1. RETHINKING POWER SECTOR REFORM IN SUB-SAHARAN AFRICA & SOUTH ASIA
Catrina Godinho
Management Programme in
Infrastructure Reform & Regulation

2. 25 YEARS OF POWER SECTOR REFORMS
IN SUB-SAHARAN AFRICA & SOUTH ASIA
Corporatization & Commercialization
Legislation
Independent Regulation
Private Sector Participation
Restructuring
Divestiture Assets
Competition
THE STANDARD 1990s MODEL OF POWER SECTOR REFORM
In Sub-Saharan Africa & South Asia , power sector reforms have proven much more difficult than anticipated, and remain a work in progress in some countries while having completely stalled or reversed in many others.

3. Catch 22 – Strategic Reforms Essential
THE STATUS OF POWER SECTOR DEVELOPMENT
IN SUB-SAHARAN AFRICA & SOUTH ASIA
SUB-SAHARAN AFRICA
48 Countries
1 billion people
90 GW installed capacity
South Africa accounts for 43 GW
~ 60% without access
48% of the global population without access
SOUTH ASIA
8 countries
1.74 billion people
350 GW installed capacity,
India accounts for 305 GW
~ 25% without access
33% of the global population without access
Pivotal Challenges: Attracting private sector investment & improving utility performance
Catch 22 – Strategic Reforms Essential

4. THE STATUS OF POWER SECTOR REFORM
IN SUB-SAHARAN AFRICA & SOUTH ASIA
SUB-SAHARAN AFRICA
19 countries, 3 variations, 5 regulators
19 countries, 5 variations, 13 regulators
10 countries, 10 variations, 10 regulators

5. THE STATUS OF POWER SECTOR REFORM
IN SUB-SAHARAN AFRICA & SOUTH ASIA
SOUTH ASIA
1 countries, 0 variations, 0 regulators
3 countries, 3 variations, 2 regulators
4 countries, 4 variations, 4 regulators

6. REFLECTING ON THE EXPERIENCE OF POWER SECTOR REFORMS
IN SUB-SAHARAN AFRICA & SOUTH ASIA
For non-OECD countries, the drivers, context and process of power sector reform have been vastly different to OECD countries and each other.
Broad consensus that a normative and prescriptive ‘one size fits all’ approach, like of the ‘standard model’, is not appropriate given this heterogeneity.
Power sector reform is not simply a techno-economic problem, but a political economy challenge.
Initial political economy research has begun to identify determinative political economy contextualities and offer a number of lessons.

7. Socio-Political Conditions Institutional Environment
Determinative Political Economy Contextualities
Macro-Economic Circumstances
- Fiscal crises, dependence on aid/loans, high national debt, SAPs
- Low socio-economic development, high inequality and poverty
- Undiversified economic structure, high unemployment, volatile inflation, pervasive subsidies, undeveloped private sector
- Resource discovery
Socio-Political Conditions
- Current/recent civil war, proxy wars, regional/political instability, ethnic conflict
- Regime - authoritarian/ nominal democracy
- Strong socialist (sometimes communist), anti-privitisation, and labour political blocs
- High socio-economic inequality (ethnic, racial, class) parallels distribution of political and economic power/influence/access
Institutional Environment
- Formal institutions weak and unreflective of real distribution of power,
- Lack broad support/legitimacy
- Institutional capacity weak, politicised distribution of limited resources
- Close alignment of political and economic power, facilitates corruption
Power Sector
- Highly politicised, political interference, strategic sector
- Traditional Industry Model/ Hybrid Model
- Large capital requirements – rent seeking
- Weak starting position, poor utility performance, infrastructure maintenance and expansion backlogs
dependence on aid/loans
war
debt
political instability
inequality
Regime
economic structure
political blocs
undeveloped private sector
power/influence/access
Determinative Political Economy Contextualities
institutions weak
political interference
legitimacy
Hybrid Model
Institutional capacity
rent seeking
starting position
corruption

8. LESSONS FROM THE EXPERIENCE OF POWER SECTOR REFORMS
IN SUB-SAHARAN AFRICA & SOUTH ASIA
Market-based vs State-led a false dichotomy - whatever capacity exists across the private and public sector needs to be harnessed to meet the ultimate power sector development goals
Reform efforts need to be flexible yet durable, suitably paced and sequenced, and seen to be broadly legitimate by public, private and political actors
Design needs to be “reality-based” - designed and implemented with due consideration of the starting conditions of the power sector, the complexities of the political economy context, and the larger macro-economic and social conditions within a country
realistic objectives and timelines
choosing appropriate measures and reform steps
identifying politically feasible paths to reform

9. POLITICAL ECONOMY ANALYSIS AN INTEGRATED POLITICAL ECONOMY APPROACH
NATIONAL STRUCTURAL CHARACTERISTICS
POLITICAL AND ECONOMIC INSTITUTIONS
SECTOR ANALYSIS (SECTOR STRUCTURE, STAKEHOLDERS & POLICY)
POLICY AND REFORM PROCESSES
SITUATIONAL/ TEMPORARY FACTORS
AN INTEGRATED POLITICAL ECONOMY APPROACH
IN SUB-SAHARAN AFRICA & SOUTH ASIA
UNDERSTAND POLITICAL ECONOMY AS CONTEXT & OBJECT OF REFORM
IDENTIFY STRATEGIC AREAS FOR REFORM
DESIGN “REALISTIC” REFORMS
MAP POLITICALLY FEASIBLE PATHWAYS TO POWER SECTOR DEVELOPMENT
POLITICAL & ECONOMIC INSTITUTIONS
SITUATIONAL / TEMPORARY FACTORS
POLICY/REFORM PROCESSES
SECTOR ANALYSIS
NATIONAL STRUCTURAL CHARACTERISTICS
Policy making and implementation processes,
Incentives and capacities of actors working in policy formulation, negotiation and implementation
Past policy process timelines and experiences (of relevance)
‘Focusing events’ (eg. crises, news, regime transition, technological breakthrough, etc.),
Policy/reform/issue champions and/or coalitions,
External actors, donor agencies
Stability/volatility across the political economy system
STAKEHOLDER ANALYSIS
Power (type, distribution & source),
Mode and degree of Influence,
Interests,
Incentives,
Ideas/ ideology,
Networks and relationships
Regime,
Structure,
Distribution power and resources,
Incentives,
Responsiveness,
Accountability,
Inclusive/exclusive,
Transparency & legitimacy (level and source of legitimacy),
Capacity & capability
SECTOR & POLICY REFORM AREA
Historical evolution of sector,
Structural features & organisation,
Relevant institutions & policies,
Stated sector objectives,
Performance,
Transparency/ Information
POLICY ANALYSIS
Content,
Viability (political, techno-economic and organisational),
Impact on sector organisation/performance,
Impact on stakeholders, interests and incentives
State formation,
History,
Geopolitics,
Natural environment & resources,
Macro-economic status/structure,
Demographics,
Socio-economic conditions,
Culture, religion, ideologies

10. UNDERTAKE A SYSTEMATIC REVIEW OF EXTANT CORE AND PERIPHERAL LITERATURE
RESEARCH AGENDA
DEVELOP AN INTEGRATED & THEORETICALLY INFORMED POLITICAL ECONOMY APPROACH
Objectives: Practical policy tool & base point for theory development
Method: An in-depth, explorative application of this framework in one or a small selection of countries
UNDERTAKE A SYSTEMATIC REVIEW OF EXTANT CORE AND PERIPHERAL LITERATURE
Objectives: Identify common enabling or constraining political economy contextualities in power sector
Method: Mapping contextualities and lessons across the literature within a framework, so as to identify patterns and begin to develop an understanding around what is possible, appropriate and sustainable
ADVANCE EMPIRICAL POLITICAL ECONOMY RESEARCH ACROSS DEVELOPING COUNTRIES AND REGIONS
Objectives: Country-to-county learning across and within developing regions & the development of Power Sector PE research networks for knowledge sharing & development
Method: Development of integrated PE framework & sourcebook, launch empirical case studies across regions & facilitate inter-regional learning and collaboration.