Key Factors for Private Sector Investment in Power Distribution
This paper was produced at the request of the Government of Uganda, as part of the ESMAP Power Restructuring Implementation Strategy in the country. On looking at the key factors that influence the private sector's evaluation of, and investmen...
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| Format: | ESMAP Paper |
| Language: | English en_US |
| Published: |
Washington, DC
2014
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2001/08/1735285/key-factors-private-sector-investment-power-distribution http://hdl.handle.net/10986/20291 |
| Summary: | This paper was produced at the request
of the Government of Uganda, as part of the ESMAP Power
Restructuring Implementation Strategy in the country. On
looking at the key factors that influence the private
sector's evaluation of, and investment in power
distribution firms worldwide, and, on the implications of
the optimal role of multilateral institutions such as the
Bank, this report provides the results of a study that Price
Waterhouse Coopers Securities implemented on the subject, to
assist the Bank in developing its policies regarding power
distribution. Fundamental differences between distribution,
and generation companies are highlighted: distribution
companies must concern themselves with demand growth, retail
markets, and customer concerns; while generation firms, tend
to focus more on technical, and performance issues (owner
separation from each segment of the industry, generally
increase efficiency, and minimize undue market power).
Surveys on overall country status, regulatory and legal
framework, business practices and financial performances
worldwide, show that while laws, and legislative systems are
important factors (in their ability to repatriate funds -
though arguably a part of the investment climate), financial
performance stood by far, as the most important factor,
i.e., the return on equity is critical, especially for
publicly held investors, who must assess the impact of
investments on stocks valuation. The role of multilateral
institutions was seen as important in that it improves the
investment climate through technical assistance, in that it
promotes processes to achieve privatization, and
restructuring country wise, and, in that it provides
financing for power sector projects that require subsidies. |
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