Estimate $m 1,188 Needed 2015 Estimate 1000s 3,974 2005- 2005- Investment Need Power Generation 2010 Estimate $m 301 Total Investment Need Network Extension 2010 Estimate $m 1,028 2005- 2005- Investment Need Power Generation 2015 Estimate $m 713 Total Investment Need Network Extension 2015 Estimate $m 1,192 2005- Number of Rural Network Connections 2005- Investment Need Power Transport 2010 Estimate $m 50 Needed 2010 Estimate 1000s 724 2005- Number of Rural Network Connections 2005- Investment Need Power Transport 2015 Estimate $m 119 Needed 2015 Estimate 1000s 1,110 2005- 2005- Investment Need Power Distribution 2010 Estimate $m 151 Investment Need Rural Network Extension 2010 Estimate $m 507 2005- 2005- Investment Need Power Distribution 2015 Estimate $m 357 Investment Need Rural Network Extension 2015 Estimate $m 777 (*) As upfront payment (no (*) As upfront payment (no discounted discounted cash flow considerations). cash flow considerations). Assumptions Assumptions Cost per Connection (overall) 2003 Estimate $ 300 Cost per Rural Connection 2003 Estimate $ 700 1972- Base for Growth Rate Estimate 2001 Median years 29 Average Size of Household (overall) 2003 Estimate persons 4.0 Per-kWh-Cost of New Capacity 2003 Estimate $ 1,900 Average Size of Household (rural) 2003 Estimate persons 5.0 Capacity Utilization 2003 Estimate h.p.a. 7,500 Overall Electrification 2010 Target/Estimate % 98% Generation Investment Share 2003 Estimate % 60% Overall Electrification 2015 Target/Estimate % 100% Transmission Investment Share 2003 Estimate % 10% Rural Electrification 2010 Target/Estimate % 50% Distribution Investment Share 2003 Estimate % 30% Rural Electrification 2015 Target/Estimate % 70% 78 Study on Investment and Private Sector Participation in Power Distribution in the Latin American and Caribbean Region Haiti Consumption Growth Based Coverage Gap Based Estimate (According to Below Targets for Overall/Rural Estimate ("Business as Usual")* Access)* 2005- Total Number of Network Connections 2005- Investment Need Power Sector 2010 Estimate $m 45 Needed 2010 Estimate 1000s 2,265 2005- Total Number of Network Connections 2005- Investment Need Power Sector 2015 Estimate $m 111 Needed 2015 Estimate 1000s 2,532 2005- Total Investment Need Network 2005- Investment Need Power Generation 2010 Estimate $m 27 Extension 2010 Estimate $m 680 2005- Total Investment Need Network 2005- Investment Need Power Generation 2015 Estimate $m 67 Extension 2015 Estimate $m 760 2005- Number of Rural Network Connections 2005- Investment Need Power Transport 2010 Estimate $m 5 Needed 2010 Estimate 1000s 550 2005- Number of Rural Network Connections 2005- Investment Need Power Transport 2015 Estimate $m 11 Needed 2015 Estimate 1000s 803 2005- Investment Need Rural Network 2005- Investment Need Power Distribution 2010 Estimate $m 14 Extension 2010 Estimate $m 385 2005- Investment Need Rural Network 2005- Investment Need Power Distribution 2015 Estimate $m 33 Extension 2015 Estimate $m 562 (*) As upfront payment (no discounted cash flow considerations). (*) As upfront payment (no discounted cash flow considerations). Assumptions Assumptions Cost per Connection (overall) 2003 Estimate $ 300 Cost per Rural Connection 2003 Estimate $ 700 1972- Base for Growth Rate Estimate 2001 Median years 29 Average Size of Household (overall) 2003 Estimate persons 4.0 Per-kWh-Cost of New Capacity 2003 Estimate $ 1,900 Average Size of Household (rural) 2003 Estimate persons 5.0 Capacity Utilization 2003 Estimate h.p.a. 7,500 Overall Electrification 2010 Target/Estimate % 98% Generation Investment Share 2003 Estimate % 60% Overall Electrification 2015 Target/Estimate % 100% Transmission Investment Share 2003 Estimate % 10% Rural Electrification 2010 Target/Estimate % 50% Distribution Investment Share 2003 Estimate % 30% Rural Electrification 2015 Target/Estimate % 70% Annex 2: Work Sheets for Calculation of Estimates for Projected Investments 79 Honduras Consumption Growth Based Estimate Coverage Gap Based Estimate (According to Below Targets for Overall/Rural ("Business as Usual")* Access)* 2005- Total Number of Network 2005- Investment Need Power Sector 2010 Estimate $m 550 Connections Needed 2010 Estimate 1000s 1,932 2005- Total Number of Network 2005- Investment Need Power Sector 2015 Estimate $m 1,360 Connections Needed 2015 Estimate 1000s 2,230 2005- Total Investment Need Network 2005- Investment Need Power Generation 2010 Estimate $m 330 Extension 2010 Estimate $m 580 2005- Total Investment Need Network 2005- Investment Need Power Generation 2015 Estimate $m 816 Extension 2015 Estimate $m 669 2005- Number of Rural Network 2005- Investment Need Power Transport 2010 Estimate $m 55 Connections Needed 2010 Estimate 1000s 414 2005- Number of Rural Network 2005- Investment Need Power Transport 2015 Estimate $m 136 Connections Needed 2015 Estimate 1000s 632 2005- Investment Need Rural Network 2005- Investment Need Power Distribution 2010 Estimate $m 165 Extension 2010 Estimate $m 290 2005- Investment Need Rural Network 2005- Investment Need Power Distribution 2015 Estimate $m 408 Extension 2015 Estimate $m 443 (*) As upfront payment (no discounted cash flow considerations). (*) As upfront payment (no discounted cash flow considerations). Assumptions Assumptions Cost per Connection (overall) 2003 Estimate $ 300 Cost per Rural Connection 2003 Estimate $ 700 1972- Base for Growth Rate Estimate 2001 Median years 29 Average Size of Household (overall) 2003 Estimate persons 4.0 Per-kWh-Cost of New Capacity 2003 Estimate $ 1,900 Average Size of Household (rural) 2003 Estimate persons 5.0 Capacity Utilization 2003 Estimate h.p.a. 7,500 Overall Electrification 2010 Target/Estimate % 98% Generation Investment Share 2003 Estimate % 60% Overall Electrification 2015 Target/Estimate % 100% Transmission Investment Share 2003 Estimate % 10% Rural Electrification 2010 Target/Estimate % 50% Distribution Investment Share 2003 Estimate % 30% Rural Electrification 2015 Target/Estimate % 70% 80 Study on Investment and Private Sector Participation in Power Distribution in the Latin American and Caribbean Region Jamaica Consumption Growth Based Estimate ("Business as Usual")* Coverage Gap Based Estimate (According to Below Targets for Overall/Rural Access)* 2005- Total Number of Network Investment Need Power Sector 2010 Estimate $m 772 Connections Needed 2005-2010 Estimate 1000s 676 2005- Total Number of Network Investment Need Power Sector 2015 Estimate $m 1,843 Connections Needed 2005-2015 Estimate 1000s 720 2005- Total Investment Need Investment Need Power Generation 2010 Estimate $m 463 Network Extension 2005-2010 Estimate $m 203 2005- Total Investment Need Investment Need Power Generation 2015 Estimate $m 1,106 Network Extension 2005-2015 Estimate $m 216 2005- Number of Rural Network Investment Need Power Transport 2010 Estimate $m 77 Connections Needed 2005-2010 Estimate 1000s 132 2005- Number of Rural Network Investment Need Power Transport 2015 Estimate $m 184 Connections Needed 2005-2015 Estimate 1000s 192 2005- Investment Need Rural Investment Need Power Distribution 2010 Estimate $m 232 Network Extension 2005-2010 Estimate $m 92 2005- Investment Need Rural Investment Need Power Distribution 2015 Estimate $m 553 Network Extension 2005-2015 Estimate $m 134 (*) As upfront payment (no discounted cash flow considerations). (*) As upfront payment (no discounted cash flow considerations). Assumptions Assumptions Cost per Connection (overall) 2003 Estimate $ 300 Cost per Rural Connection 2003 Estimate $ 700 1972- Average Size of Household Base for Growth Rate Estimate 2001 Median years 29 (overall) 2003 Estimate persons 4.0 Average Size of Household Per-kWh-Cost of New Capacity 2003 Estimate $ 1,900 (rural) 2003 Estimate persons 5.0 Capacity Utilization 2003 Estimate h.p.a. 7,500 Overall Electrification 2010 Target/Estimate % 98% Generation Investment Share 2003 Estimate % 60% Overall Electrification 2015 Target/Estimate % 100% Transmission Investment Share 2003 Estimate % 10% Rural Electrification 2010 Target/Estimate % 50% Distribution Investment Share 2003 Estimate % 30% Rural Electrification 2015 Target/Estimate % 70% Annex 2: Work Sheets for Calculation of Estimates for Projected Investments 81 Mexico Consumption Growth Based Estimate ("Business as Usual")* Coverage Gap Based Estimate (According to Below Targets for Overall/Rural Access)* 2005- Total Number of Network Connections 2005- Investment Need Power Sector 2010 Estimate $m 19,149 Needed 2010 Estimate 1000s 26,931 2005- Total Number of Network Connections 2005- Investment Need Power Sector 2015 Estimate $m 45,221 Needed 2015 Estimate 1000s 29,531 2005- 2005- Investment Need Power Generation 2010 Estimate $m 11,489 Total Investment Need Network Extension 2010 Estimate $m 8,079 2005- 2005- Investment Need Power Generation 2015 Estimate $m 27,132 Total Investment Need Network Extension 2015 Estimate $m 8,859 2005- Number of Rural Network Connections 2005- Investment Need Power Transport 2010 Estimate $m 1,915 Needed 2010 Estimate 1000s 2,557 2005- Number of Rural Network Connections 2005- Investment Need Power Transport 2015 Estimate $m 4,522 Needed 2015 Estimate 1000s 3,651 2005- 2005- Investment Need Power Distribution 2010 Estimate $m 5,745 Investment Need Rural Network Extension 2010 Estimate $m 1,790 2005- 2005- Investment Need Power Distribution 2015 Estimate $m 13,566 Investment Need Rural Network Extension 2015 Estimate $m 2,556 (*) As upfront payment (no discounted (*) As upfront payment (no discounted cash cash flow considerations). flow considerations). Assumptions Assumptions Cost per Connection (overall) 2003 Estimate $ 300 Cost per Rural Connection 2003 Estimate $ 700 1972- Base for Growth Rate Estimate 2001 Median years 29 Average Size of Household (overall) 2003 Estimate persons 4.0 Per-kWh-Cost of New Capacity 2003 Estimate $ 1,900 Average Size of Household (rural) 2003 Estimate persons 5.0 Capacity Utilization 2003 Estimate h.p.a. 7,500 Overall Electrification 2010 Target/Estimate % 98% Generation Investment Share 2003 Estimate % 60% Overall Electrification 2015 Target/Estimate % 100% Transmission Investment Share 2003 Estimate % 10% Rural Electrification 2010 Target/Estimate % 50% Distribution Investment Share 2003 Estimate % 30% Rural Electrification 2015 Target/Estimate % 70% 82 Study on Investment and Private Sector Participation in Power Distribution in the Latin American and Caribbean Region Nicaragua Consumption Growth Based Estimate ("Business as Usual")* Coverage Gap Based Estimate (According to Below Targets for Overall/Rural Access)* 2005- Total Number of Network Connections 2005- Investment Need Power Sector 2010 Estimate $m 71 Needed 2010 Estimate 1000s 1,523 2005- Total Number of Network Connections 2005- Investment Need Power Sector 2015 Estimate $m 154 Needed 2015 Estimate 1000s 1,762 2005- Total Investment Need Network 2005- Investment Need Power Generation 2010 Estimate $m 42 Extension 2010 Estimate $m 457 2005- Total Investment Need Network 2005- Investment Need Power Generation 2015 Estimate $m 92 Extension 2015 Estimate $m 529 2005- Number of Rural Network Connections 2005- Investment Need Power Transport 2010 Estimate $m 7 Needed 2010 Estimate 1000s 254 2005- Number of Rural Network Connections 2005- Investment Need Power Transport 2015 Estimate $m 15 Needed 2015 Estimate 1000s 385 2005- Investment Need Rural Network 2005- Investment Need Power Distribution 2010 Estimate $m 21 Extension 2010 Estimate $m 178 2005- Investment Need Rural Network 2005- Investment Need Power Distribution 2015 Estimate $m 46 Extension 2015 Estimate $m 269 (*) As upfront payment (no discounted cash flow considerations). (*) As upfront payment (no discounted cash flow considerations). Assumptions Assumptions Cost per Connection (overall) 2003 Estimate $ 300 Cost per Rural Connection 2003 Estimate $ 700 1972- Base for Growth Rate Estimate 2001 Median years 29 Average Size of Household (overall) 2003 Estimate persons 4.0 Per-kWh-Cost of New Capacity 2003 Estimate $ 1,900 Average Size of Household (rural) 2003 Estimate persons 5.0 Capacity Utilization 2003 Estimate h.p.a. 7,500 Overall Electrification 2010 Target/Estimate % 98% Generation Investment Share 2003 Estimate % 60% Overall Electrification 2015 Target/Estimate % 100% Transmission Investment Share 2003 Estimate % 10% Rural Electrification 2010 Target/Estimate % 50% Distribution Investment Share 2003 Estimate % 30% Rural Electrification 2015 Target/Estimate % 70% Annex 2: Work Sheets for Calculation of Estimates for Projected Investments 83 Panama Consumption Growth Based Estimate ("Business as Usual")* Coverage Gap Based Estimate (According to Below Targets for Overall/Rural Access)* Total Number of Network Connections 2005- Investment Need Power Sector 2005-2010 Estimate $m 386 Needed 2010 Estimate 1000s 787 Total Number of Network Connections 2005- Investment Need Power Sector 2005-2015 Estimate $m 892 Needed 2015 Estimate 1000s 865 2005- Investment Need Power Generation 2005-2010 Estimate $m 231 Total Investment Need Network Extension 2010 Estimate $m 236 2005- Investment Need Power Generation 2005-2015 Estimate $m 535 Total Investment Need Network Extension 2015 Estimate $m 259 Number of Rural Network Connections 2005- Investment Need Power Transport 2005-2010 Estimate $m 39 Needed 2010 Estimate 1000s 133 Number of Rural Network Connections 2005- Investment Need Power Transport 2005-2015 Estimate $m 89 Needed 2015 Estimate 1000s 193 2005- Investment Need Power Distribution 2005-2010 Estimate $m 116 Investment Need Rural Network Extension 2010 Estimate $m 93 2005- Investment Need Power Distribution 2005-2015 Estimate $m 268 Investment Need Rural Network Extension 2015 Estimate $m 135 (*) As upfront payment (no discounted cash flow (*) As upfront payment (no discounted cash considerations). flow considerations). Assumptions Assumptions Cost per Connection (overall) 2003 Estimate $ 300 Cost per Rural Connection 2003 Estimate $ 700 Base for Growth Rate Estimate 1972-2001 Median years 29 Average Size of Household (overall) 2003 Estimate persons 4.0 Per-kWh-Cost of New Capacity 2003 Estimate $ 1,900 Average Size of Household (rural) 2003 Estimate persons 5.0 Capacity Utilization 2003 Estimate h.p.a. 7,500 Overall Electrification 2010 Target/Estimate % 98% Generation Investment Share 2003 Estimate % 60% Overall Electrification 2015 Target/Estimate % 100% Transmission Investment Share 2003 Estimate % 10% Rural Electrification 2010 Target/Estimate % 50% Distribution Investment Share 2003 Estimate % 30% Rural Electrification 2015 Target/Estimate % 70% 84 Study on Investment and Private Sector Participation in Power Distribution in the Latin American and Caribbean Region Paraguay Consumption Growth Based Coverage Gap Based Estimate (According to Below Targets for Overall/Rural Estimate ("Business as Usual")* Access)* Total Number of Network Connections 2005- Investment Need Power Sector 2005-2010 Estimate $m 1,226 Needed 2010 Estimate 1000s 1,555 Total Number of Network Connections 2005- Investment Need Power Sector 2005-2015 Estimate $m 3,316 Needed 2015 Estimate 1000s 1,786 Total Investment Need Network 2005- Investment Need Power Generation 2005-2010 Estimate $m 736 Extension 2010 Estimate $m 467 Total Investment Need Network 2005- Investment Need Power Generation 2005-2015 Estimate $m 1,990 Extension 2015 Estimate $m 536 Number of Rural Network 2005- Investment Need Power Transport 2005-2010 Estimate $m 123 Connections Needed 2010 Estimate 1000s 253 Number of Rural Network 2005- Investment Need Power Transport 2005-2015 Estimate $m 332 Connections Needed 2015 Estimate 1000s 371 Investment Need Rural Network 2005- Investment Need Power Distribution 2005-2010 Estimate $m 368 Extension 2010 Estimate $m 177 Investment Need Rural Network 2005- Investment Need Power Distribution 2005-2015 Estimate $m 995 Extension 2015 Estimate $m 259 (*) As upfront payment (no (*) As upfront payment (no discounted cash flow considerations). discounted cash flow considerations). Assumptions Assumptions Cost per Connection (overall) 2003 Estimate $ 300 Cost per Rural Connection 2003 Estimate $ 700 Base for Growth Rate Estimate 1972-2001 Median years 29 Average Size of Household (overall) 2003 Estimate persons 4.0 Per-kWh-Cost of New Capacity 2003 Estimate $ 1,900 Average Size of Household (rural) 2003 Estimate persons 5.0 Capacity Utilization 2003 Estimate h.p.a. 7,500 Overall Electrification 2010 Target/Estimate % 98% Generation Investment Share 2003 Estimate % 60% Overall Electrification 2015 Target/Estimate % 100% Transmission Investment Share 2003 Estimate % 10% Rural Electrification 2010 Target/Estimate % 50% Distribution Investment Share 2003 Estimate % 30% Rural Electrification 2015 Target/Estimate % 70% Annex 2: Work Sheets for Calculation of Estimates for Projected Investments 85 Peru Consumption Growth Based Estimate ("Business as Usual")* Coverage Gap Based Estimate (According to Below Targets for Overall/Rural Access)* 2005- Total Number of Network Connections 2005- Investment Need Power Sector 2010 Estimate $m 1,291 Needed 2010 Estimate 1000s 7,158 2005- Total Number of Network Connections 2005- Investment Need Power Sector 2015 Estimate $m 2,886 Needed 2015 Estimate 1000s 7,862 2005- 2005- Investment Need Power Generation 2010 Estimate $m 775 Total Investment Need Network Extension 2010 Estimate $m 2,148 2005- 2005- Investment Need Power Generation 2015 Estimate $m 1,732 Total Investment Need Network Extension 2015 Estimate $m 2,358 2005- Number of Rural Network Connections 2005- Investment Need Power Transport 2010 Estimate $m 129 Needed 2010 Estimate 1000s 712 2005- Number of Rural Network Connections 2005- Investment Need Power Transport 2015 Estimate $m 289 Needed 2015 Estimate 1000s 1,001 2005- 2005- Investment Need Power Distribution 2010 Estimate $m 387 Investment Need Rural Network Extension 2010 Estimate $m 498 2005- 2005- Investment Need Power Distribution 2015 Estimate $m 866 Investment Need Rural Network Extension 2015 Estimate $m 700 (*) As upfront payment (no (*) As upfront payment (no discounted cash discounted cash flow flow considerations). considerations). Assumptions Assumptions Cost per Connection (overall) 2003 Estimate $ 300 Cost per Rural Connection 2003 Estimate $ 700 1972- Base for Growth Rate Estimate 2001 Median years 29 Average Size of Household (overall) 2003 Estimate persons 4.0 Per-kWh-Cost of New Capacity 2003 Estimate $ 1,900 Average Size of Household (rural) 2003 Estimate persons 5.0 Capacity Utilization 2003 Estimate h.p.a. 7,500 Overall Electrification 2010 Target/Estimate % 98% Generation Investment Share 2003 Estimate % 60% Overall Electrification 2015 Target/Estimate % 100% Transmission Investment Share 2003 Estimate % 10% Rural Electrification 2010 Target/Estimate % 50% Distribution Investment Share 2003 Estimate % 30% Rural Electrification 2015 Target/Estimate % 70% 86 Study on Investment and Private Sector Participation in Power Distribution in the Latin American and Caribbean Region Uruguay Consumption Growth Based Estimate ("Business as Usual")* Coverage Gap Based Estimate (According to Below Targets for Overall/Rural Access)* 2005- Total Number of Network Connections 2005- Investment Need Power Sector 2010 Estimate $m 432 Needed 2010 Estimate 1000s 852 2005- Total Number of Network Connections 2005- Investment Need Power Sector 2015 Estimate $m 963 Needed 2015 Estimate 1000s 894 2005- 2005- Investment Need Power Generation 2010 Estimate $m 259 Total Investment Need Network Extension 2010 Estimate $m 256 2005- 2005- Investment Need Power Generation 2015 Estimate $m 578 Total Investment Need Network Extension 2015 Estimate $m 268 2005- Number of Rural Network Connections 2005- Investment Need Power Transport 2010 Estimate $m 43 Needed 2010 Estimate 1000s 23 2005- Number of Rural Network Connections 2005- Investment Need Power Transport 2015 Estimate $m 96 Needed 2015 Estimate 1000s 28 2005- 2005- Investment Need Power Distribution 2010 Estimate $m 130 Investment Need Rural Network Extension 2010 Estimate $m 16 2005- 2005- Investment Need Power Distribution 2015 Estimate $m 289 Investment Need Rural Network Extension 2015 Estimate $m 20 (*) As upfront payment (no discounted (*) As upfront payment (no discounted cash cash flow considerations). flow considerations). Assumptions Assumptions Cost per Connection (overall) 2003 Estimate $ 300 Cost per Rural Connection 2003 Estimate $ 700 1972- Base for Growth Rate Estimate 2001 Median years 29 Average Size of Household (overall) 2003 Estimate persons 4.0 Per-kWh-Cost of New Capacity 2003 Estimate $ 1,900 Average Size of Household (rural) 2003 Estimate persons 5.0 Capacity Utilization 2003 Estimate h.p.a. 7,500 Overall Electrification 2010 Target/Estimate % 98% Generation Investment Share 2003 Estimate % 60% Overall Electrification 2015 Target/Estimate % 100% Transmission Investment Share 2003 Estimate % 10% Rural Electrification 2010 Target/Estimate % 50% Distribution Investment Share 2003 Estimate % 30% Rural Electrification 2015 Target/Estimate % 70% Annex 2: Work Sheets for Calculation of Estimates for Projected Investments 87 Venezuela, RB Consumption Growth Based Estimate ("Business as Usual")* Coverage Gap Based Estimate (According to Below Targets for Overall/Rural Access)* 2005- Total Number of Network Connections 2005- Investment Need Power Sector 2010 Estimate $m 7,948 Needed 2010 Estimate 1000s 6,848 2005- Total Number of Network Connections 2005- Investment Need Power Sector 2015 Estimate $m 18,903 Needed 2015 Estimate 1000s 7,644 2005- 2005- Investment Need Power Generation 2010 Estimate $m 4,769 Total Investment Need Network Extension 2010 Estimate $m 2,054 2005- 2005- Investment Need Power Generation 2015 Estimate $m 11,342 Total Investment Need Network Extension 2015 Estimate $m 2,293 2005- Number of Rural Network Connections 2005- Investment Need Power Transport 2010 Estimate $m 795 Needed 2010 Estimate 1000s 314 2005- Number of Rural Network Connections 2005- Investment Need Power Transport 2015 Estimate $m 1,890 Needed 2015 Estimate 1000s 437 2005- 2005- Investment Need Power Distribution 2010 Estimate $m 2,385 Investment Need Rural Network Extension 2010 Estimate $m 220 2005- 2005- Investment Need Power Distribution 2015 Estimate $m 5,671 Investment Need Rural Network Extension 2015 Estimate $m 306 (*) As upfront payment (no discounted cash flow (*) As upfront payment (no discounted cash considerations). flow considerations). Assumptions Assumptions Cost per Connection (overall) 2003 Estimate $ 300 Cost per Rural Connection 2003 Estimate $ 700 1972- Base for Growth Rate Estimate 2001 Median years 29 Average Size of Household (overall) 2003 Estimate persons 4.0 Per-kWh-Cost of New Capacity 2003 Estimate $ 1,900 Average Size of Household (rural) 2003 Estimate persons 5.0 Capacity Utilization 2003 Estimate h.p.a. 7,500 Overall Electrification 2010 Target/Estimate % 98% Generation Investment Share 2003 Estimate % 60% Overall Electrification 2015 Target/Estimate % 100% Transmission Investment Share 2003 Estimate % 10% Rural Electrification 2010 Target/Estimate % 50% Distribution Investment Share 2003 Estimate % 30% Rural Electrification 2015 Target/Estimate % 70% 88 Study on Investment and Private Sector Participation in Power Distribution in the Latin American and Caribbean Region Argentina Annual Electricity Consumption 2001 Latest GWh 76,195 Annual Electricity Consumption 2010 Estimate GWh 115,021 Electricity Consumption Growth 1972-2001 Mean % 4.68% Annual Electricity Consumption 2015 Estimate GWh 144,590 Electricity Consumption Growth 1972-2002 Median % 4.82% Electricity Consumption Growth 1972-2003 StandDev % 4.32% Annual Private Investment, Energy 2002 Latest $m 300 Trend last Electricity Consumption Growth 1997-2001 5 years % 5.38% Annual Private Investment, Energy 1992-2002 Mean $m 2,319 Annual Private Investment, Energy 1992-2002 Median $m 2,135 Annual Electricity Production 2001 Latest GWh 90,181 Annual Private Investment, Energy 1992-2002 StandDev $m 1,296 Annual Private Investment Growth, Trend last 5 - Electricity Production Growth 1972-2002 Mean % 4.63% Energy 1998-2002 years % 87.13% Electricity Production Growth 1972-2002 Median % 4.70% Electricity Production Growth 1972-2002 StandDev % 3.61% Annual Private Investment, Power 2000 Latest $m 180 Trend last Electricity Production Growth 1997-2001 5 years % 5.33% Annual Private Investment, Power 1992-2000 Mean $m 1,621 Annual Private Investment, Power 1992-2000 Median $m 1,036 Transmission & Distribution Losses 2001 Latest % 13.59% Annual Private Investment, Power 1992-2000 StandDev $m 1,695 Annual Private Investment Growth, Trend last 5 - Transmission & Distribution Losses 1971-2001 Mean % 14.29% Power 1996-2000 years % 70.50% Transmission & Distribution Losses 1971-2001 Median % 13.96% Transmission & Distribution Losses 1971-2001 StandDev % 3.17% Total Population 2003 Latest 1000s 38,377 Trend last Transmission & Distribution Losses 1997-2001 5 years % -5.43% Annual Population Growth 2003 Latest % 0.87% Share of Rural Population 2003 Latest % 9.87% GDP Growth 2001 Latest % 8.72% Annual Rural Population Growth 2003 Latest % 3.01% people per GDP Growth 1971-2003 Mean % 1.60% Population density, rural 2003 Latest km2 11 GDP Growth 1971-2003 Median % 2.51% GDP Growth 1971-2003 StandDev % 6.08% Access to Electricity 2000 Latest % 94.60% Trend last GDP Growth 1999-2003 5 years % -2.15% Rural population w/ access to electricity 2000 Latest % 15.00% Annex 2: Work Sheets for Calculation of Estimates for Projected Investments 89 Bolivia Annual Electricity Consumption 2001 Latest GWh 3,469 Annual Electricity Consumption 2010 Estimate GWh 5,448 Electricity Consumption Growth 1972-2001 Mean % 5.14% Annual Electricity Consumption 2015 Estimate GWh 7,001 Electricity Consumption Growth 1972-2002 Median % 6.34% Electricity Consumption Growth 1972-2003 StandDev % 6.55% Annual Private Investment, Energy 2001 Latest $m 29 Trend last Electricity Consumption Growth 1997-2001 5 years % 6.89% Annual Private Investment, Energy 1992-2002 Mean $m 544 Annual Private Investment, Energy 1992-2002 Median $m 127 Annual Electricity Production 2001 Latest GWh 3,973 Annual Private Investment, Energy 1992-2002 StandDev $m 973 Trend last - Electricity Production Growth 1972-2002 Mean % 4.73% Annual Private Investment Growth, Energy 1998-2002 5 years % 389.91% Electricity Production Growth 1972-2002 Median % 6.26% Electricity Production Growth 1972-2002 StandDev % 4.57% Annual Private Investment, Power 2000 Latest $m 131 Trend last Electricity Production Growth 1997-2001 5 years % 4.33% Annual Private Investment, Power 1995-2000 Mean $m 101 Annual Private Investment, Power 1995-2000 Median $m 50 Transmission & Distribution Losses 2001 Latest % 12.18% Annual Private Investment, Power 1995-2000 StandDev $m 111 Trend last Transmission & Distribution Losses 1971-2001 Mean % 14.19% Annual Private Investment Growth, Power 1996-2000 5 years % 227.12% Transmission & Distribution Losses 1971-2001 Median % 12.49% Transmission & Distribution Losses 1971-2001 StandDev % 4.96% Total Population 2003 Latest 1000s 8,980 Trend last Transmission & Distribution Losses 1997-2001 5 years % 17.18% Annual Population Growth 2003 Latest % 1.92% Share of Rural Population 2003 Latest % 36.62% GDP Growth 2001 Latest % 2.45% Annual Rural Population Growth 2003 Latest % 0.60% people per GDP Growth 1971-2003 Mean % 2.59% Population density, rural 2003 Latest km2 112 GDP Growth 1971-2003 Median % 2.91% GDP Growth 1971-2003 StandDev % 3.01% Access to Electricity 2000 Latest % 60.40% Trend last GDP Growth 1999-2003 5 years % 1.88% Rural population w/ access to electricity 2000 Latest % 22.30% 90 Study on Investment and Private Sector Participation in Power Distribution in the Latin American and Caribbean Region Brazil Annual Electricity Consumption 2001 Latest GWh 298,010 Annual Electricity Consumption 2010 Estimate GWh 539,316 Electricity Consumption Growth 1972-2001 Mean % 6.81% Annual Electricity Consumption 2015 Estimate GWh 749,827 Electricity Consumption Growth 1972-2002 Median % 5.93% Electricity Consumption Growth 1972-2003 StandDev % 4.58% Annual Private Investment, Energy 2001 Latest $m 2,612 Electricity Consumption Growth 1997-2001 Trend last 5 years % 2.20% Annual Private Investment, Energy 1994-2002 Mean $m 5,472 Annual Private Investment, Energy 1994-2002 Median $m 4,609 Annual Electricity Production 2001 Latest GWh 327,874 Annual Private Investment, Energy 1994-2002 StandDev $m 4,643 Trend last - Electricity Production Growth 1972-2002 Mean % 6.45% Annual Private Investment Growth, Energy 1998-2002 5 years % 50.93% Electricity Production Growth 1972-2002 Median % 5.73% Electricity Production Growth 1972-2002 StandDev % 4.50% Annual Private Investment, Power 2000 Latest $m 1,467 Electricity Production Growth 1997-2001 Trend last 5 years % 2.49% Annual Private Investment, Power 1995-2000 Mean $m 4,361 Annual Private Investment, Power 1995-2000 Median $m 3,075 Transmission & Distribution Losses 2001 Latest % 17.24% Annual Private Investment, Power 1995-2000 StandDev $m 4,929 Transmission & Distribution Trend last - Losses 1971-2001 Mean % 13.82% Annual Private Investment Growth, Power 1996-2000 5 years % 31.01% Transmission & Distribution Losses 1971-2001 Median % 13.04% Transmission & Distribution Losses 1971-2001 StandDev % 2.33% Total Population 2003 Latest 1000s 176,596 Transmission & Distribution Losses 1997-2001 Trend last 5 years % 17.46% Annual Population Growth 2003 Latest % 1.20% Share of Rural Population 2003 Latest % 16.99% GDP Growth 2003 Latest % -0.20% Annual Rural Population Growth 2003 Latest % -2.35% people GDP Growth 1971-2003 Mean % 3.98% Population density, rural 2003 Latest per km2 53 GDP Growth 1971-2003 Median % 3.60% GDP Growth 1971-2003 StandDev % 4.54% Access to Electricity 2000 Latest % 94.90% GDP Growth 1999-2003 Trend last 5 years % 1.58% Rural population w/ access to electricity 2000 Latest % 72.00% Annex 2: Work Sheets for Calculation of Estimates for Projected Investments 91 Chile Annual Electricity Consumption 2001 Latest GWh 39,379 Annual Electricity Consumption 2010 Estimate GWh 66,397 Electricity Consumption Growth 1972-2001 Mean % 5.98% Annual Electricity Consumption 2015 Estimate GWh 88,756 Electricity Consumption Growth 1972-2001 Median % 5.84% Electricity Consumption Growth 1972-2001 StandDev % 4.36% Annual Private Investment, Energy 2001 Latest $m 187,000 Trend last Electricity Consumption Growth 1997-2001 5 years % 8.14% Annual Private Investment, Energy 1992-2001 Mean $m 792 Annual Private Investment, Energy 1992-2001 Median $m 646 Annual Electricity Production 2001 Latest GWh 43,918 Annual Private Investment, Energy 1992-2001 StandDev $m 636 Annual Private Investment Growth, Trend last Electricity Production Growth 1972-2002 Mean % 5.68% Energy 1998-2002 5 years % -83.59% Electricity Production Growth 1972-2002 Median % 6.15% Electricity Production Growth 1972-2002 StandDev % 3.66% Annual Private Investment, Power 2000 Latest $m 560 Trend last Electricity Production Growth 1997-2001 5 years % 7.36% Annual Private Investment, Power 1990-2000 Mean $m 619 Annual Private Investment, Power 1990-2000 Median $m 661 Transmission & Distribution Losses 2001 Latest % 7.13% Annual Private Investment, Power 1990-2000 StandDev $m 394 Annual Private Investment Growth, Trend last Transmission & Distribution Losses 1971-2001 Mean % 10.99% Power 1996-2000 5 years % -281.20% Transmission & Distribution Losses 1971-2001 Median % 11.17% Transmission & Distribution Losses 1971-2001 StandDev % 2.24% Total Population 2003 Latest 1000s 15,774 Trend last Transmission & Distribution Losses 1997-2001 5 years % 7.09% Annual Population Growth 2003 Latest % 1.18% Share of Rural Population 2003 Latest % 13.02% GDP Growth 2003 Latest % 3.30% Annual Rural Population Growth 2003 Latest % -1.39% people per GDP Growth 1971-2003 Mean % 4.37% Population density, rural 2003 Latest km2 107 GDP Growth 1971-2003 Median % 5.71% GDP Growth 1971-2003 StandDev % 5.55% Access to Electricity 2000 Latest % 99.00% Trend last Rural population w/ access to GDP Growth 1999-2003 5 years % 2.31% electricity 2000 Latest % 76.00% 92 Study on Investment and Private Sector Participation in Power Distribution in the Latin American and Caribbean Region Colombia Annual Electricity Consumption 2001 Latest GWh 35,190 Annual Electricity Consumption 2010 Estimate GWh 55,140 Electricity Consumption Growth 1972-2001 Mean % 5.12% Annual Electricity Consumption 2015 Estimate GWh 70,767 Electricity Consumption Growth 1972-2002 Median % 4.39% Electricity Consumption Growth 1972-2003 StandDev % 4.82% Annual Private Investment, Energy 2000 Latest $m 71 Trend last 5 Electricity Consumption Growth 1997-2001 years % -0.46% Annual Private Investment, Energy 1993-2000 Mean $m 947 Annual Private Investment, Energy 1993-2000 Median $m 422 Annual Electricity Production 2001 Latest GWh 43,463 Annual Private Investment, Energy 1993-2000 StandDev $m 1,108 Annual Private Investment Growth, Trend last 5 Electricity Production Growth 1972-2002 Mean % 5.37% Energy 1996-2000 years % -165.81% Electricity Production Growth 1972-2002 Median % 5.16% Electricity Production Growth 1972-2002 StandDev % 6.06% Annual Private Investment, Power 1999 Latest $m 175 Trend last 5 Electricity Production Growth 1997-2001 years % -0.49% Annual Private Investment, Power 1993-1999 Mean $m 1,085 Annual Private Investment, Power 1993-1999 Median $m 757 Transmission & Distribution Losses 2001 Latest % 22.26% Annual Private Investment, Power 1993-1999 StandDev $m 1,098 Trend last 5 Transmission & Distribution Losses 1971-2001 Mean % 18.50% Annual Private Investment Growth, Power 1995-2000 years % 36.07% Transmission & Distribution Losses 1971-2001 Median % 16.19% Transmission & Distribution Losses 1971-2001 StandDev % 3.73% Total Population 2003 Latest 1000s 44,402 Trend last 5 Transmission & Distribution Losses 1997-2001 years % 23.04% Annual Population Growth 2003 Latest % 1.52% Share of Rural Population 2003 Latest % 23.60% GDP Growth 2003 Latest % 3.74% Annual Rural Population Growth 2003 Latest % -0.54% people per GDP Growth 1971-2003 Mean % 3.74% Population density, rural 2003 Latest km2 421 GDP Growth 1971-2003 Median % 3.74% GDP Growth 1971-2003 StandDev % 2.43% Access to Electricity 2000 Latest % 81.00% Trend last 5 GDP Growth 1999-2003 years % 1.09% Rural population w/ access to electricity 2000 Latest % 51.00% Annex 2: Work Sheets for Calculation of Estimates for Projected Investments 93 Costa Rica Annual Electricity Consumption 2001 Latest GWh 35,190 Annual Electricity Consumption 2010 Estimate GWh 62,058 Electricity Consumption Growth 1972-2001 Mean % 6.51% Annual Electricity Consumption 2015 Estimate GWh 85,049 Electricity Consumption Growth 1972-2002 Median % 5.63% Electricity Consumption Growth 1972-2003 StandDev % 6.83% Annual Private Investment, Energy 2000 Latest $m 0 Trend last Electricity Consumption Growth 1997-2001 5 years % 6.51% Annual Private Investment, Energy 1994-2000 Mean $m 45 Annual Private Investment, Energy 1994-2000 Median $m 58 Annual Electricity Production 2001 Latest GWh 6,941 Annual Private Investment, Energy 1994-2000 StandDev $m 39 Trend last Electricity Production Growth 1972-2002 Mean % 6.33% Annual Private Investment Growth, Energy 1996-2000 5 years % n/a Electricity Production Growth 1972-2002 Median % 6.56% Electricity Production Growth 1972-2002 StandDev % 5.58% Annual Private Investment, Power 2000 Latest $m 0 Trend last Electricity Production Growth 1997-2001 5 years % 7.92% Annual Private Investment, Power 1992-2000 Mean $m 40 Annual Private Investment, Power 1992-2000 Median $m 37 Transmission & Distribution Losses 2001 Latest % 7.20% Annual Private Investment, Power 1992-2000 StandDev $m 38 Trend last - Transmission & Distribution Losses 1989-2001 Mean % 7.69% Annual Private Investment Growth, Power 1995-2000 5 years % 35.06% Transmission & Distribution Losses 1989-2001 Median % 7.67% Transmission & Distribution Losses 1989-2001 StandDev % 0.40% Total Population 2003 Latest 1000s 4,005 Trend last Transmission & Distribution Losses 1997-2001 5 years % 7.41% Annual Population Growth 2003 Latest % 1.59% Share of Rural Population 2003 Latest % 39.38% GDP Growth 2003 Latest % 5.60% Annual Rural Population Growth 2003 Latest % 0.22% people GDP Growth 1971-2003 Mean % 4.36% Population density, rural 2003 Latest per km2 696 GDP Growth 1971-2003 Median % 4.94% GDP Growth 1971-2003 StandDev % 3.50% Access to Electricity 2000 Latest % 95.70% Trend last GDP Growth 1999-2003 5 years % 3.95% Rural population w/ access to electricity 2000 Latest % 84.80% 94 Study on Investment and Private Sector Participation in Power Distribution in the Latin American and Caribbean Region Dominican Republic Annual Electricity Consumption 2001 Latest GWh 6,976 Annual Electricity Consumption 2010 Estimate GWh 13,475 Electricity Consumption Growth 1972-2001 Mean % 7.59% Annual Electricity Consumption 2015 Estimate GWh 19,426 Electricity Consumption Growth 1972-2002 Median % 6.28% Electricity Consumption Growth 1972-2003 StandDev % 16.15% Annual Private Investment, Energy 2002 Latest $m 400 Trend last Electricity Consumption Growth 1997-2001 5 years % 7.70% Annual Private Investment, Energy 1994-2000 Mean $m 330 Annual Private Investment, Energy 1994-2000 Median $m 285 Annual Electricity Production 2001 Latest GWh 10,307 Annual Private Investment, Energy 1994-2000 StandDev $m 240 Trend last Electricity Production Growth 1972-2002 Mean % 8.86% Annual Private Investment Growth, Energy 1996-2000 5 years % n/a Electricity Production Growth 1972-2002 Median % 7.04% Electricity Production Growth 1972-2002 StandDev % 15.60% Annual Private Investment, Power 2000 Latest $m 400 Trend last Electricity Production Growth 1997-2001 5 years % 9.36% Annual Private Investment, Power 1992-2000 Mean $m 385 Annual Private Investment, Power 1992-2000 Median $m 322 Transmission & Distribution Losses 2001 Latest % 25.95% Annual Private Investment, Power 1992-2000 StandDev $m 391 Trend last Transmission & Distribution Losses 1973-2001 Mean % 24.41% Annual Private Investment Growth, Power 1995-2000 5 years % n/a Transmission & Distribution Losses 1989-2001 Median % 26.07% Transmission & Distribution Losses 1989-2001 StandDev % 5.31% Total Population 2003 Latest 1000s 8,739 Trend last Transmission & Distribution Losses 1997-2001 5 years % 27.10% Annual Population Growth 2003 Latest % 1.45% Share of Rural Population 2003 Latest % 40.65% GDP Growth 2003 Latest % -1.25% Annual Rural Population Growth 2003 Latest % 0.52% people per GDP Growth 1971-2003 Mean % 4.87% Population density, rural 2003 Latest km2 321 GDP Growth 1971-2003 Median % 4.81% GDP Growth 1971-2003 StandDev % 3.75% Access to Electricity 2000 Latest % 66.80% Trend last GDP Growth 1999-2003 5 years % 4.16% Rural population w/ access to electricity 2000 Latest % 61.00% Annex 2: Work Sheets for Calculation of Estimates for Projected Investments 95 Ecuador Annual Electricity Consumption 2001 Latest GWh 7,965 Annual Electricity Consumption 2010 Estimate GWh 15,918 Electricity Consumption Growth 1972-2001 Mean % 8.00% Annual Electricity Consumption 2015 Estimate GWh 23,387 Electricity Consumption Growth 1972-2002 Median % 8.08% Electricity Consumption Growth 1972-2003 StandDev % 6.49% Annual Private Investment, Energy 2000 Latest $m 280 Trend last Electricity Consumption Growth 1997-2001 5 years % 2.58% Annual Private Investment, Energy 1994-2000 Mean $m n/a Annual Private Investment, Energy 1994-2000 Median $m n/a Annual Electricity Production 2001 Latest GWh 11,050 Annual Private Investment, Energy 1994-2000 StandDev $m n/a Trend last Electricity Production Growth 1972-2002 Mean % 8.30% Annual Private Investment Growth, Energy 1996-2000 5 years % n/a Electricity Production Growth 1972-2002 Median % 9.58% Electricity Production Growth 1972-2002 StandDev % 5.64% Annual Private Investment, Power 2000 Latest $m 280 Trend last Electricity Production Growth 1997-2001 5 years % 3.55% Annual Private Investment, Power 1992-2000 Mean $m n/a Annual Private Investment, Power 1992-2000 Median $m n/a Transmission & Distribution Losses 2001 Latest % 24.60% Annual Private Investment, Power 1992-2000 StandDev $m n/a Trend last Transmission & Distribution Losses 1973-2001 Mean % 19.57% Annual Private Investment Growth, Power 1995-2000 5 years % n/a Transmission & Distribution Losses 1989-2001 Median % 20.08% Transmission & Distribution Losses 1989-2001 StandDev % 4.11% Total Population 2003 Latest 1000s 13,029 Trend last Transmission & Distribution Losses 1997-2001 5 years % 23.89% Annual Population Growth 2003 Latest % 1.63% Share of Rural Population 2003 Latest % 38.21% GDP Growth 2003 Latest % 2.57% Annual Rural Population Growth 2003 Latest % 0.33% people GDP Growth 1971-2003 Mean % 3.66% Population density, rural 2003 Latest per km2 305 GDP Growth 1971-2003 Median % 3.41% GDP Growth 1971-2003 StandDev % 3.92% Access to Electricity 2000 Latest % 80.00% Trend last GDP Growth 1999-2003 5 years % 1.52% Rural population w/ access to electricity 2000 Latest % 53.60% 96 Study on Investment and Private Sector Participation in Power Distribution in the Latin American and Caribbean Region El Salvador Annual Electricity Consumption 2001 Latest GWh 3,754 Annual Electricity Consumption 2010 Estimate GWh 6,496 Electricity Consumption Growth 1972-2001 Mean % 6.28% Annual Electricity Consumption 2015 Estimate GWh 8,810 Electricity Consumption Growth 1972-2002 Median % 6.05% Electricity Consumption Growth 1972-2003 StandDev % 4.94% Annual Private Investment, Energy 2002 Latest $m 10 Trend last 5 Electricity Consumption Growth 1997-2001 years % 5.14% Annual Private Investment, Energy 1994-2000 Mean $m n/a Annual Private Investment, Energy 1994-2000 Median $m n/a Annual Electricity Production 2001 Latest GWh 3,909 Annual Private Investment, Energy 1994-2000 StandDev $m n/a Trend last 5 Electricity Production Growth 1972-2002 Mean % 5.83% Annual Private Investment Growth, Energy 1996-2000 years % n/a Electricity Production Growth 1972-2002 Median % 5.97% Electricity Production Growth 1972-2002 StandDev % 5.44% Annual Private Investment, Power 2000 Latest $m 275 Trend last 5 Electricity Production Growth 1997-2001 years % 2.76% Annual Private Investment, Power 1992-2000 Mean $m n/a Annual Private Investment, Power 1992-2000 Median $m n/a Transmission & Distribution Losses 2001 Latest % 13.05% Annual Private Investment, Power 1992-2000 StandDev $m n/a Trend last 5 Transmission & Distribution Losses 1973-2001 Mean % 13.63% Annual Private Investment Growth, Power 1995-2000 years % n/a Transmission & Distribution Losses 1989-2001 Median % 13.34% Transmission & Distribution Losses 1989-2001 StandDev % 1.43% Total Population 2003 Latest 1000s 6,533 Trend last 5 Transmission & Distribution Losses 1997-2001 years % 13.13% Annual Population Growth 2003 Latest % 1.79% Share of Rural Population 2003 Latest % 40.56% GDP Growth 2003 Latest % 1.98% Annual Rural Population Growth 2003 Latest % 0.94% people per GDP Growth 1971-2003 Mean % 2.22% Population density, rural 2003 Latest km2 394 GDP Growth 1971-2003 Median % 2.92% GDP Growth 1971-2003 StandDev % 4.53% Access to Electricity 2000 Latest % 70.80% Trend last 5 GDP Growth 1999-2003 years % 2.27% Rural population w/ access to electricity 2000 Latest % 41.10% Annex 2: Work Sheets for Calculation of Estimates for Projected Investments 97 Guatemala Annual Electricity Consumption 2001 Latest GWh 4,178 Annual Electricity Consumption 2010 Estimate GWh 7,351 Electricity Consumption Growth 1972-2001 Mean % 6.48% Annual Electricity Consumption 2015 Estimate GWh 10,062 Electricity Consumption Growth 1972-2002 Median % 6.91% Electricity Consumption Growth 1972-2003 StandDev % 6.64% Annual Private Investment, Energy 2002 Latest $m 60 Trend last Electricity Consumption Growth 1997-2001 5 years % 6.55% Annual Private Investment, Energy 1994-2002 Mean $m 179 Annual Private Investment, Energy 1994-2002 Median $m 119 Annual Electricity Production 2001 Latest GWh 5,856 Annual Private Investment, Energy 1994-2002 StandDev $m 176 Trend last Electricity Production Growth 1972-2002 Mean % 7.62% Annual Private Investment Growth, Energy 1998-2002 5 years % -82.47% Electricity Production Growth 1972-2002 Median % 8.25% Electricity Production Growth 1972-2002 StandDev % 6.93% Annual Private Investment, Power 2002 Latest $m 60 Trend last Electricity Production Growth 1997-2001 5 years % 6.55% Annual Private Investment, Power 1994-2002 Mean $m 179 Annual Private Investment, Power 1994-2002 Median $m 119 Transmission & Distribution Losses 2001 Latest % 23.00% Annual Private Investment, Power 1994-2002 StandDev $m 170 Trend last Transmission & Distribution Losses 1971-2001 Mean % 12.30% Annual Private Investment Growth, Power 1995-2002 5 years % 118.73% Transmission & Distribution Losses 1971-2001 Median % 12.57% Transmission & Distribution Losses 1971-2001 StandDev % 5.62% Total Population 2003 Latest 1000s 12,307 Trend last Transmission & Distribution Losses 1997-2001 5 years % 20.41% Annual Population Growth 2003 Latest % 2.59% Share of Rural Population 2003 Latest % 53.65% GDP Growth 2001 Latest % 2.12% Annual Rural Population Growth 2003 Latest % 1.85% people per GDP Growth 1971-2003 Mean % 3.44% Population density, rural 2003 Latest km2 468 GDP Growth 1971-2003 Median % 3.85% GDP Growth 1971-2003 StandDev % 2.64% Access to Electricity 2000 Latest % 66.70% Trend last GDP Growth 1999-2003 5 years % 2.83% Rural population w/ access to electricity 2000 Latest % 48.70% 98 Study on Investment and Private Sector Participation in Power Distribution in the Latin American and Caribbean Region Haiti Annual Electricity Consumption 2001 Latest GWh 291 Annual Electricity Consumption 2010 Estimate GWh 572 Electricity Consumption Growth 1972-2001 Mean % 7.79% Annual Electricity Consumption 2015 Estimate GWh 832 Electricity Consumption Growth 1972-2002 Median % 4.94% Electricity Consumption Growth 1972-2003 StandDev % 22.40% Annual Private Investment, Energy 1995 Latest $m 5 Trend last Electricity Consumption Growth 1997-2001 5 years % 5.77% Annual Private Investment, Energy 1994-2002 Mean $m n/a Annual Private Investment, Energy 1994-2002 Median $m n/a Annual Electricity Production 2001 Latest GWh 547 Annual Private Investment, Energy 1994-2002 StandDev $m n/a Trend last 5 Electricity Production Growth 1972-2002 Mean % 7.98% Annual Private Investment Growth, Energy 1998-2002 years % n/a Electricity Production Growth 1972-2002 Median % 5.47% Electricity Production Growth 1972-2002 StandDev % 18.78% Annual Private Investment, Power 2002 Latest $m 5 Trend last Electricity Production Growth 1997-2001 5 years % -1.35% Annual Private Investment, Power 1994-2002 Mean $m n/a Annual Private Investment, Power 1994-2002 Median $m n/a Transmission & Distribution Losses 2001 Latest % 53.20% Annual Private Investment, Power 1994-2002 StandDev $m n/a Trend last 5 Transmission & Distribution Losses 1971-2001 Mean % 33.32% Annual Private Investment Growth, Power 1995-2002 years % n/a Transmission & Distribution Losses 1971-2001 Median % 29.15% Transmission & Distribution Losses 1971-2001 StandDev % 11.54% Total Population 2003 Latest 1000s 8,440 Trend last Transmission & Distribution Losses 1997-2001 5 years % 49.94% Annual Population Growth 2003 Latest % 1.84% Share of Rural Population 2003 Latest % 62.50% GDP Growth 2001 Latest % 0.00% Annual Rural Population Growth 2003 Latest % 0.84% people per GDP Growth 1971-2003 Mean % 0.81% Population density, rural 2003 Latest km2 665 GDP Growth 1971-2003 Median % 0.76% GDP Growth 1971-2003 StandDev % 4.50% Access to Electricity 2000 Latest % 34.00% Trend last GDP Growth 1999-2003 5 years % 0.33% Rural population w/ access to electricity 2000 Latest % #VALUE! Annex 2: Work Sheets for Calculation of Estimates for Projected Investments 99 Honduras Annual Electricity Consumption 2001 Latest GWh 3,368 Annual Electricity Consumption 2010 Estimate GWh 6,761 Electricity Consumption Growth 1972-2001 Mean % 8.05% Annual Electricity Consumption 2015 Estimate GWh 9,957 Electricity Consumption Growth 1972-2002 Median % 6.78% Electricity Consumption Growth 1972-2003 StandDev % 7.50% Annual Private Investment, Energy 1998 Latest $m 87 Trend last 5 Electricity Consumption Growth 1997-2001 years % 7.57% Annual Private Investment, Energy 1994-2002 Mean $m n/a Annual Private Investment, Energy 1994-2002 Median $m n/a Annual Electricity Production 2001 Latest GWh 3,992 Annual Private Investment, Energy 1994-2002 StandDev $m n/a Trend last 5 Electricity Production Growth 1972-2002 Mean % 8.21% Annual Private Investment Growth, Energy 1998-2002 years % n/a Electricity Production Growth 1972-2002 Median % 8.62% Electricity Production Growth 1972-2002 StandDev % 5.96% Annual Private Investment, Power 1995 Latest $m 112 Trend last 5 Electricity Production Growth 1997-2001 years % 5.48% Annual Private Investment, Power 1994-2002 Mean $m n/a Annual Private Investment, Power 1994-2002 Median $m n/a Transmission & Distribution Losses 2001 Latest % 21.22% Annual Private Investment, Power 1994-2002 StandDev $m n/a Trend last 5 Transmission & Distribution Losses 1971-2001 Mean % 17.97% Annual Private Investment Growth, Power 1995-2002 years % n/a Transmission & Distribution Losses 1971-2001 Median % 16.99% Transmission & Distribution Losses 1971-2001 StandDev % 5.03% Total Population 2003 Latest 1000s 6,969 Trend last 5 Transmission & Distribution Losses 1997-2001 years % 21.87% Annual Population Growth 2003 Latest % 2.50% Share of Rural Population 2003 Latest % 54.40% GDP Growth 2001 Latest % 3.01% Annual Rural Population Growth 2003 Latest % 1.76% people per GDP Growth 1971-2003 Mean % 3.65% Population density, rural 2003 Latest km2 343 GDP Growth 1971-2003 Median % 4.00% GDP Growth 1971-2003 StandDev % 3.27% Access to Electricity 2000 Latest % 54.50% Trend last 5 GDP Growth 1999-2003 years % 2.33% Rural population w/ access to electricity 2000 Latest % 32.95% 100 Study on Investment and Private Sector Participation in Power Distribution in the Latin American and Caribbean Region Jamaica Annual Electricity Consumption 2001 Latest GWh 6,081 Annual Electricity Consumption 2010 Estimate GWh 10,945 Electricity Consumption Growth 1972-2001 Mean % 6.75% Annual Electricity Consumption 2015 Estimate GWh 15,172 Electricity Consumption Growth 1972-2002 Median % 3.48% Electricity Consumption Growth 1972-2003 StandDev % 23.33% Annual Private Investment, Energy 1995 Latest $m 201 Electricity Consumption Growth 1997-2001 Trend last 5 years % 2.53% Annual Private Investment, Energy 1994-2002 Mean $m n/a Annual Private Investment, Energy 1994-2002 Median $m n/a Annual Electricity Production 2001 Latest GWh 6,656 Annual Private Investment, Energy 1994-2002 StandDev $m n/a Trend last Electricity Production Growth 1972-2002 Mean % 6.19% Annual Private Investment Growth, Energy 1998-2002 5 years % n/a Electricity Production Growth 1972-2002 Median % 2.61% Electricity Production Growth 1972-2002 StandDev % 19.87% Annual Private Investment, Power 1995 Latest $m 201 Electricity Production Growth 1997-2001 Trend last 5 years % 1.98% Annual Private Investment, Power 1994-2002 Mean $m n/a Annual Private Investment, Power 1994-2002 Median $m n/a Transmission & Distribution Losses 2001 Latest % 8.47% Annual Private Investment, Power 1994-2002 StandDev $m n/a Transmission & Distribution Trend last Losses 1971-2001 Mean % 12.83% Annual Private Investment Growth, Power 1995-2002 5 years % n/a Transmission & Distribution Losses 1971-2001 Median % 11.21% Transmission & Distribution Losses 1971-2001 StandDev % 3.89% Total Population 2003 Latest 1000s 2,640 Transmission & Distribution Losses 1997-2001 Trend last 5 years % 9.68% Annual Population Growth 2003 Latest % 0.88% Share of Rural Population 2003 Latest % 47.85% GDP Growth 2001 Latest % 2.10% Annual Rural Population Growth 2003 Latest % 0.82% people GDP Growth 1971-2003 Mean % 0.97% Population density, rural 2003 Latest per km2 715 GDP Growth 1971-2003 Median % 1.00% GDP Growth 1971-2003 StandDev % 4.32% Access to Electricity 2000 Latest % 90.00% GDP Growth 1999-2003 Trend last 5 years % 1.29% Rural population w/ access to electricity 2000 Latest % #VALUE! Annex 2: Work Sheets for Calculation of Estimates for Projected Investments 101 Mexico Annual Electricity Consumption 2001 Latest GWh 163,320 Annual Electricity Consumption 2010 Estimate GWh 284,646 Electricity Consumption Growth 1972-2001 Mean % 6.37% Annual Electricity Consumption 2015 Estimate GWh 387,561 Electricity Consumption Growth 1972-2002 Median % 6.94% Electricity Consumption Growth 1972-2003 StandDev % 2.94% Annual Private Investment, Energy 2002 Latest $m 1,184 Trend last Electricity Consumption Growth 1997-2001 5 years % 5.00% Annual Private Investment, Energy 1994-2002 Mean $m 720 Annual Private Investment, Energy 1994-2002 Median $m 496 Annual Electricity Production 2001 Latest GWh 209,618 Annual Private Investment, Energy 1994-2002 StandDev $m 692 Trend last - Electricity Production Growth 1972-2002 Mean % 6.60% Annual Private Investment Growth, Energy 1998-2002 5 years % 80.58% Electricity Production Growth 1972-2002 Median % 7.02% Electricity Production Growth 1972-2002 StandDev % 2.46% Annual Private Investment, Power 2002 Latest $m 1,184 Trend last Electricity Production Growth 1997-2001 5 years % 5.24% Annual Private Investment, Power 1998-2002 Mean $m 779 Annual Private Investment, Power 1994-2002 Median $m 260 Transmission & Distribution Losses 2001 Latest % 14.45% Annual Private Investment, Power 1994-2002 StandDev $m 821 Trend last Transmission & Distribution Losses 1971-2001 Mean % 12.57% Annual Private Investment Growth, Power 1995-2002 5 years % n/a Transmission & Distribution Losses 1971-2001 Median % 12.54% Transmission & Distribution Losses 1971-2001 StandDev % 1.33% Total Population 2003 Latest 1000s 102,291 Trend last Transmission & Distribution Losses 1997-2001 5 years % 14.32% Annual Population Growth 2003 Latest % 1.45% Share of Rural Population 2003 Latest % 24.51% GDP Growth 2001 Latest % 1.30% Annual Rural Population Growth 2003 Latest % 0.40% people GDP Growth 1971-2003 Mean % 3.72% Population density, rural 2003 Latest per km2 100 GDP Growth 1971-2003 Median % 4.20% GDP Growth 1971-2003 StandDev % 3.82% Access to Electricity 2000 Latest % 95.00% Trend last GDP Growth 1999-2003 5 years % 2.44% Rural population w/ access to electricity 2000 Latest % 82.90% 102 Study on Investment and Private Sector Participation in Power Distribution in the Latin American and Caribbean Region Nicaragua Annual Electricity Consumption 2001 Latest GWh 1,394 Annual Electricity Consumption 2010 Estimate GWh 1,865 Electricity Consumption Growth 1972-2001 Mean % 3.29% Annual Electricity Consumption 2015 Estimate GWh 2,193 Electricity Consumption Growth 1972-2002 Median % 3.24% Electricity Consumption Growth 1972-2003 StandDev % 7.42% Annual Private Investment, Energy 2000 Latest $m 115 Trend last Electricity Consumption Growth 1997-2001 5 years % 3.71% Annual Private Investment, Energy 1994-2002 Mean $m n/a Annual Private Investment, Energy 1994-2002 Median $m n/a Annual Electricity Production 2001 Latest GWh 2,473 Annual Private Investment, Energy 1994-2002 StandDev $m n/a Trend last 5 Electricity Production Growth 1972-2002 Mean % 4.87% Annual Private Investment Growth, Energy 1998-2002 years % n/a Electricity Production Growth 1972-2002 Median % 6.49% Electricity Production Growth 1972-2002 StandDev % 8.58% Annual Private Investment, Power 2002 Latest $m 115 Trend last Electricity Production Growth 1997-2001 5 years % 5.32% Annual Private Investment, Power 1998-2002 Mean $m n/a Annual Private Investment, Power 1994-2002 Median $m n/a Transmission & Distribution Losses 2001 Latest % 30.13% Annual Private Investment, Power 1994-2002 StandDev $m n/a Trend last 5 Transmission & Distribution Losses 1971-2001 Mean % 18.39% Annual Private Investment Growth, Power 1995-2002 years % n/a Transmission & Distribution Losses 1971-2001 Median % 15.62% Transmission & Distribution Losses 1971-2001 StandDev % 6.51% Total Population 2003 Latest 1000s 5,480 Trend last Transmission & Distribution Losses 1997-2001 5 years % 28.01% Annual Population Growth 2003 Latest % 2.55% Share of Rural Population 2003 Latest % 42.68% GDP Growth 2001 Latest % 2.30% Annual Rural Population Growth 2003 Latest % 1.63% people GDP Growth 1971-2003 Mean % 1.37% Population density, rural 2003 Latest per km2 117 GDP Growth 1971-2003 Median % 2.30% GDP Growth 1971-2003 StandDev % 7.15% Access to Electricity 2000 Latest % 48.00% Trend last GDP Growth 1999-2003 5 years % 0.05% Rural population w/ access to electricity 2000 Latest % #VALUE! Annex 2: Work Sheets for Calculation of Estimates for Projected Investments 103 Panama Annual Electricity Consumption 2001 Latest GWh 3,883 Annual Electricity Consumption 2010 Estimate GWh 6,355 Electricity Consumption Growth 1972-2001 Mean % 5.63% Annual Electricity Consumption 2015 Estimate GWh 8,356 Electricity Consumption Growth 1972-2002 Median % 6.19% Electricity Consumption Growth 1972-2003 StandDev % 5.04% Annual Private Investment, Energy 2000 Latest $m 396 Trend last Electricity Consumption Growth 1997-2001 5 years % 5.45% Annual Private Investment, Energy 1994-2002 Mean $m n/a Annual Private Investment, Energy 1994-2002 Median $m n/a Annual Electricity Production 2001 Latest GWh 5,124 Annual Private Investment, Energy 1994-2002 StandDev $m n/a Trend last Electricity Production Growth 1972-2002 Mean % 6.08% Annual Private Investment Growth, Energy 1998-2002 5 years % n/a Electricity Production Growth 1972-2002 Median % 5.23% Electricity Production Growth 1972-2002 StandDev % 4.85% Annual Private Investment, Power 2002 Latest $m 607 Trend last Electricity Production Growth 1997-2001 5 years % 6.05% Annual Private Investment, Power 1998-2002 Mean $m n/a Annual Private Investment, Power 1994-2002 Median $m n/a Transmission & Distribution Losses 2001 Latest % 21.78% Annual Private Investment, Power 1994-2002 StandDev $m n/a Trend last Transmission & Distribution Losses 1971-2001 Mean % 18.61% Annual Private Investment Growth, Power 1995-2002 5 years % n/a Transmission & Distribution Losses 1971-2001 Median % 19.59% Transmission & Distribution Losses 1971-2001 StandDev % 4.62% Total Population 2003 Latest 1000s 2,984 Trend last Transmission & Distribution Losses 1997-2001 5 years % 22.06% Annual Population Growth 2003 Latest % 1.49% Share of Rural Population 2003 Latest % 42.85% GDP Growth 2001 Latest % 3.90% Annual Rural Population Growth 2003 Latest % 0.77% people per GDP Growth 1971-2003 Mean % 3.45% Population density, rural 2003 Latest km2 230 GDP Growth 1971-2003 Median % 3.57% GDP Growth 1971-2003 StandDev % 4.52% Access to Electricity 2000 Latest % 76.10% Trend last GDP Growth 1999-2003 5 years % 2.50% Rural population w/ access to electricity 2000 Latest % 40.00% 104 Study on Investment and Private Sector Participation in Power Distribution in the Latin American and Caribbean Region Paraguay Annual Electricity Consumption 2001 Latest GWh 4,489 Annual Electricity Consumption 2010 Estimate GWh 11,716 Electricity Consumption Growth 1972-2001 Mean % 11.25% Annual Electricity Consumption 2015 Estimate GWh 19,965 Electricity Consumption Growth 1972-2002 Median % 11.14% Electricity Consumption Growth 1972-2003 StandDev % 8.64% Annual Private Investment, Energy 2000 Latest $m n/a Trend last 5 Electricity Consumption Growth 1997-2001 years % 0.20% Annual Private Investment, Energy 1994-2002 Mean $m n/a Annual Private Investment, Energy 1994-2002 Median $m n/a Annual Electricity Production 2001 Latest GWh 45,358 Annual Private Investment, Energy 1994-2002 StandDev $m n/a Annual Private Investment Growth, Trend last Electricity Production Growth 1972-2002 Mean % 26.60% Energy 1998-2002 5 years % n/a Electricity Production Growth 1972-2002 Median % 11.21% Electricity Production Growth 1972-2002 StandDev % 59.31% Annual Private Investment, Power 2002 Latest $m n/a Trend last 5 Electricity Production Growth 1997-2001 years % -0.87% Annual Private Investment, Power 1998-2002 Mean $m n/a Annual Private Investment, Power 1994-2002 Median $m n/a Transmission & Distribution Losses 2001 Latest % 3.33% Annual Private Investment, Power 1994-2002 StandDev $m n/a Annual Private Investment Growth, Trend last Transmission & Distribution Losses 1971-2001 Mean % 6.39% Power 1995-2002 5 years % n/a Transmission & Distribution Losses 1971-2001 Median % 4.57% Transmission & Distribution Losses 1971-2001 StandDev % 5.56% Total Population 2003 Latest 1000s 5,643 Trend last 5 Transmission & Distribution Losses 1997-2001 years % 2.60% Annual Population Growth 2003 Latest % 2.39% Share of Rural Population 2003 Latest % 42.78% GDP Growth 2001 Latest % 2.10% Annual Rural Population Growth 2003 Latest % 0.93% people per GDP Growth 1971-2003 Mean % 4.24% Population density, rural 2003 Latest km2 79 GDP Growth 1971-2003 Median % 3.98% GDP Growth 1971-2003 StandDev % 4.30% Access to Electricity 2000 Latest % 74.70% Trend last 5 Rural population w/ access to GDP Growth 1999-2003 years % 0.53% electricity 2000 Latest % #VALUE! Annex 2: Work Sheets for Calculation of Estimates for Projected Investments 105 Peru Annual Electricity Consumption 2001 Latest GWh 18,245 Annual Electricity Consumption 2010 Estimate GWh 26,708 Electricity Consumption Growth 1972-2001 Mean % 4.33% Annual Electricity Consumption 2015 Estimate GWh 33,006 Electricity Consumption Growth 1972-2002 Median % 5.27% Electricity Consumption Growth 1972-2003 StandDev % 5.85% Annual Private Investment, Energy 2002 Latest $m 278 Trend last Electricity Consumption Growth 1997-2001 5 years % 5.37% Annual Private Investment, Energy 1994-2002 Mean $m 478 Annual Private Investment, Energy 1994-2002 Median $m 451 Annual Electricity Production 2001 Latest GWh 20,778 Annual Private Investment, Energy 1994-2002 StandDev $m 219 Annual Private Investment Growth, Trend last Electricity Production Growth 1972-2002 Mean % 4.36% Energy 1998-2002 5 years % -18.38% Electricity Production Growth 1972-2002 Median % 5.19% Electricity Production Growth 1972-2002 StandDev % 4.61% Annual Private Investment, Power 2002 Latest $m 278 Trend last Electricity Production Growth 1997-2001 5 years % 5.37% Annual Private Investment, Power 1998-2002 Mean $m 538 Annual Private Investment, Power 1994-2002 Median $m 477 Transmission & Distribution Losses 2001 Latest % 10.76% Annual Private Investment, Power 1994-2002 StandDev $m 356 Annual Private Investment Growth, Trend last Transmission & Distribution Losses 1971-2001 Mean % 12.71% Power 1995-2002 5 years % 21.88% Transmission & Distribution Losses 1971-2001 Median % 12.03% Transmission & Distribution Losses 1971-2001 StandDev % 3.04% Total Population 2003 Latest 1000s 27,148 Trend last Transmission & Distribution Losses 1997-2001 5 years % 12.65% Annual Population Growth 2003 Latest % 1.48% Share of Rural Population 2003 Latest % 26.13% GDP Growth 2001 Latest % 3.97% Annual Rural Population Growth 2003 Latest % 0.07% people per GDP Growth 1971-2003 Mean % 2.46% Population density, rural 2003 Latest km2 191 GDP Growth 1971-2003 Median % 2.87% GDP Growth 1971-2003 StandDev % 5.58% Access to Electricity 2000 Latest % 73.00% Trend last Rural population w/ access to GDP Growth 1999-2003 5 years % 2.56% electricity 2000 Latest % 30.00% 106 Study on Investment and Private Sector Participation in Power Distribution in the Latin American and Caribbean Region Uruguay Annual Electricity Consumption 2001 Latest GWh 6,411 Annual Electricity Consumption 2010 Estimate GWh 9,254 Electricity Consumption Growth 1972-2001 Mean % 4.16% Annual Electricity Consumption 2015 Estimate GWh 11,347 Electricity Consumption Growth 1972-2002 Median % 4.63% Electricity Consumption Growth 1972-2003 StandDev % 3.63% Annual Private Investment, Energy 2002 Latest $m 330 Trend last Electricity Consumption Growth 1997-2001 5 years % 4.29% Annual Private Investment, Energy 1994-2002 Mean $m n/a Annual Private Investment, Energy 1994-2002 Median $m n/a Annual Electricity Production 2001 Latest GWh 9,252 Annual Private Investment, Energy 1994-2002 StandDev $m n/a Trend last Electricity Production Growth 1972-2002 Mean % 5.87% Annual Private Investment Growth, Energy 1998-2002 5 years % n/a Electricity Production Growth 1972-2002 Median % 5.37% Electricity Production Growth 1972-2002 StandDev % 16.85% Annual Private Investment, Power 2002 Latest $m n/a Trend last Electricity Production Growth 1997-2001 5 years % 8.73% Annual Private Investment, Power 1998-2002 Mean $m n/a Annual Private Investment, Power 1994-2002 Median $m n/a Transmission & Distribution Losses 2001 Latest % 15.97% Annual Private Investment, Power 1994-2002 StandDev $m n/a Trend last Transmission & Distribution Losses 1971-2001 Mean % 15.15% Annual Private Investment Growth, Power 1995-2002 5 years % n/a Transmission & Distribution Losses 1971-2001 Median % 15.28% Transmission & Distribution Losses 1971-2001 StandDev % 3.52% Total Population 2003 Latest 1000s 3,380 Trend last Transmission & Distribution Losses 1997-2001 5 years % 17.45% Annual Population Growth 2003 Latest % 0.56% Share of Rural Population 2003 Latest % 7.46% GDP Growth 2001 Latest % 2.50% Annual Rural Population Growth 2003 Latest % -2.19% people per GDP Growth 1971-2003 Mean % 1.54% Population density, rural 2003 Latest km2 20 GDP Growth 1971-2003 Median % 1.56% GDP Growth 1971-2003 StandDev % 5.01% Access to Electricity 2000 Latest % 98.00% Trend last GDP Growth 1999-2003 5 years % -3.24% Rural population w/ access to electricity 2000 Latest % 74.04% Annex 2: Work Sheets for Calculation of Estimates for Projected Investments 107 Venezuela, RB Annual Electricity Consumption 2001 Latest GWh 64,178 Annual Electricity Consumption 2010 Estimate GWh 114,330 Electricity Consumption Growth 1972-2001 Mean % 6.63% Annual Electricity Consumption 2015 Estimate GWh 157,572 Electricity Consumption Growth 1972-2002 Median % 6.60% Electricity Consumption Growth 1972-2003 StandDev % 5.80% Annual Private Investment, Energy 2000 Latest $m 30 Trend last Electricity Consumption Growth 1997-2001 5 years % 2.67% Annual Private Investment, Energy 1994-2002 Mean $m n/a Annual Private Investment, Energy 1994-2002 Median $m n/a Annual Electricity Production 2001 Latest GWh 89,973 Annual Private Investment, Energy 1994-2002 StandDev $m n/a Annual Private Investment Growth, Trend last Electricity Production Growth 1972-2002 Mean % 6.60% Energy 1998-2002 5 years % n/a Electricity Production Growth 1972-2002 Median % 6.01% Electricity Production Growth 1972-2002 StandDev % 4.65% Annual Private Investment, Power 1998 Latest $m 133 Trend last Electricity Production Growth 1997-2001 5 years % 3.57% Annual Private Investment, Power 1998-2002 Mean $m n/a Annual Private Investment, Power 1994-2002 Median $m n/a Transmission & Distribution Losses 2001 Latest % 25.28% Annual Private Investment, Power 1994-2002 StandDev $m n/a Annual Private Investment Growth, Trend last Transmission & Distribution Losses 1971-2001 Mean % 16.52% Power 1995-2002 5 years % n/a Transmission & Distribution Losses 1971-2001 Median % 16.09% Transmission & Distribution Losses 1971-2001 StandDev % 4.28% Total Population 2003 Latest 1000s 25,549 Trend last Transmission & Distribution Losses 1997-2001 5 years % 23.19% Annual Population Growth 2003 Latest % 1.81% Share of Rural Population 2003 Latest % 12.36% GDP Growth 2001 Latest % -9.22% Annual Rural Population Growth 2003 Latest % -0.11% people per GDP Growth 1971-2003 Mean % 1.29% Population density, rural 2003 Latest km2 0 GDP Growth 1971-2003 Median % 1.48% GDP Growth 1971-2003 StandDev % 4.92% Access to Electricity 2000 Latest % 94.00% Trend last Rural population w/ access to GDP Growth 1999-2003 5 years % -3.64% electricity 2000 Latest % 73.00% Bibliography Ayala, Ulpiano and Jaime Millán. "Sustainability of Power Sector Reform in Latin America, The reform in Colombia", Inter-American Development Bank, Washington, D.C.,2002. Bacon, Richard. "Global Energy Sector Reform in Developing Countries: A scoreboard", World Bank.1999. Barbu, Alain. "Reforming Bolivia's power sector", World Bank, OED. 1999. Bayliss, Kate. "Privatisation of electricity distribution: some economic, social and political perspectives" Public Services International Research Unit (PSIRU). University of Greenwich. London, United Kingdom. April 2001. Benavides, Juan. "Reflexiones en torno a las reformas del sector eléctrico en América Latina", Inter-American Development Bank, Washington, D.C., 2002. Bouille, Daniel, Hilda Dubrovsky and Crescencia Maurer. "Argentina: Market-Driven Reform of the Electricity Sector (2002)." WRI ­ Power Politics. Cano, Oswald L. "Investment Climate in Latin America, Rule of Law/Lessons Learned." Public/Private Summit on Investment Climate. Washington, D.C., December 2003. Chisari, Omar / Estache, Antonio / Romero, Carlos. "Winners and Losers from Utility Privatization in Argentina: Lessons from a General Equilibrium Model." World Bank Working Paper No. 1824, World Bank, Washington, D.C., January 1997. Dubash, Navroz K. "Power Politics: Equity and Environment in Electricity Reform", World Resources Institute, Washington, D.C., 2002. Durand, Philippe J.P. "Bolivia ­ Power Sector Reform Technical Assistance Project", World Bank Energy Cluster (LCSFE). 1995. Durand, Philippe J.P. "Bolivia ­ Power Sector Reform Technical Assistance Project", World Bank, LAC. 2001. Energy Information Administration (EIA). "Country Analysis Brief: Argentina." http://www.eia.doe.gov/emeu/cabs/argentna.html, Energy Information Administration. Washington, D.C., January 2004. 109 110 Study on Investment and Private Sector Participation in Power Distribution in the Latin American and Caribbean Region ESMAP. Bolivia ­ Introducing Competition into Electricity Supply Industry in Developing Countries: Lessons from Bolivia, UNDP / World Bank. 2002. Espinasa, Ramón. "Marco Institucional de los Sectores Electricidad y Telecomunicaciones en América Latina." Research Department, Inter-American Development Bank. Washington, D.C., January 2001. Estache, Antonio / Andres Gomez-Lobo / Danny Leipziger. "Utility Privatization and the Needs of the Poor in Latin America: Have We Learned Enough To Get it Right?" Policy Research Working Paper 2407. World Bank. Washington, D.C., August 2000. Estache, Antonio / Foster, Vivien / Wodon, Quentin. "Making Infrastructure Reform Work for the Poor: Policy Options Based on Latin America's Experience." The CEPAL Review, World Bank. Washington D.C., December 2002. Estache, Antonio / Rodriguez-Pardina, Martin. "Light and Lightening at the End of the Public Tunnel: The Reform of the Electricity Sector in the Southern Cone," World Bank Working Paper, Washington D.C., May 1998. Estache, Antonio and Martin Rodriguez-Pardina. "Regulatory Lessons from Argentina's Power ", World Bank, Office of the Director, (CGFDR). 1996. Fay, Marianne and Tito Yepes. "Investing in Infrastructure ­ What is Needed from 2000 to 2010." World Bank, Washington, D.C., 2003. Feler, Leo. "Electricity Privatization in Argentina." Mimeo. World Bank. Washington, D.C., January 2001. Fischer, Ronald / Gutierrez, Rodrigo / Serra, Pablo. "The Effects of Privatization on Firms and on Social Welfare: The Chilean Case." Research Network Working Paper #R- 456, Latin American Research Network, Inter-American Development Bank. Santiago de Chile, May 2003. Graham, Hugh Trentham. "Bolivia ­ Restructuring and capitalization of the electricity supply industry: an outline for change", World Bank, IEN. 1995. Graham, Hugh Trentham. "Bolivia ­ Power Rehabilitation Project", World Bank, CMU(LCC6C). 1998. Hall, David. "Electricity in Latin America." Public Services International Research Unit PSIRU). University of Greenwich. London, United Kingdom. July 2004. Bibliography 111 Harris, Clive. "Private Participation in Infrastructure in Developing Countries - Trends, Impacts, and Policy Lessons", World Bank Working Papers, World Bank. Washington D.C., April 2003. Haselip, James. "The globalisation of utilities liberalisation: Impacts upon the poor in Latin America." CSGR Working Paper No. 138/04. Centre for the Study of Globalisation and Regionalisation (CSGR), University of Warwick, Coventry, United Kingdom. June 2004. Hugh, Graham Trentham. "California Power Crisis, Lessons for Developing Countries", World Bank. 2001. International Energy Agency. World Energy Investment Outlook. Paris. 2003. Izaguirre, Ada Karina / Hahn, Shelly / Khuu, Kathy / Nellis, Jonathan. "Private Participation in Infrastructure: Trends in Developing Countries in 1990-2001." Private Participation in Infrastructure (PPI) Project. World Bank, Washington D.C., 2003. Izaguirre, Ada Karina. "Private participation in the electricity sector: recent trends", World Bank, Fin & Private Sector Develop VP. 1998. Izaguirre, Ada Karina. "Private Participation in the Electricity Sector: Recent Trends." Private Participation in Infrastructure (PPI) Project. World Bank. Washington D.C., September1998. Izaguirre, Ada Karina. "Private Private Infrastructure: A Review of Projects with Private Participation, 1990­2001." Private Participation in Infrastructure (PPI) Project. World Bank. Washington D.C., June 2002. Izaguirre, Ada Karina. "Private Private Infrastructure: A Review of Projects with Private Participation, 1990­2001." Private Participation in Infrastructure (PPI) Project. World Bank. Washington D.C., October 2002. Izaguirre, Ada Karina. "Private Infrastructure: Activity Down by 30 Percent in 2002." Private Participation in Infrastructure (PPI) Project. World Bank. Washington D.C., February 2004. Kessides, Ioannis. "Reforming Infrastructure: Privatization, Regulation, and Competition." World Bank Policy Research Report, World Bank, Washington, D.C., January 2004. 112 Study on Investment and Private Sector Participation in Power Distribution in the Latin American and Caribbean Region Kryan, O'Sullivan, Estache and Martin Rodriguez-Pardina. "Light and lightning at the end of the tunnel; Reform of the Electricity Sector in the Southern Cone, An overview of recent privatization experience in Brazil, Argentina and Chile", World Bank, LAC. 1999. Lalor, Peter and Hernán Garcia. "Reshaping Power Markets ­ Lessons from Chile and Argentina." World Bank. Washington, D.C., 1996. Lamech, Rangit and Kazim Saeed. "What International Investors Look for when Investing in Developing Countries." World Bank. Washington, D.C., 2003. Latin American Power Watch. Monthly Newsletter. Washington, D.C. Levitsky, Jacob. "Bolivia ­ Power Rehabilitation Project", World Bank, CMU (LCC6C). 1987. Levitsky, Jacob. "Bolivia ­ La Paz private power technical assistance", World Bank, IEN. 1990. Littlechild, Stephen. "Privatization, Competition and Regulation in the British Electricity Industry, With Implications for Developing Countries", World Bank. 2000. Millán, Jaime / Lora, Eduardo / Micco, Alejandro. "Sustainability of the Electricity Sector Reforms in Latin America." Inter-American Development Bank. Santiago de Chile, March 2001. Millán, Jaime. "The Second Generation of Power Exchanges: Lessons for Latin America", Inter-American Development Bank, Washington, D.C., 1999. Mota, Raffaella. "The Restructuring and Privatization of Electricity Distribution and Supply Business in Brazil: A Social Cost-Benefit Analysis." DAE Working Paper 0309. University of Cambridge, Department of Applied Economics, Cambridge, United Kingdom, January 2003. Newbery, David. "Privatization, Restructuring and Regulation of Network Utilities." MIT Press, Cambridge, MA., July 1999. O'Sullivan, Kryan and Luis E. Gutierrez. N/A. "Bolivia: Power Sector Reform", World Bank, LAC. Organización Latinoamericana de Energía (OLADE). "ELECTRICIDAD/ ELECTRICITY 2001." Quito-Ecuador, http://www.olade.org/sieehome/estadisticas/electricidad.html. 2003. Bibliography 113 PPI Glossary. Private Participation in Infrastructure (PPI) Project. World Bank. Washington D.C., http://ppi.worldbank.org/glossary.asp. Private Participation in Infrastructure (PPI) Database. Washington, D.C.,http://ppi.worldbank.org/. 2004. Rosenzweig, Michael, Sarah Potts Voll and Carlos Pabon-Agudelo. "Power Sector Reform: Experiences from the Road." The Electricity Journal. 2004. Rufin, Carlos. "Sustainability of Reform in Latin America's Small Countries", Inter- American Development Bank, Washington, D.C., 2002. Solar, Fundación. "Sustainability of Power Sector Reform in Latin America, The Reform in Guatemala", Inter-American Development Bank, Washington, D.C., 2002. Tenenbaum, Bernard. "The Real World of Power Sector Regulation", World Bank, Fin & Private Sector Develop VP. 1995. Tomiak, Richard and Jaime Millán. "Sustainability of Reform in Central America: Market Convergence and Regional Integration", Inter-American Development Bank, Washington, D.C., 2002. Torero, Maximo / Pasco-Font, Alberto. "The Social Impact of Privatization and Regulation of Utilities in Peru," United Nations University, World Institute for Development Economics Research, Discussion Paper No.2001/17, New York, December 2001. Von der Fehr, Nils-Henrik M. and Jose Jaime Millán. "Sustainability of Power Sector Reform in Latin America, An Analytical Framework", Inter-American Development Bank, Washington, D.C., 2001. Walker, Ian and Juan Benavides. "Sustainability of Power Sector Reform in Latin America, The Reform in Honduras", Inter-American Development Bank, Washington, D.C., 2002. World Energy Council. "Energy Markets in Transition: The Latin American and Caribbean Experience." London. 2001. World Bank/PPIAF. "Emerging Lessons in Private Provision of Infrastructure Services in Rural Areas: Water and Electricity Services in Gabon.," World Bank. Washington, D.C., September 2002. World Development Indicators (WDI). World Bank, Data & Statistics. Washington D.C., http://www.worldbank.org/data/wdi2004/. 2004. ESMAP TECHNICAL PAPER 089 Study on Investment and Private Sector Participation in Power Distribution in Latin America and the Caribbean Region December 2005 Papers in the ESMAP Technical Series are discussion documents, not final project reports. They are subject to the same copyright as other ESMAP publications. 114 Study on Investment and Private Sector Participation in Power Distribution in the Latin American and Caribbean Region Joint UNDP/World Bank ENERGY SECTOR MANAGEMENT ASSISTANCE PROGRAMME (ESMAP) LIST OF TECHNICAL PAPER SERIES Region/Country Activity/Report Title Date Number SUB-SAHARAN AFRICA (AFR) Africa Power Trade in Nile Basin Initiative Phase II (CD Only): 04/05 067/05 Part I: Minutes of the High-level Power Experts Meeting; and Part II: Minutes of the First Meeting of the Nile Basin Ministers Responsible for Electricity Cameroon Decentralized Rural Electrification Project in Cameroon 01/05 087/05 Chad Revenue Management Seminar. Oslo, June 25-26, 2003. (CD Only) 06/05 075/05 Côte d'Ivoire Workshop on Rural Energy and Sustainable Development, 04/05 068/05 January 30-31, 2002. (French Only) Ethiopia Phase-Out of Leaded Gasoline in Oil Importing Countries of 12/03 038/03 Sub-Saharan Africa: The Case of Ethiopia - Action Plan. Sub-Saharan Petroleum Products Transportation Corridor: Analysis 03/03 033/03 And Case Studies Phase-Out of Leaded Gasoline in Sub-Saharan Africa 04/02 028/02 Energy and Poverty: How can Modern Energy Services Contribute to Poverty Reduction 03/03 032/03 East Africa Sub-Regional Conference on the Phase-out Leaded Gasoline in 11/03 044/03 East Africa. June 5-7, 2002. Ghana Poverty and Social Impact Analysis of Electricity Tariffs 12/05 088/05 Kenya Field Performance Evaluation of Amorphous Silicon (a-Si) Photovoltaic Systems in Kenya: Methods and Measurement in Support of a Sustainable Commercial Solar Energy Industry 08/00 005/00 The Kenya Portable Battery Pack Experience: Test Marketing an Alternative for Low-Income Rural Household Electrification 12/01 05/01 Malawi Rural Energy and Institutional Development 04/05 069/05 Mali Phase-Out of Leaded Gasoline in Oil Importing Countries of 12/03 041/03 Sub-Saharan Africa: The Case of Mali - Action Plan. (French) Mauritania Phase-Out of Leaded Gasoline in Oil Importing Countries of 12/03 040/03 Sub-Saharan Africa: The Case of Mauritania - Action Plan. (French) Nigeria Phase-Out of Leaded Gasoline in Nigeria 11/02 029/02 Nigerian LP Gas Sector Improvement Study 03/04 056/04 Taxation and State Participation in Nigeria's Oil and Gas Sector 08/04 057/04 Regional Second Steering Committee: The Road Ahead. Clean Air Initiative In Sub-Saharan African Cities. Paris, March 13-14, 2003. 12/03 045/03 Lead Elimination from Gasoline in Sub-Saharan Africa. Sub-regional Conference of the West-Africa group. Dakar, Senegal March 26-27, 2002 (French only) 12/03 046/03 1998-2002 Progress Report. The World Bank Clean Air Initiative 02/02 048/04 in Sub-Saharan African Cities. Working Paper #10 (Clean Air Initiative/ESMAP) Landfill Gas Capture Opportunity in Sub Saharan Africa 06/05 074/05 The Evolution of Enterprise Reform in Africa: From 11/05 084/05 State-owned Enterprises to Private Participation in Infrastructure --and Back? Senegal Regional Conference on the Phase-Out of Leaded Gasoline in Sub-Saharan Africa 03/02 022/02 - 2 - Region/Country Activity/Report Title Date Number Senegal Elimination du Plomb dans I'Essence en Afrique Sub-Saharienne Conference Sous Regionales du Groupe Afrique de I'Quest. Dakar, Senegal. March 26-27, 2002. 12/03 046/03 Alleviating Fuel Adulteration Practices in the Downstream Oil Sector in Senegal 09/05 079/05 South Africa South Africa Workshop: People's Power Workshop. 12/04 064/04 Swaziland Solar Electrification Program 20012010: Phase 1: 20012002 (Solar Energy in the Pilot Area) 12/01 019/01 Tanzania Mini Hydropower Development Case Studies on the Malagarasi, Muhuwesi, and Kikuletwa Rivers Volumes I, II, and III 04/02 024/02 Phase-Out of Leaded Gasoline in Oil Importing Countries of 12/03 039/03 Sub-Saharan Africa: The Case of Tanzania - Action Plan. Uganda Report on the Uganda Power Sector Reform and Regulation Strategy Workshop 08/00 004/00 WEST AFRICA (AFR) Regional Market Development 12/01 017/01 EAST ASIA AND PACIFIC (EAP) Cambodia Efficiency Improvement for Commercialization of the Power Sector 10/02 031/02 TA For Capacity Building of the Electricity Authority 09/05 076/05 China Assessing Markets for Renewable Energy in Rural Areas of Northwestern China 08/00 003/00 Technology Assessment of Clean Coal Technologies for China Volume I--Electric Power Production 05/01 011/01 Technology Assessment of Clean Coal Technologies for China Volume II--Environmental and Energy Efficiency Improvements for Non-power Uses of Coal 05/01 011/01 Technology Assessment of Clean Coal Technologies for China Volume III--Environmental Compliance in the Energy Sector: Methodological Approach and Least-Cost Strategies 12/01 011/01 Philippines Rural Electrification Regulation Framework. (CD Only). 10/05 080/05 Thailand DSM in Thailand: A Case Study 10/00 008/00 Development of a Regional Power Market in the Greater Mekong Sub-Region (GMS) 12/01 015/01 Vietnam Options for Renewable Energy in Vietnam 07/00 001/00 Renewable Energy Action Plan 03/02 021/02 Vietnam's Petroleum Sector: Technical Assistance for the Revision 03/04 053/04 of the Existing Legal and Regulatory Framework SOUTH ASIA (SAS) Bangladesh Workshop on Bangladesh Power Sector Reform 12/01 018/01 Integrating Gender in Energy Provision: The Case of Bangladesh 04/04 054/04 Opportunities for Women in Renewable Energy Technology Use 04/04 055/04 In Bangladesh, Phase I - 3 - Region/Country Activity/Report Title Date Number EUROPE AND CENTRAL ASIA (ECA) Russia Russia Pipeline Oil Spill Study 03/03 034/03 Uzbekistan Energy Efficiency in Urban Water Utilities in Central Asia 10/05 082/05 MIDDLE EASTERN AND NORTH AFRICA REGION (MENA) Regional Roundtable on Opportunities and Challenges in the Water, Sanitation 02/04 049/04 And Power Sectors in the Middle East and North Africa Region. Summary Proceedings, May 26-28, 2003. Beit Mary, Lebanon. (CD) Morocco Amélioration de d´Efficacité Energie: Environnement de la Zone Industrielle de Sidi Bernoussi, Casablanca 12/05 085/05 LATIN AMERICA AND THE CARIBBEAN REGION (LCR) Brazil Background Study for a National Rural Electrification Strategy: 03/05 066/05 Aiming for Universal Access Bolivia Country Program Phase II: Rural Energy and Energy Efficiency 05/05 072/05 Report on Operational Activities Chile Desafíos de la Electrificación Rural 10/05 082/05 Ecuador Programa de Entrenamiento a Representantes de Nacionalidades Amazónicas en Temas Hidrocarburíferos 08/02 025/02 Guatemala Evaluation of Improved Stove Programs: Final Report of Project 12/04 060/04 Case Studies Mexico Energy Policies and the Mexican Economy 01/04 047/04 Nicaragua Aid-Memoir from the Rural Electrification Workshop (Spanish only) 03/03 030/04 Sustainable Charcoal Production in the Chinandega Region 04/05 071/05 Regional Regional Electricity Markets Interconnections -- Phase I Identification of Issues for the Development of Regional Power Markets in South America 12/01 016/01 Regional Electricity Markets Interconnections -- Phase II Proposals to Facilitate Increased Energy Exchanges in South America 04/02 016/01 Population, Energy and Environment Program (PEA) Comparative Analysis on the Distribution of Oil Rents (English and Spanish) 02/02 020/02 Estudio Comparativo sobre la Distribución de la Renta Petrolera Estudio de Casos: Bolivia, Colombia, Ecuador y Perú 03/02 023/02 Latin American and Caribbean Refinery Sector Development Report ­ Volumes I and II 08/02 026/02 The Population, Energy and Environmental Program (EAP) (English and Spanish) 08/02 027/02 Bank Experience in Non-energy Projects with Rural Electrification 02/04 052/04 Components: A Review of Integration Issues in LCR Supporting Gender and Sustainable Energy Initiatives in 12/04 061/04 Central America - 4 - Region/Country Activity/Report Title Date Number Energy from Landfill Gas for the LCR Region: Best Practice and 01/05 065/05 Social Issues (CD Only) Study on Investment and Private Sector Participation in Power 12/05 089/05 Distribution in Latin America and the Caribbean Region GLOBAL Impact of Power Sector Reform on the Poor: A Review of Issues and the Literature 07/00 002/00 Best Practices for Sustainable Development of Micro Hydro Power in Developing Countries 08/00 006/00 Mini-Grid Design Manual 09/00 007/00 Photovoltaic Applications in Rural Areas of the Developing World 11/00 009/00 Subsidies and Sustainable Rural Energy Services: Can we Create Incentives Without Distorting Markets? 12/00 010/00 Sustainable Woodfuel Supplies from the Dry Tropical Woodlands 06/01 013/01 Key Factors for Private Sector Investment in Power Distribution 08/01 014/01 Cross-Border Oil and Gas Pipelines: Problems and Prospects 06/03 035/03 Monitoring and Evaluation in Rural Electrification Projects: 07/03 037/03 A Demand-Oriented Approach Household Energy Use in Developing Countries: A Multicountry 10/03 042/03 Study Knowledge Exchange: Online Consultation and Project Profile 12/03 043/03 from South Asia Practitioners Workshop. Colombo, Sri Lanka, June 2-4, 2003 Energy & Environmental Health: A Literature Review and 03/04 050/04 Recommendations Petroleum Revenue Management Workshop 03/04 051/04 Operating Utility DSM Programs in a Restructuring Electricity Sector 12/05 058/04 Evaluation of ESMAP Regional Power Trade Portfolio 12/04 059/04 (TAG Report) Gender in Sustainable Energy Regional Workshop Series: 12/04 062/04 Mesoamerican Network on Gender in Sustainable Energy (GENES) Winrock and ESMAP Women in Mining Voices for a Change Conference (CD Only) 12/04 063/04 Renewable Energy Potential in Selected Countries: Volume I: 04/05 070/05 North Africa, Central Europe, and the Former Soviet Union, Volume II: Latin America Renewable Energy Toolkit Needs Assessment 08/05 077/05 Portable Solar Photovoltaic Lanterns: Performance and 08/05 078/05 Certification Specification and Type Approval Crude Oil Prices Differentials and Differences in Oil Qualities: A Statistical Analysis 10/05 081/05 Operating Utility DSM Programs in a Restructuring Electricity Sector 12/05 086/05 Last report added to this list: ESMAP Technical Paper 089/05.