Energy Sector Monitoring: towards a Regional Approach Ana Otilia Nuțu Expert Forum (EFOR) June 6, 2012

 Context  Romania’s energy  Why the project  The first project (“Citizens for energy”)  Outcomes  Lessons learned  Current project (“Policy and regulation”)  Sustainability efforts  Expanding in the region Contents

Romania’s energy, why the project  Energy sector: very fast reforms ( ) then quick reversal (after accession 2007) – likely also in the region  Deregulation, liberalization, competition, modern legislation and regulatory framework  Watchdog: chose initially one institution (regulator ANRE), to monitor evolution in time, benchmark wit EU – follows the evolution of sector  Major issues: governance, corruption Ro vs EU: reforms in (gas – left, electricity – right). Ro – the only country that reverses previous reforms

“Citizens for energy” (1)  Used a very clear methodology (WB, Inogate, adapted to Ro)  Followed it consistently, 2 reports, peer review (Ro, foreign)  Compared regulator with itself (scorecard) and key EU regulators  2 reports, 2 conferences, excellent attendance; reports used by EU, WB, IMF

“Citizens for energy” (1)  External monitoring, no collaboration with the monitored entity  Met ANRE, discussed, but no efforts from ANRE to change status quo – but unrealistic to expect many public sector entities to be reformist, particularly after EU accession  Initial outcomes: NGO self development; partner for policy discussion, excellent contacts with stakeholders (except ANRE). Broader outcomes: some improvements to the law & practice, need constant pressure  Weaknesses: can cause change only to the extent there is public pressure; stakeholders have little courage to support same ideas publicly, despite discussions (reliance on IMF, no courage to tell the truth to shareholders abroad)

“Policy and regulation” (2)  Designed a more flexible structure (continue monitoring of ANRE, share experiences with NGOs in the region, general monitoring of sector, couple with IFI efforts) – “whatever works, is good”  Quick reaction to developments in the sector (media connection)  Coupling and co-financing with regional projects (Romania, Serbia, Moldova, Croatia, several projects to monitors broader “quantitative indicators of corruption”)  Key challenge – to mobilize “real” stakeholders (companies, consumers) to demand better governance

Moving forward in the Region  Seeking contacts for similar monitoring exercises in the region  Problems are similar, EU energy sector rules apply in new members and neighbors, similar institutions; regional comparisons possible  Peer reviewers in our Panel of experts – expertise in the region  Coupling with other regional projects for info and contacts  Under preparation – guideline for watchdogs in the region (June 15) – to be disseminated, also on  Partnership: Regional projects have better prospects for financing. Coupling for co-financing, consistent comparisons, sharing of experiences across countries for sustainability.

Thank you!