1. Association of Energy Regulators for Eastern and Southern Africa EgyptEra Electricity Market and Regulators Status in COMESA General Assembly Meeting Lusaka, Zambia September, 2014 Portfolio Committee on Electricity

2. Initiative / Project According to the RAERESA Work Programme (Pillar 2) a task force should complete a survey for all 19 member countries to determine:  How the electricity sector is regulated, and  Monitoring the compliance and enforcement of local energy market as well as the regional markets.

3. Mandate The survey shall explore: The current regulatory status of the electricity sector. The opportunities and difficulties of further market integration from a legal, technical and financial aspects.

4. Procedures  Fact Sheet was designed and sent to member countries.  Respondents were collected from member Countries  The report contains the necessary analysis, evaluation and Conclusions.

5. Report Organization  Chapter 1 introduction and the scope of the report  Chapter 2 summarizes the findings of the Fact sheet  Chapter 3 a benchmarking for the regulatory progress in member countries  Chapter 4 conclusions  Appendices (member countries system data, master copy of the Fact Sheet)

6. Fact Sheet, Basic Information for the last year (2012-2013)  Generation Plants  Transmission Network  Interconnections  Distribution Network  Market Information

7. Eleven indicators have been identified to assess the current regulatory and market status 1. Legislative and regulatory framework 2. Financial viability of the industry 3. Unbundling of the industry 4. Removing obstacles to competition 5. Market access 6. Market Arrangements 7. Implementation of national market 8. Regulations 9. Technical and commercial rules and agreements 10. Infrastructure requirements for market operation 11. Imports and Exports

8. 1-Legislative and regulatory framework  Separation of policy and operation  Legislative basis for regulatory agency  Legislative basis for market mechanisms  Legislative basis for industrial restructuring  Provision for private participation  Competition rules

9. 2-Financial viability of the industries  Cost-reflective tariffs  Elimination of cross subsidies  Transparent subsidies to targeted groups  Reduction of non-technical losses  Transitional commercial arrangements

10. 3-Unbundling of the industries  Disaggregating of activities  Transmission network operations and market functions  Power Exchange  Balancing energy pricing  Ancillary services trade

11. 4-Removing obstacles to competition  Break up of dominant positions  Electricity network extension

12. 5-Market access  Definition of eligible consumers  Definition of Use of System (UOS) charges  Procedures for congestion management  Non-discriminatory operational rules

13. 6-Market Arrangements  Definition of market form  Establishment of market rules  Review and drafting of agreements  Specification and implementation of settlement systems

14. 7-Implementation of national market  Official and political responsibility  Action plan  Programme management  First operation of the market

15. 8-Regulation  Independence of regulator  Powers to perform his duties  Definition of regulatory principles  Regulatory capacities

16. 9-Technical and commercial rules and agreements  Network Codes  Use of System agreements  Connection charges and procedures

17. 10-Infrastructure requirements for market operation  Specification of system metering needs  Specification of consumer metering needs  Specification of communication and IT requirements  Procurement

18. 11-Imports and Exports  Interim arrangements for use of interconnections  Final arrangements for use of interconnections  Charging arrangements

19. Indicators  Multiple questions per each indicator have been used to assess the current market and regulatory frame work.  Nine Countries responded to the questionnaire, viz., Comoros, DRC, Egypt, Ethiopia, Kenya, Madagascar, Malawi, Rwanda, and Sudan.

20. Benchmarking IndicatorsNumber of Questions Legislative and regulatory framework6 Financial viability of the industries5 Unbundling of the industries5 Removing obstacles to competition2 Market access4 Market Arrangements4 Implementation of national market4 4 Regulation4 Technical and commercial rules and agreements3 Infrastructure requirements for market operation4 Imports and exports3

21. 10/17/2015 21 Benchmarking (cont’d) Number of questions used in Evaluation Benchmarking Category based on number of yes FulfilledIn progressStarting phase Not yet 662-510 552-410 442-310 33210 2210

22. Summary table for Regulatory and Market Implementation Benchmarking Country Legislative and regulatory framework Financial viability of the industries Unbundling of the industries Removin g obstacles to competit ion Market access Market Arrangement s Implementatio n of national market Regulation Technical and commercia l rules and agreements Infrastructur e requirements for market operation Imports and exports EgyptIn Progress Starting Phase In Progress Starting PhaseFulfilled Not Yet ComorosIn Progress Not Yet In Progress Not YetIn ProgressNot Yet Starting PhaseNot Yet DRCFulfilled Not Yet In Progress Fulfilled Starting PhaseFulfilled EthiopiaIn ProgressFulfilledStarting PhaseNot Yet In Progress Not Yet Starting Phase RwandaFulfilledIn Progress FulfilledIn ProgressFulfilled SudanIn Progress Starting Phase In Progress Not Yet Fulfilled MadagascarFulfilled In Progress Not YetFulfilled Not Yet KenyaIn Progress Not Yet Fulfilled Starting Phase Not Yet Starting Phase MalawiFulfilled In Progress Starting PhaseNot Yet In Progres s In progress FulfilledIn ProgressNot Yet

23. Conclusion Most of COMESA Member States have set up independent regulatory authorities to make objective and consistent regulatory decisions. However, still regulators meet some reluctance that limiting the effectiveness of sector regulation. Most of the surveyed countries are still facing the challenge in a way or another in developing their regulation and building competitive markets.

24. Conclusion(cont’d) The industry unbundling question is still on the table for all countries except for Madagascar. Still competition is facing obstacles in most of the respondent countries. Market access is still an issue in countries that are not strongly had legal framework and the necessary legislations.

25. Conclusion(cont’d) Most of the member countries have not fully defined their market arrangements. All countries are in different stages on route to set their codes and technical agreements. Cross border trade is far from mature for the entire respondent group.

26. Recommendations One way forward is through benchmarking process. It is understood that developing credible and effective regulation takes time and needs much iteration and it has a learning curve. However, it is recommended to repeat the same survey every three years to monitor and benchmark the progress of the regulatory status in COMESA countries.

27. Portfolio Group Meeting and Executive Committee Recommendations The status report should be shared with all stakeholders and should be widely disseminated. The meeting agreed that these reports be repeated on regular bases for every three years to be used as an observatory for the development in regulatory status in the member countries. Countries, which had not completed the data collection formats are requested to respond as soon as possible as well as for those whom had responded to update the information, as it may be needed.

28. Thank You For Your Attention salmawy@link.net