1. Private Sector Appetite for REM Infrastructure Requirements Anthony Marsh, Director, Power & Energy Utilities Rome, 24 March 2003

2. What am I going to say? 1.Current status of global power market 2.REM requirements 3.Requirements for success 4.Donors’ Role 5. Next steps?

3. 1. Global Power Market Consolidation (EdF / RWE) No BanksNo Investors Enron Trading credit US / UK / Latin America

4. Transmission/Interconnections Rehabilitation New generation Introducing competition Trading 2. REM Requirements How? Still possibleMaritza East III

5. ME III Financing Structure

6. Transmission / Interconnection Transmission Regulated monopoly – access finance (HEP) Non-sovereign – Not project finance Few investors Interconnection Need Offtake for project finance “Externalities” difficult to include for stand-alone financing Non-sovereign difficult Few investors Commercial skills?

7. 3. Requirements for Success Some Light New Investors (ENEL, PPC) Local banks very liquid Non-sovereign (e.g. Transelectrica, Romania) Still need: - Offtake agreements Fuel Supply Agreements Stable Regulation Government Support Undertakings? Management Contracts?

8. 4. Donors’ role Increasingly important due to few investors Feasibility studies Regulatory support Financial advice (e.g. Maritza) Legal advice Guarantees (Slovenske Elektrarne) Performance / Partial Risk Guarantees

9. 5. Next Steps? Build on demonstration effect (minimum requirements) Identify specific projects (WB study) - Regional v Local Social impact (EBRD affordability) Smaller private sector forum? Trading clearing Bank?

10. www.ebrd.com Contacts at the EBRD Power & Energy Utilities Tony MarshTel:+44 20 7338 7660 Chikako KunoTel:+44 20 7338 7217 Louis BorgoTel:+44 20 7338 6547 Aygen YayikogluTel:+44 20 7338 7619