Best Practices for Encouraging Private Sector Investment and Competition in the Power Industry

Abstract

This article identifies and recommends the “best practices” and specific steps that developing countries can take to encourage both private sector investment and competition in the power sector. It is based on a study done for the Asian Development Bank. Overall, the objective is to identify what that private sector participation can provide benefits to consumers of power. The five most important steps are: getting the investment framework right; deciding on the goals of restructuring and the ideal industry structure; preparing the players to participate in a competitive market; privatizing existing and new assets; ensuring that the competitive market is implemented properly.