35992
ESMAP TECHNICAL PAPER
089
Study on Investment and Private Sector
Participation in Power Distribution in
Latin America and the Caribbean Region
December 2005
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Study on Investment and Private
Sector Participation in Power
Distribution in Latin America and the
Caribbean Region
December 2005
Rafael Herz
Jan Kappen
Lucio Monari
Energy Sector Management Assistance Program
(ESMAP)
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and Development/THE WORLD BANK
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Table of Contents
Preface.............................................................................................................................. v
Acknowledgement............................................................................................................vii
Survey of Private Participation in the Latin American and Caribbean Power Sector........1
Regional Overview........................................................................................................1
Comparative Overview of Countries ...........................................................................12
Comparative Overview of Companies.........................................................................18
Current Strategies of the Main Competitors................................................................23
Private Asset Sales and Market Exits .........................................................................27
Private Participation in Electricity Distribution.............................................................30
Private Investment in Network Extensions..................................................................31
Private Investment in Utility Performance and Modernization.....................................34
Private Investment in Strategic Assets and Market Control........................................37
Analysis of Key Barriers to Investments..........................................................................39
Macroeconomic Barriers .............................................................................................40
Institutional Barriers ....................................................................................................42
Legal/Regulatory Barriers ...........................................................................................45
Political barriers...........................................................................................................47
Investor Survey ...........................................................................................................49
Conclusions.................................................................................................................49
Estimates of Investments in the Electricity Sector ..........................................................51
Proposed Detailed Country Analysis...............................................................................57
Annex 1...........................................................................................................................59
Private Sector Investment in Latin America ....................................................................59
Annex 2...........................................................................................................................67
Work Sheets for Calculation of Estimates for Projected Investments.............................67
Bibliography ..................................................................................................................109
List of Tables
Table 1.1: Investor Downgrading Following 2001.............................................................4
Table 1.2: Private Participation in the Power Sector, 2001 Estimate................................5
Table 1.3: Ownership of Generation Capacity, 2002 Estimate .........................................6
Table 1.4: Top 20 Project Sponsors by Total Investment (1990-2002)...........................23
Table 1.5: Private Asset Sales, 2002-2004.....................................................................29
Table 3.1: Projected Investments in the Electricity Sector in Latin America 2005-2015 (in
m US$)............................................................................................................................52
Table 3.2: Projected Investments to Increase Access in Latin America in the Distribution
Sector 2005-2015 (in m US$) .........................................................................................53
Table 3.3: Reference Scenario: Investment in Electricity in Latin America (billion US$) 54
Table A1.1: Divestitures in Electricity Distribution in Argentina, 1990 - 2002 .................60
Table A1.2: Divestitures in Electricity Distribution in Bolivia, 1990 - 2002 ......................61
Table A1.3: Divestitures in Electricity Distribution in Brazil, 1990 - 2002........................62
Table A1.4: Divestitures in Electricity Distribution in Colombia, 1990 - 2002..................63
Table A1.5: Divestitures in Electricity Distribution in the Dominican Republic, 1990 -
2002 ................................................................................................................................63
Table A1.6: Divestitures in Electricity Distribution in El Salvador, 1990 - 2002 ..............63
Table A1.7: Divestitures in Electricity Distribution in Guatemala, 1990 - 2002 ...............64
iii
Table A1.8: Divestitures in Electricity Distribution in Panama, 1990 - 2002 ...................64
Table A1.9: Divestitures in Electricity Distribution in Peru, 1990 - 2002 .........................65
Table A1.10: Divestitures in Electricity Distribution in Venezuela, 1990 - 2002..............65
List of Figures
Figure 1.1: Annual Private Investment in the Latin American and Caribbean Power
Sector by Sub-Sectors, by Year of Financial Closure 1990-2002.....................................3
Figure 1.2: Percent-Shares of Annual Private Investment in the Latin American and
Caribbean Power Sector by Subsectors, 1990-2002 cumulated ......................................4
Figure 1.3: Investment in Power Sector by Sub-Types of Public Participation, Latin
America and Caribbean, 1990-2002 cumulated................................................................8
Figure 1.4: Investment in Power Sector by Sub-Types of Public Participation, Latin
America and Caribbean, 1990-2002 cumulated................................................................9
Figure 1.5: Greenfield Projects by Subtypes of Private Participation, 1990-2002 ..........10
Figure 1.6: Types of Private Participation, 1990-2002 by year of financial closure ........11
Figure 1.7: Use of Private Funds by Year of Financial Closing (1990-2002)..................12
Figure 1.8: Investment Commitments by Country1, 1990-2002 [$mm cumulated]..........13
Figure 1.9: Cumulated Private Investment Commitments 1990-2002 vs. Size of Markets
(I).....................................................................................................................................14
Figure 1.10: Private Participation 1990-2002 vs. Size of Markets (II).............................14
Figure 1.11: Investment Commitments by Sub-Sectors, 1990-2002 cumulated.............16
Figure 1.12: Investment Commitments1 by Types of Private Participation, 1990-2002
cumulated........................................................................................................................17
Figure 1.13: Investment Commitments1 by Use of Funds, 1990-2002 cumulated..........18
Figure 1.14: Investment Commitments by Origin, 1990-2002 cumulated.......................19
Figure 1.15: Top 20 Project Sponsors by Subsector, 1990-2002 [$mm cumulated].......20
Figure 1.16: Top 20 Project Sponsors by Type of Investment, 1990-2002 [$mm
cumulated].......................................................................................................................21
Figure 1.17: Top 20 Project Sponsors by Use of Funds, 1990-2002 [$mm cumulated] .22
Figure 1.18: Private Asset Sales 2002-2004 [percent-share of according to $-value of
transaction]......................................................................................................................28
Figure 1.19: Latin America and Caribbean Power Market, Recent Development...........30
Figure 1.20: Percentages of Population without Access to Electricity ............................33
Figure 1.21: Increases in Access Following Distribution Privatization ............................33
Figure 1.22: Reductions in Energy Losses Following Distribution Privatization..............35
Figure 1.23: Non Technical Electricity Transmission and Distribution Losses in the Latin
American and Caribbean Region....................................................................................36
iv
Preface
In the 1990s, there has been a significant involvement of private investors in the
electricity sector in the Latin America and the Caribbean, which was interrupted abruptly
near the end of the decade. It appears that investment in the region has still not
recovered, while future energy needs for funding in the sector cannot be met without
significant re-animation of private sector interest in the region and the sector � most
countries operate under tight fiscal constraints that preclude extended public investment.
There are a number of lessons learnt through experiences in the various countries in the
last 15 years that argue for further studies in more detail on what happened and why it
went wrong in some places, or worked well in others.
The desk study presents the results of a survey and analysis of the data available on
private participation in the power sector in the period 1990-2002, pointing to a series of
preliminary findings, and identifies areas where deeper policy analysis is needed so that
modalities for public-private partnerships can be proposed and the sector can again attract
the needed investments. The final goal of this desk study is to select two or three
countries for further analysis. It would be the objective of a subsequent phase, to analyze
case studies and present key lessons learnt in selected countries and compare them with
international experience.
v
Acknowledgement
This four-part study was commissioned under ESMAP Activity P093135 and
carried out by Jan Kappen and Rafael Herz (consultants) and Lucio Monari, Lead Energy
Economist, LCSFE, World Bank.
The first part reviews the recent trends and features of the private Sector
Participation in the Latin America and the Caribbean power sector. This section is based
on an analysis of existing databases and on a review of studies and a survey conducted in
2003. The second section presents an analysis of the key barriers to investments based on
a review of the existing literature and the experience of the authors. The third section
present estimates of investment for the next ten years based on consultants' own analysis
of past and projected demand growth scenarios and compared them with estimates from
the International Energy Agency. The last section briefly makes a proposal for a detailed
country analysis.
Special thanks to Ms. Nidhi Sachdeva for desktopping the final report and to Ms.
Marjorie Araya for coordinating the publications process, both from ESMAP.
vii
1
Survey of Private Participation in the Latin
American and Caribbean Power Sector
Regional Overview
1.1 Throughout most of the 1990s, many Latin American countries were very
successful in attracting a large share of worldwide private investment in infrastructure.
Investors were predominantly attracted by a widespread confidence in economic stability,
commitment to public sector reforms and far-reaching privatizations of state owned
enterprises. During the early 1980s, Chile was the first country to introduce
comprehensive reforms aimed at opening the power sector to private participation and
competition. By the end of the 1990s, Latin America had the largest share of private
electricity projects among all developing regions worldwide. More than 38 percent of the
total investment in the developing world power sectors was placed in Latin America.
1.2 As a result of this development, private investors absorbed an increasing part of
the necessary expansion and modernization investments particularly in generation
capacity and, to a less extent, distribution networks and thereby reduced the budgetary
pressure on governments strained by large transfers of tax money to state owned utilities.
1.3 Towards the end of the 1990s, after more than 7 years of dynamic investment
growth, macroeconomic shocks as well as overall political and economic instability
radically undermined the prospects for growth and private participation in infrastructure.
The power sector was the infrastructure sector most affected by this decline with many
developers suffering a tremendous increase in their cost of capital1 and subsequently
being forced to swiftly divest and pull back from the Latin American market.2
1.4 After having grown from 6 percent in 1990 to 43 percent in 1997, when private
capital flows into the Latin American and Caribbean power sector reached their peak, the
share of annual investment in the power sector plunged back to 16 percent in 2001.
1see Table 1.1
2see section 1.5
1
2 Study on Investment and Private Sector Participation in Power Distribution in Latin America and
the Caribbean Region
During the above period, total annual investments in the power sector dropped from 23
billion to less than 4 billion Dollars, the lowest level since 1994.3
1.5 The collapse of investment was particularly drastic for private funds invested in
acquisitions of distribution-, transmission and integrated utilities. The magnitude of the
slowdown was a consequence of the conclusion of major divestiture programs in these
areas and, to some degree, a result of the region's economic crisis4. Following 1998, with
many sectoral privatization programs coming to an end, new private investment remained
small and was largely dominated by the addition of new generation capacity through
greenfield projects. There were also a number of international factors which contributed
to the slowdown in investments, including the over-arching expectations about returns in
the developing countries by investors (which did not materialize), and the ENRON crisis.
These important supply side effects are not the subject of this preliminary study, which
focuses on the demand side factors.
3Izaguirre / Hahn / Khuu / Nellis (2004)
4Izaguirre / Hahn / Khuu / Nellis (2004)
Chapter 1: Survey of Private Participation in the Latin American and Caribbean Power Sector 3
Figure 1.1: Annual Private Investment5 in the Latin American and Caribbean Power
Sector by Sub-Sectors, by Year of Financial Closure 1990-2002
[$mm]
Sum of Total Investment
25000
20000
15000
Subsector
Integrated Utilities
Electricity generation
Electricity distribution and transmission
10000
5000
0
1990 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002
ClosureYear
Source: PPI database (2004), ECLAC (2001), own calculations
5 Investments in infrastructure projects have generally been recorded on a commitment basis in the year of
financial closure (for which data are typically available). Actual disbursements are not tracked. Where
divestitures are phased or where investment requirements are defined by requirements on service coverage
and quality and data are available (such as for large privatized electricity and telecommunications
companies), the investments are recorded in the years in which the transactions take place. Where
investments in acquiring government assets are due over the period of a concession, an estimate of their
present value is recorded in the year of financial closure.
4 Study on Investment and Private Sector Participation in Power Distribution in Latin America and
the Caribbean Region
Figure 1.2: Percent-Shares of Annual Private Investment in the Latin American and
Caribbean Power Sector by Subsectors, 1990-2002 cumulated
Integrated Utilities Electricity
18% distribution and
transmission
34%
Electricity
generation
48%
Source: PPI database (2004), ECLAC (2001), own calculations
Table 1.1: Investor Downgrading Following 2001
Developer S&P Rating August 2001 S&P Rating March 2003
Enron BBB+/Stable D
NRG Energy Inc. BBB-/Stable D
Reliant Energy Power. BBB+/Stable B-/Watch Dev.
Endesa A+/Neg. BBB-/Neg.
CMS Energy BB/Stable BB/Neg.
ABB AA+/Neg. BB+/Neg.
AES Corp. BB/Positive B+/Neg.
Cogentrix Energy Corp BB+/Stable BB/Watch Neg.
Edison Mission Energy BBB-/Stable BB-/Neg.
Source: Bloomberg Online
1.6 Despite the meltdown of private investment at the end of the decade, the surge of
private participation during the 90s dramatically changed the landscape of the Latin
American power sector. In particular the generation sub-sector experienced a drastic shift
from exclusive state ownership to the considerable private sector participation.
1.7 However, as Table 1.2 shows, privatization of the electricity sector is far from
complete in Latin America and the Caribbean. In most countries, the state still controls
sizeable amounts of the generation, transmission and distribution segments. Conflicts of
interest may arise within the government itself. This may be caused by the fact that the
government assumes many different roles with respect to the electricity industry, as
legislator, regulator, owner and purchaser of electricity. Multiplicity of roles may give
origin to conflicts of interest and to the erosion of regulatory power.6
6Milan/Lora/Micco (2001)
Chapter 1: Survey of Private Participation in the Latin American and Caribbean Power Sector 5
Table 1.2: Private Participation in the Power Sector, 2001 Estimate
Generation Transmission Distribution
Argentina 60% 100% 70%
Bolivia 90% 90% 90%
Brazil 30% 10% 60%
Chile 90% 90% 90%
Colombia 70% 10% 50%
Costa Rica 10% 0% 10%
Dominican Republic 60% 0% 50%
Ecuador 20% 0% 30%
El Salvador 40% 0% 100%
Guatemala 50% 0% 100%
Jamaica 20% 0% 0%
Mexico 10% 0% 0%
Paraguay 0% 0% 0%
Peru 60% 20% 80%
Trinidad & Tobago 40% 0% 0%
Uruguay 0% 0% 0%
Venezuela 20% 10% 40%
Source: Espinasa (2001).
1.8 In 2002, more than 30 percent of the generation capacity in the Latin American
and Caribbean region was operated and managed by corporations where private investors
owned at least a 30 percent stake of the equity.7
1.9 Yet, Table 1.3 illustrates that many countries with a large share of hydropower in
their generation mix (i.e. Brazil, Argentina, Peru) were apparently reluctant to exceed a
certain level of private participation in their generation capacities involving large dams
and other significant hydropower facilities.
1.10 In some cases, the simple explanation for the lower share of private participation
in generation capacity is the fact that in many Latin American countries a large share of
hydropower stems from bi- or multinational projects (i.e. Itaipu, involving Argentina,
Brazil and Paraguay, or Yacyreta between Argentina and Paraguay) that for political and
regulatory reasons are difficult to transfer into private ownership or management. Other
reasons for the unwillingness to privatize sizeable shares of hydropower resources are
oftentimes the important social implications of the management of hydropower facilities
and in particular large dams (i.e. environmental, irrigation, transport routes) as well as the
ability of private hydropower operators to influence market prices in their favor.
1.11 Colombia, even though it features a 63 percent-share of hydropower in its
generation mix and at the same time an impressive 58 percent-share of private
participation in power generation, is not an exception to the above phenomenon. The
7see Table 1.3
6 Study on Investment and Private Sector Participation in Power Distribution in Latin America and
the Caribbean Region
main goal of the Colombian sector reform program that started in the beginning of the
90s was to drastically increase the share of thermoelectric capacity, which more than
doubled in the decade thereafter. Therefore, compared to the new thermoelectric capacity
that is almost 100 percent in private hands, the bulk of hydroelectric capacity is still
predominantly under public ownership.
Table 1.3: Ownership of Generation Capacity, 2002 Estimate
Total generation capacity
Country [MW]1 % private ownership2 % hydro3
Brazil 76,139 29% 83%
Mexico 42,484 15% 23%
Argentina 27,039 63% 35%
Venezuela 21,226 1% 62%
Colombia 13,141 58% 63%
Chile 10,269 61% 40%
Peru 5,906 38% 50%
Cuba 4,411 5% 1%
Ecuador 3,136 18% 56%
Dominican Republic 3,081 72% 13%
Costa Rica 1,715 13% 72%
Guatemala 1,697 52% 32%
Jamaica 1,584 53% 4%
Trinidad and Tobago 1,417 99% 0%
Panama 1,260 82% 49%
Bolivia 1,227 75% 30%
El Salvador 1,134 46% 36%
Honduras 914 27% 47%
Nicaragua 643 35% 16%
Grand Total 218,421 32% 55%
Source: PPI database (2004), OLADE (2003), own calculations
(1) OLADE (2003)
(2) Percentage of generation facilities with more than 30 percent private sector participation
(3) Share of electricity from hydroelectric facilities
1.12 Probably the most typical feature of private participation in the Latin American
power sector has been the striking predominance of divestitures and greenfield projects.8
Up until 1999, divestitures have been the most common form for introducing private
participation in electricity, unlike in other areas of infrastructure reform, such as the
water sector, where privatizations have been relatively scarce.9
8see Figure 1.3
9Izaguirre (1998)
Chapter 1: Survey of Private Participation in the Latin American and Caribbean Power Sector 7
1.13 Of the total investment in private electricity projects, about 67 percent has been
directed to the 144 divestitures, and 32 percent to the 167 greenfield projects10.
Interestingly, despite the dramatic meltdown of investment at the end of the 90s,
greenfield investments appeared to be more resistant to the unfavorable macroeconomic
environment, and continued to develop at almost unchanged pace and magnitude across
most countries of the Latin American and Caribbean Region.
1.14 Conversely, concessions11 as well as management or lease operations contracts12
which were quite frequent in the region's water sector have been very rare in the
electricity sector. In the years from 1990 to 2002 only five concession contracts have
been signed, all of which were subject to the operation and/or refurbishment of power
generation facilities.13 In the same period, only two very small-scale management
contracts have been signed in the entire Latin American and Caribbean Region. Of these
two, only one contract (Electricit� de Haiti) involved a capital expenditure by private
sponsors (EDF, Hydro-Quebec, 4.7 Million) in expanding or rehabilitating facilities. The
other contract (Empresa Distribuidora de Electricidad de San Luis, Edesal, Argentina)
simply transferred the management of distribution facilities to a private operator (Union
Fenosa) while leaving the public sector responsible for new investments.
1.15 The predominant "sub-types" of private participation were full or partial
privatization, greenfield projects operated as merchant plants in the more liberalized
markets such as Argentina and Chile, and "Build, Own, and Operate" contracts in other
countries.14 A "Build, Own, and Operate" contract is a commercial agreement, wherein a
private sponsor builds a new facility largely at its own risk, transfers ownership to the
government, leases the facility from the government and operates it at its own risk, and
eventually receives full ownership of the facility at the end of the concession period. The
10Izaguirre (1998)
11Concessions: A private entity takes over the management of a state-owned enterprise for a given period
during which it also assumes significant investment risk. The PPI - database, from where the data of this
survey is extracted, classifies concessions in the following three categories (see PPI-Glossary):
1. Rehabilitate, operate, transfer. A private sponsor rehabilitates an existing facility, then
operates and maintains the facility at its own risk for the contract period.
2. Rehabilitate, lease or rent, transfer. A private sponsor rehabilitates an existing facility at its
own risk, leases or rents the facility from the government owner, then operates and maintains
the facility at its own risk for the contract period.
3. Build, rehabilitate, operate, transfer. A private developer builds an add-on to an existing
facility or completes a partially built facility and rehabilitates existing assets, then operates
and maintains the facility at its own risk for the contract period.
12Management and lease contracts: According to the PPI-database, these contracts can be divided into two
subclasses:
1. Management contract. Usually the government pays a private operator to manage the facility
and retains much of the operating risk.
2. Lease contract. A private operator typically pays a fee to the government for the right to
manage the facility and takes on most of the operating risk.
13Izaguirre / Hahn / Khuu / Nellis (2004)
14see Figure 1.4
8 Study on Investment and Private Sector Participation in Power Distribution in Latin America and
the Caribbean Region
government usually provides revenue guarantees through long-term take-or-pay contracts
for bulk supply facilities or minimum traffic revenue guarantees.15
1.16 Temporary arrangements such as management contracts as well as forms of
private participation where ownership after the expiration of a concession period is
transferred back to the state ("Build, Own, Transfer", or "Build, Own, Operate,
Transfer") where almost never employed.16
1.17 From 1990-2002, of all funds employed for divestitures in the region, more than
25 percent have been spent on expanding or rehabilitating the facilities of utilities that
were privatized beforehand. Of all greenfield projects that reached financial closure in the
region by 2002, "Build, Own, Operate" or "Build, Own, Transfer" schemes made up for
about 73 percent and the remainder consisted of merchant power plants. Most of the
investment into "Build, Own, Operate" or "Build, Own, Transfer" schemes was captured
by projects in Colombia, Brazil, and Guatemala, countries that had already embarked on
comprehensive reform of their electricity sectors. The other nineteen contracts were
signed by Costa Rica, Jamaica, the Dominican Republic, and Honduras, which in most
cases have adopted the Asian model of private participation.17
Figure 1.3: Investment in Power Sector by Sub-Types of Public Participation, Latin
America and Caribbean, 1990-2002 cumulated
Concessions
1%
Greenfield projects
32%
Divestitures
67%
Source: PPI database (2004), own calculations
15see PPI glossary (2004)
16see Figure 1.4
17Izaguirre (1998)
Chapter 1: Survey of Private Participation in the Latin American and Caribbean Power Sector 9
Figure 1.4: Investment in Power Sector by Sub-Types of Public Participation, Latin
America and Caribbean, 1990-2002 cumulated
Build, own, and
Rehabilitate, operate
operate, and 14%
transfer Build, own, and
0% transfer
6%
Build, rehabilitate,
operate, and
Partial transfer
Privatization 1%
Full Privatization
53% 14%
Management
contract
Merchant 0%
12%
Source: PPI database (2004), own calculations
1.18 Since 1997, mostly as a result of the increasing volatility of market prices for
electricity throughout the region, the share of merchant plants18 is continuously
decreasing.19
1.19 Another relatively recent development is the trend towards a larger share of
"Build, Own, Transfer" schemes, which before 1997 were hardly ever employed. Since
1997, more than $5 billion of total investment was allocated through these contracts, of
which more than $4 billion were invested in Brazil alone.
18Merchant plant/facility: A private sponsor builds a new facility in a liberalized market in which the
government provides no revenue guarantees (see PPI Glossary).
19see Figure 1.5
10 Study on Investment and Private Sector Participation in Power Distribution in Latin America and
the Caribbean Region
Figure 1.5: Greenfield Projects by Subtypes of Private Participation, 1990-2002
100%
90%
80%
70%
60%
Merchant
50% Build, own, and transfer
Build, own, and operate
40%
30%
20%
10%
0%
1990 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002
Source: PPI database (2004), own calculations
1.20 The strong preference for divestiture and greenfield projects and the only sporadic
use of other forms of private participation is mainly a result of the region's prevalent
approach to power sector reform: Following the Chilean model, most Latin American
countries have introduced private participation in electricity as part of broader reforms
that usually included the establishment of a vertically separated market structure.
1.21 This approach in general entailed the transfer of most generation and distribution
assets to the private sector. Therefore, major generation and distribution divestitures have
been very frequent across all reforming countries in the region. Most notably, Argentina,
Bolivia, Brazil, Chile, Colombia, and Peru have privatized the great majority of their
distribution and generation facilities as stand-alone businesses.20
1.22 The above shift from divestiture to greenfield projects also led to a fundamental
alteration in the way funds were used after the financial meltdown in 1997. The increased
proportion of greenfield projects led to a sharp decrease of funds invested in government
20Izaguirre (1998)
Chapter 1: Survey of Private Participation in the Latin American and Caribbean Power Sector 11
assets (such as existing plants and facilities or non tangible assets such as concessions
and license fees) while investment into expansion and modernization remained almost
unchanged.
1.23 As a result, Figure 1.7, "Use of Private Funds", shows a very similar pattern to
Figure 1.6, "Types of Private Participation", featuring a strong decline of private funds
allocated to the purchase of government assets, while expansion and modernization
investments remain relatively stable.
Figure 1.6: Types of Private Participation, 1990-2002 by year of financial closure
Subsector (All)
[$mm]
Sum of Total Investment
25000
20000
15000 TypeOfPPI
Management and lease contract
Concession
Greenfield project
Divestiture
10000
5000
0
1986 1987 1988 1989 1990 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002
ClosureYear
Source: PPI database (2004)
12 Study on Investment and Private Sector Participation in Power Distribution in Latin America and
the Caribbean Region
Figure 1.7: Use of Private Funds by Year of Financial Closing (1990-2002)
[$mm]
25,000
20,000
15,000
Expansion, Modernization
Purchase of Govmt. Asset
10,000
5,000
0
1986 1987 1988 1989 1990 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002
Source: PPI database (2004), own calculations
Comparative Overview of Countries
1.24 From 1990 to 2002, the Latin American and Caribbean region's 25 countries
granted a total of 316 projects involving private participation. By the end of 2002, Brazil,
Argentina, Colombia and Chile were all among the top ten developing countries in the
world in terms of private investments in the electricity sector, with projects worth $44
billion, $15 billion, $6.5 billion and $6.1 billion in that order.21 Even though Brazil
started its reforms of the power sector relatively late in the process compared to Chile and
Argentina, by 2002 it attracted more that $43 billion of cumulated investment
commitments or almost 50 percent of the private investors in the regions power sector.
Argentina followed with 16 percent, and both Columbia and Chile with 7 percent
respectively.
21PPI-database (2004), see Figure 1.8
Chapter 1: Survey of Private Participation in the Latin American and Caribbean Power Sector 13
Figure 1.8: Investment Commitments by Country1, 1990-2002 [$mm cumulated]
Brazil 43,612
Argentina 14,586
Colombia 6,512
Chile 6,193
Peru 4,303
Mexico 3,897
Dominican Republic 2,309
Guatemala 1,433
Panama 1,065
El Salvador 985
Bolivia 507
Jamaica 490
Nicaragua 347
Costa Rica 319
Ecuador 310
Trinidad and Tobago 207
Honduras 182
Cuba 165
Belize 154
Venezuela 133
Guyana 50
Dominica 26
Grenada 6
Haiti 5
Source: PPI database, own calculations
(1) Excluding bi-national projects
1.25 With the exception of countries that were more reluctant to private participation
models in infrastructure (i.e. Mexico, Venezuela, Cuba), that only recently started to open
up their power sector to private participation (i.e. Dominican Republic, Ecuador,
Nicaragua), or that show a particularly slow reform process (i.e. Costa Rica, Honduras),
the magnitude of private investment mostly corresponded with the comparative size of
the markets, meaning the largest markets accounted for the greatest share of private
investment commitments. Brazil and Argentina for instance jointly accounted for ca. 46
percent of the region's generation capacity, and comprised more than 60 percent of total
investments in region's power sector22.
22see Figure 1.9
14 Study on Investment and Private Sector Participation in Power Distribution in Latin America and
the Caribbean Region
Figure 1.9: Cumulated Private Investment Commitments 1990-2002 vs. Size of
Markets (I)
Brazil 49%
37%
Mexico 4% 24%
Argentina 16%
9%
Venezuela 0%
9%
Colombia 7%
5%
Chile 7%
4% Private Investment [% of total LAC]
Peru 5% Annual Production in 2001 [% of total LAC]
2%
Source: PPI database (2004), ECLAC (2001), own calculations
Figure 1.10: Private Participation 1990-2002 vs. Size of Markets (II)
Cuba 0.2% 1.6%
Ecuador 0.3% 1.1%
Dominican Republic 2.6%
1.0%
Costa Rica 0.4% 0.8%
Jamaica 0.7%
0.5%
Guatemala 1.6%
0.6%
Trinidad and Tobago 0.2% 0.6%
Panama 1.2%
0.5%
Bolivia 0.6%
0.4%
Honduras 0.2% 0.4%
El Salvador 1.1%
0.4% Private Investment [% of total LAC]
Nicaragua 0.4% Annual Production in 2001 [% of total LAC]
0.2%
Source: PPI database (2004), ECLAC (2001), own calculations
Chapter 1: Survey of Private Participation in the Latin American and Caribbean Power Sector 15
1.26 In the examined decade from 1990 to 2002, the five countries with the largest
power sectors in the Latin American and Caribbean region followed a comprehensive,
sector-wide approach to reform and unbundling involving the privatization of companies
in generation as well as in power distribution and transmission.
1.27 However, about half of the region's second and third tier power markets, such as
Mexico, the Dominican Republic, Costa Rica, Ecuador, Honduras and Venezuela limited
private participation more or less exclusively to the generation subsector with the
exception of a few integrated utilities that typically featured only minor distribution and
transport assets. Most of the second tier countries such as Mexico and the Dominican
Republic started their sector reforms only relatively recently and during the early phases
of reform tend to focus on either greenfield projects or privatizations. The third-tier
countries mostly consist of small markets typically too small to fully benefit from the
competition-enhancing effects of unbundling and the privatization of distribution and
transport utilities, and therefore predominantly show a greater share of greenfield projects
aimed at enhancing the generation capacity.23
1.28 Chile belongs to neither of the two groups, it only shows a small portion of
transactions in the transmission and distribution subsectors due to the fact that both were
already entirely privatized in the late 1980s.
23see fig. 11
16 Study on Investment and Private Sector Participation in Power Distribution in Latin America and
the Caribbean Region
Figure 1.11: Investment Commitments by Sub-Sectors, 1990-2002 cumulated
Brazil
Argentina
Colombia
Chile
Peru
Mexico
Dominican Republic
Guatemala
Panama
Electricity distribution and transmission
El Salvador Electricity generation
Integrated Utilities
Bolivia
Jamaica
Nicaragua
Costa Rica
Ecuador
Honduras
Belize
Venezuela
Haiti
0% 20% 40% 60% 80% 100%
Source: PPI database, own calculations
(1) Excluding bi-national projects
1.29 Concerning the different types of private participation amongst the countries of
the region, a similar pattern compared to the one already observed in the distribution of
investments among sub sectors seems to be prevalent. Small countries in general and in
particular small countries that started their reform processes late tend to have a limited
variety of the different possible types of private participation in their portfolio.
Chapter 1: Survey of Private Participation in the Latin American and Caribbean Power Sector 17
Figure 1.12: Investment Commitments1 by Types of Private Participation, 1990-
2002 cumulated
Brazil
Argentina
Colombia
Chile
Peru
Mexico
Dominican Republic
Guatemala
Panama Concession
Divestiture
El Salvador
Greenfield project
Bolivia Management and lease contract
Jamaica
Nicaragua
Costa Rica
Ecuador
Honduras
Belize
Venezuela
Haiti
0% 20% 40% 60% 80% 100%
Source: PPI database, own calculations
(1) Excluding bi-national projects
1.30 The majority of countries that were among the late power sector reformers in the
region were affected by the shift from divestiture to greenfield projects that was
increasingly prevalent during the late 1990s. Costa Rica, Ecuador and Honduras are the
countries that were most concerned by this effect with portfolios that do not include a
single divestiture.
1.31 Mexico only started its sector reform program relatively early in 1992, but limited
competition and private participation to IPP, auto generation and power imports only.
Consequently, the expenditure of private funds in these countries is restricted to
expansion investments into new facilities and the enlargement of existing capacity alone.
18 Study on Investment and Private Sector Participation in Power Distribution in Latin America and
the Caribbean Region
Figure 1.13: Investment Commitments1 by Use of Funds, 1990-2002 cumulated
Argentina
Colombia
Chile
Peru
Mexico
Dominican Republic
Guatemala
Panama
El Salvador Expansion, Modernization
Bolivia Purchase of Govmt. Assets
Jamaica
Nicaragua
Costa Rica
Ecuador
Honduras
Belize
Venezuela
Haiti
0% 20% 40% 60% 80% 100%
Source: PPI database, own calculations
(1) Excluding bi-national projects
Comparative Overview of Companies
1.32 With the participation of international investors across North America, Europe
and the Latin American and Caribbean countries, and all Top 10 investors adding up to
less than half of the total investment in the sector, the sources of investment in the
region's power sector appear to be well diversified throughout the region.
1.33 However, the great participation of Latin American investors24 is somehow
misleading, given the fact that Spanish Endesa is the majority shareholder of Enersis and
Endesa Chile, both by far the largest Latin American investors.
24 See fig. 14
Chapter 1: Survey of Private Participation in the Latin American and Caribbean Power Sector 19
1.34 Furthermore, in contrast to what the large number of competitors throughout the
region might suggest, several large power markets in the region are subject to critical
market concentration issues. Especially in Argentina, cross-ownership and the de-facto
re-integration of the market resulting from the acquisition of Endesa Chile by Endesa
Spain, raised concerns as to whether enough attention has been paid towards the
preventing excessive market concentration.25 The Chilean power market has also shown
signs of considerable market concentration, with Endesa owning and operating about 65
percent of the generation capacity in the central system. Other controversial issues have
been a de-facto vertical integration and cross ownership issues, resulting from Endesa's
dominance of the transmission and upstream markets.
Figure 1.14: Investment Commitments by Origin, 1990-2002 cumulated
US
29%
Europe
30%
LAC
41%
Source: PPI database (2004), ECLAC (2001), own calculations
1.35 With the exception of the acquisitions of Edenor and Edesur by Electricit� de
France and Endesa in 1992, US- and European investors during the early 90s
predominantly focused on the strategic acquisition of generation assets. Only towards the
second half of the decade, investors started to widen their focus across subsectors and
aggressively for bid power distribution and -transport networks as well as for integrated
utilities. However, by the end of the 1990s, the region's financial crisis brought most
investments in transport and distribution assets to a halt. Since the year 2000, due to
political pressure and the absence of potential buyers, Latin American and Caribbean
governments and international investors alike have mostly abstained from further
privatizations of distribution utilities.
1.36 For the above reason, the majority of investors that show significant participation
in power transmission and distribution are part of the first generation of private sponsors
that entered the distribution market during the heydays of power market privatization and
25See chapter 2, market regulation.
20 Study on Investment and Private Sector Participation in Power Distribution in Latin America and
the Caribbean Region
have been active in the market for almost a decade.26 Despite the current market prices
resulting from a surge of market exits27 and the resulting drop of market prices for
distribution utilities, most of the new market players abstained from investments in power
transport and distribution.
1.37 Private participation in Latin American and Caribbean power distribution and
transport subsectors also appears to be matter of company size since outside the Top 15
investors in the region, private participation in both subsectors is only sporadic.
Figure 1.15: Top 20 Project Sponsors by Subsector, 1990-2002 [$mm cumulated]
AES Corporation (US)
Electricite de France
Endesa Chile
SUEZ (France)
VBC Energia (Brazil)
Iberdrola SA (Spain)
Light Rio Servicos de Electricidade SA
Endesa Spain
Enersis (Chile)
Cia. Naviera Perez Companc (Argentina) Electricity generation
Electricity distribution and transmission
Electricidade de Portugal SA Integrated Utilities
Duke Energy Corp. (US)
Enron (US)
Banco do Brasil
Union Fenosa (Spain)
Community Energy Alternatives (US)
Gener/Chilgener (Chile)
TotalFina (France)
El Paso Energy International (US)
InterGen (US)
- 2,000 4,000 6,000 8,000 10,000
Source: PPI database, own calculations
1.38 The analysis of the distribution of the different types of private participation and
the use of funds shows a similar picture. Only the top competitors participated in the
major divestitures and allocated a significant part of their funds into the purchase of
government assets such as distribution facilities or concessions.
1.39 Despite the shift from divestitures to greenfield projects that occurred towards the
end of the 90s, all of the top 15 companies still have asset portfolios that are largely
26see Figure 1.15
27see Table 1.4
Chapter 1: Survey of Private Participation in the Latin American and Caribbean Power Sector 21
dominated by generation and distribution assets acquired during the region's utility
privatizations.28 In the years from 1990 to 2002, 79 percent of the funds employed by the
top 15 investors were assigned to divestitures and only 21 percent into greenfield projects
(with a remainder of 2 percent corresponding to concession contracts).
1.40 The small investor's portfolio somehow shows the mirror image of the above:
None of the bottom 100 investors has more than two projects in their Latin American and
Caribbean investment portfolio, and only 26 percent of their total investment is allocated
into divestitures whereas the great majority of funds of about 72 percent is invested in
greenfield projects and (remainder of 2 percent corresponds to concession contracts).
1.41 A similar distribution seemed to prevalent in the use of funds, with the top 15
investors dedicating only 41 percent of their resources to modernization and expansion
investments, whereas the bottom 100 investors used more than 80 percent of their funds
for upgrading and capacity enhancement investments.29
Figure 1.16: Top 20 Project Sponsors by Type of Investment, 1990-2002 [$mm
cumulated]
AES Corporation
Electricite de France
Endesa (Chile)
SUEZ
VBC Energia
Iberdrola SA
Light Rio Servicos de Electricidade SA
Endesa (Spain)
Enersis
Cia. Naviera Perez Companc Divestiture
Greenfield project
Electricidade de Portugal SA Concession
Duke Energy Corp.
Enron
Banco do Brasil
Union Fenosa
Community Energy Alternatives (CEA)
Gener (Chilgener)
TotalFina
El Paso Energy International
InterGen
- 2,000 4,000 6,000 8,000 10,000
Source: PPI database, own calculations
28see Figure 1.16
29see Figure 1.17
22 Study on Investment and Private Sector Participation in Power Distribution in Latin America and
the Caribbean Region
Figure 1.17: Top 20 Project Sponsors by Use of Funds, 1990-2002 [$mm
cumulated]
AES Corporation
Electricite de France
Endesa (Chile)
SUEZ
VBC Energia
Iberdrola SA
Light Rio Servicos de Electricidade SA
Endesa (Spain)
Enersis
Cia. Naviera Perez Companc
Electricidade de Portugal SA Modernization, Expansion
Purchase of Govmt.assets
Duke Energy Corp.
Enron
Banco do Brasil
Union Fenosa
Community Energy Alternatives (CEA)
Gener (Chilgener)
TotalFina
El Paso Energy International
InterGen
- 2,000.00 4,000.00 6,000.00 8,000.00 10,000.00
Source: PPI database, own calculations
Chapter 1: Survey of Private Participation in the Latin American and Caribbean Power Sector 23
Table 1.4: Top 20 Project Sponsors by Total Investment (1990-2002)
Electricity
Distribution
and Electricity Integrated Total
Country transmission generation utilities investmt.2
Company Name1 of origin [%] [%] [%] [$mm]
AES Corporation US 37% 22% 41% 16,088
Enersis Chile 44% 2% 0% 7,408
Endesa (Spain) Spain 32% 13% 0% 7,311
Electricite de France France 11% 5% 27% 6,852
Iberdrola SA Spain 29% 11% 0% 6,444
Endesa (Chile) Chile 0% 38% 0% 6,154
Banco Bradesco Brazil 38% 0% 0% 6,076
VBC Energia Brazil 29% 8% 0% 5,951
Electricidade de Portugal SA Portugal 24% 4% 5% 5,150
SUEZ France 0% 26% 4% 4,796
Construcoes e Comercio Camargo
Correa Brazil 19% 3% 0% 3,552
Cia. Naviera Perez Companc Argentina 18% 2% 0% 3,268
Light Rio Servicos de Electricidade
SA Brazil 20% 0% 0% 3,169
Duke Energy Corp. US 0% 19% 0% 3,061
Chilectra Chile 18% 1% 0% 2,999
Mirant US 0% 1% 16% 2,621
Community Energy Alternatives
(CEA) US 14% 2% 0% 2,603
Enron US 9% 7% 0% 2,575
CMS Energy Corporation US 0% 15% 0% 2,464
Banco do Brasil Brazil 14% 0% 0% 2,234
Total 22.6% 11.3% 9.2% 100,776
Source: PPI database (2004), own calculations.
(1) Projects can be associated with more than one sponsor.
(2) Total investment from all sources in projects in which sponsor had an equity participation of 15 percent
or more.
Current Strategies of the Main Competitors
AES Corporation, United States
1.42 In 2004, more than half of AES's assets in the power sector were situated in Latin
America, with an investment portfolio that includes Argentina, Brazil, Chile, Colombia,
Venezuela, the Dominican Republic, El Salvador, Honduras, Mexico, and Panama. In
2002 and 2003, AES has undertaken a comprehensive global restructuring, including the
sale of 14 subsidiaries, with the exception of Brasilia Energia, all of which in regions
other than Latin America and the Caribbean. In the Latin American region, AES has
24 Study on Investment and Private Sector Participation in Power Distribution in Latin America and
the Caribbean Region
increased its stake in many companies, buying shares from other players who are
currently exiting the market.30 In addition, it was effectively forced to take over the
shares of several Argentinean joint ventures for a total of $ 376 million, including the
transfer of PSEG Global's 30 percent interest in the three Argentine distribution
companies EDELAP, EDEN and EDES, a 19 percent share in the 650-MW Central
Termica San Nicolas power plant, and a 33 percent interest in the 830-MW Parana power
plant, all abandoned by its partner PSEG.31
1.43 After defaulting on loans from its subsidiary Eletrobras and its Chilean subsidiary,
AES Gener, AES has systematically renegotiated the debt of all its subsidiaries in Brazil
and reduced Gener debt by $250 million.32 In the Dominican Republic, AES sold its
interests in the distribution company EdeEste, while maintaining the interests in
generation. In Argentina, AES notes that "In 2003, the political and social situation in
Argentina showed signs of stabilization, the Argentine peso appreciated to the U.S.
dollar, the economy and electricity demand started to recover" and that renegotiation of
utilities concessions remains open until the end of 2004.33
Empresa Nacional de Electricidad SA (Endesa), Spain
1.44 Endesa has been active in Latin America since the early 1990s. In June 2004,
Endesa's management stated that it will stop expanding operations in Latin America as it
tries to obtain returns on recent investments that have brought it control of 10 percent of
the continent's electricity sector34. To justify the risks on Latin American investments and
to recoup previous losses, the company is aiming for considerably higher returns on its
Latin American assets compared to its European portfolio.
1.45 Although Endesa plans to invest $2.9bn in Latin America over the next few years,
the bulk of these funds will mostly be employed to maintain existing assets rather than
undertake new investments.35 Endesa is actively seeking more local partners, so that
investment will come from local sources rather than Spain.36 Endesa's Chilean
subsidiary, Enersis, had to carry out a major financial restructuring in 2002, arranging an
extra $2.3 billion loans to avoid having to repay existing loans. Despite this, the credit
rating of Enersis has been reduced to BBB-.37 In Brazil however, Endesa decided to
reinvest in its distribution companies rather than agree to a refinancing arrangement with
Brazilian bank BNDES (as was done by other companies, like for example AES). In
Argentina Endesa is involved in negotiations with the government to try and retain its
30Hall (2004)
31http://www.gasandoil.com/goc/company/cnl13988.htm
32http://www.aes.com/aes/index?page=news&reqid=511079
33AES Annual report (2003)
34 Business News Americas-English February 2, 2004 Monday Endesa to halt LatAm expansion
35Hall (2004)
36 Business News Americas-English June 7, 2004 Monday Endesa seeks local partners in Argentina, Brazil
37 Business News Americas-English July 2, 2004 Friday Fitch affirms Endesa, Enersis BBB- ratings
Chapter 1: Survey of Private Participation in the Latin American and Caribbean Power Sector 25
investments, reclaim its dollarization agreement and increase electricity prices to improve
profits.38
Electricit� de France (EDF), France
1.46 Across the Latin American and Caribbean Region, EDF has invested in operations
in electricity generation and distribution in Argentina and Brazil, as well as in generation
facilities in Mexico. In 2003, operations in Mexico were mostly lucrative and profitability
steadily improved in its operations in Argentina and Brazil, but it lost nearly 1 billion
with its Brazilian distributor "Light.". EDF's strategy is now to concentrate on Europe.
1.47 In 2003, EDF brought arbitration cases to the World Bank's International Centre
for Settlement of Investment Disputes (ICSID) concerning the Argentinean government's
sudden ending of dollarization. EDF has also approached banks to begin restructuring the
financial liabilities of its subsidiaries. It has demanded price rises for its distribution
companies, but the Argentinean government has not granted any so far. The government
has instead decided to impose fines as a penalization for all blackouts that occurred
within its concession area since 2001. In July 2004, EDF announced it is selling its stake
in the Argentinean distributor Edemsa (Mendoza province) to a local business group.39
Iberdrola, Spain
1.48 Iberdrola is a Spanish company with investments in Brazil, Bolivia, Guatemala
and Mexico. Its main presence is in a group of distribution companies in the northeast of
Brazil. It has recently invested in a 520MW gas-fired generator in the region, all of the
output from which will be bought by Iberdrola's distribution companies. According to the
2003 annual report, this investment is fully funded from the surplus of Iberdrola's
Brazilian energy operations, not through imported capital.
1.49 Two of Iberdrola's Brazilian distribution companies, Coelba and Cosern, have
recently publicized plans to tap local capital markets by issuing bonds worth $143m and
$40m respectively.40
CMS Energy, United States
1.50 CMS Energy once had broad ambitions in Latin America's gas and power sectors,
but decided to slash its overseas presence in order to refocus on its home market (6m
customers throughout the state of Michigan). In October 2001, CMS Energy decided to
discontinue the operations of its international energy distribution business, but in 2003, it
reclassified a large part of its distribution assets as continuing operations due to its
inability to sell these assets.
38Hall (2004)
39Hall (2004)
40Hall (2004)
26 Study on Investment and Private Sector Participation in Power Distribution in Latin America and
the Caribbean Region
1.51 The company has been marketing its regional assets since late 2001, pursuing an
individual asset sale strategy, but is finding weak demand. Since 2003, the company
hopes to divest its 15 percent equity interest and associated US$140 million debt in 1,320
MW Argentine hydro generator El Chocon. However, the deal is contingent on the
provincial government of Neuquen, where the power station is located, making a planned
buyout offer for CMS' stake. Even if that transaction proceeds, CMS will still be left with
significant interests in three other Argentine power plants, in Argentine gas pipeline
TGN, in Chile's integrated gas and power project GasAtacama, and in Venezuelan state
utility SENECA.
1.52 In 2004, CMS announced a loss of $400m on its Argentinean operations.41
Comparable to EDF, it has taken court action against the government of Argentina's
devaluation of the Peso and the forced ending of dollarized end user tariffs.42
Mirant Corporation, United States
1.53 Mirant unloaded its money-losing 706 MW Chilean thermal generator Edelnor in
early 2002 for US$4.5 million. At year-end 2002, it also completed its exit from South
America by selling its 3.6 percent stake in CEMIG--Brazil's largest integrated power
generation and distribution company.43
CenterPoint, United States
1.54 Houston-based CenterPoint, formerly Reliant Energy, timed most of its Latin
America asset sales more fortunately than other investors, managing to sell off its stakes
in three Colombian and two Brazilian electric utilities in 2000. It also sold two Argentine
businesses in 2003: a 160 MW gas-fired cogenerator was sold for US$23.1 million in
February, and its 90 percent stake in Santiago del Estero provincial utility Edese was sold
for a reported US$850,000 in April.44
Tractebel/Suez, France
1.55 The energy division of Suez Tractebel has major stakes in generating companies
in Brazil, Chile, and Peru and Mexico as well as some gas distribution companies in
Mexico.
1.56 It has suspended investment in Brazil for the last two years and will not invest
further depending on the development of the government's policies for the energy
market45. Tractebel complains that the current policies put Tractebel "in an unfair
position by forcing it to compete with state-controlled generators."46
41CMS Energy 10-Q filed on 05/07/2004.
42Bloomberg News . 07/06/2002
43Hall (2004)
44Global Power Report, Feb 27, 2003
45Global Power Report March 18, 2004
46Hall (2004)
Chapter 1: Survey of Private Participation in the Latin American and Caribbean Power Sector 27
Enron, United States
1.57 Under a plan announced recently, a new holding "International Co" would
administrate "all or a portion" of Enron's interests in its international electric as well as its
natural gas utilities and pipelines. The gas pipeline and distribution assets include the
Electridade Servicios SA (Elektro) power distribution company, which has 1.5 million
customers in Sao Paulo State, Brazil.47
1.58 The power plant assets to be administered (and ultimately sold), comprise a 480-
MW gas-fired plant in Cuiaba, Mato Grosso, Brazil; 100 percent of Enron America del
Sur, which operates a 70-MW power facility in Argentina; a 51 percent holding in Bahia
Las Minas Corp. in Panama, which operates a 280-MW generating facility; 35 percent of
Empresa Energetica de Corinto, a 71-MW station in Nicaragua; a 38 percent holding in
the 234-MW Puerto Quetal Power plant in Guatemala; an 85 percent holding in
Smith/Enron Cogeneration LP, which operates a 185-MW unit in the Dominican
Republic.48
Private Asset Sales and Market Exits
1.59 In the last two years, planned and realized asset sales of private investors in the
Latin American and Caribbean Power sector have totaled more than $3.6 billion.49
Considering the weak demand and plunging prices for power market assets all across the
region, many more deals are likely to be in the pipeline but temporarily put on hold until
the market shows signs of recovery.
1.60 As to the distribution of private asset sales between the different subsectors, sales
of generation assets seem to have occurred in a considerably higher proportion (65
percent) than the share of private participation in generation assets across the Latin
American and Caribbean region (48 percent) would suggest.50 This disconnect is likely to
be a result of distribution assets being more difficult to market after the recent
occurrences of government interventions like tariff freezes and dis-indexation that
affected private investment in distribution very negatively.
47Hall (2004)
48Power in Latin America, May 23, 2003.
49see Table 1.5
50see Figure 1.18 and Figure 1.2
28 Study on Investment and Private Sector Participation in Power Distribution in Latin America and
the Caribbean Region
Figure 1.18: Private Asset Sales 2002-2004 [percent-share of according to $-value
of transaction]
Integrated Utilities Distribution
Transmission 13% 19%
3%
Generation
65%
Source: PPI database (2004), Bloomberg (2004), Proquest (2004), Power in Latin America (2004), own
calculations.
Chapter 1: Survey of Private Participation in the Latin American and Caribbean Power Sector 29
Table 1.5: Private Asset Sales, 2002-2004
Expected Expected Realized
Sale Holdings Price Price
Seller Project-, Asset name Subsector Country Date [%] [$mm] [$mm]
ABB Termobahia (190 MW) generation Brazil Aug-03 49 256
AES Corp AES Gener (,748 MW) generation Chile Mar-04 19 150
AES Brasilia Energia generation Brazil Mar-04 53.84 600
Alliant Cataguazes-Leopoldina group generation Brazil Jul-03 49.2 76
CenterPoint Argener, Cogen Plant (160 MW) generation Argentina Feb-03 100 23
CMS Energy CPEE group distribution Brazil Jun-03 93.9 92
Constellation,
PPL, Covanta Valle Hermoso (195 MW ) generation Bolivia May-03 50 34
Duke Energy Corani hydro generation Bolivia May-03 50 405
San Marcos thermoelectric
Duke Energy project (88 MW) generation Bolivia Dec-02 46 70
Electricite de Empresa Distribuidora de
France Electricidad de Mendoza distribution Argentina Jan-05 51 280
Endesa Cia. Electrica del Rio Maipo integrated Chile Mar-03 100 201
Endesa Chile Transmission lines transmission Chile Jul-03 110 100 110
Endesa Chile Cautillar hidroelectric generation Chile Mar-03 100 174
Endesa Chile Traselec integrated Chile Dec-00 100 1057
Enron Monterrey (254 MW) generation Mexico Dec-02 80 151
Enron Monterrey (254 MW) generation Mexico Jan-03 20 38
FirstEnergy Guaracachi generator (200 MW) generation Bolivia Apr-03 50 47
Iberdrola Ibener (124 MW ) generation Chile Aug-04 94.74 123
Mirant Empresa Electrica Del Norte integrated Chile Sep-01 82.3 380
Compania Boliviana de Energia
NRG Electrica (204 MW) generation Bolivia May-03 98 40
Bulo Bulo thermo plant (84
NRG MW) generation Bolivia May-03 60 40
NRG TermoRio (1,040-MW) generation Brazil Jan-04 15 80
PSEG, Sempra Luz del Sur distribution Peru Apr-04 13.6 31
Sempra Luz del Sur distribution Peru Nov-03 42 90
50% of Chilquinta Energia,
Sempra electricty distributor distribution Chile Mar-04 50 320
Edegel (Central Costanera
Southern Cone 2,302-MW, San Isidro 370-MW
Power Peru ) generation Peru Feb-04 24 135
Tractebel Enersur (339-MW) generation Peru Feb-04 21 48
Tuxpan, Hermosillo, and
Union Fenosa Nogales generators generation Mexico Jun-03 50 300
Xcel Energy Energia del Sur (76 MW) generation Argentina Mar-03 90 10
Source: Bloomberg Online, Proquest, Power in Latin America (2004)
30 Study on Investment and Private Sector Participation in Power Distribution in Latin America and
the Caribbean Region
Figure 1.19: Latin America and Caribbean Power Market, Recent Development
Domestic
Integrated Gas
and Power
(Petrobras)
Mitsubishi
Tractebel PSEG
Niche Reliant
Players? CMS
Mirant
New NR EDF
IPPs? G
Venture Union
Capital? Fenosa
Integrated
Gas and AES
Power? Iberdrol
a PPL
Local Power
Companies El Paso Enron
(Eletrobras, COPEL,
Cemig) TransCanada
EDP
Established
IPPs?
Endesa FirstEnergy
Source: based on Cano (2003)
Private Participation in Electricity Distribution
1.61 For most of the last decade, the bulk of privatizations in electricity distribution
worldwide took place in Latin America, where primarily US and Spanish companies
acquired and exchanged the great majority of available distribution assets. In the years
from 1990 to 2002 more than $30 billion worth of divestitures were undertaken in the
Latin American and Caribbean distribution subsector alone.
1.62 In the 12 years following 1990, Brazil comprised the greatest share in the region's
distribution network privatizations totaling more than $20 billion. Argentina followed
with a total $5.5 billion, and Colombia and Peru with $1.8 billion and $1.3 respectively.
In all four countries, private buyers were mostly North American and European. Regional
Chapter 1: Survey of Private Participation in the Latin American and Caribbean Power Sector 31
investors merely acted as local subsidiaries of American or European investors (i.e.
Endesa Chile, Enersis) or only played a minor role.51
1.63 The following section tries to outline the most important trends in the two main
areas of investment - network extensions and investments in modernization and utility
performance - and provide a brief account of the concerns stemming from major strategic
acquisitions of the region's key investors.
Private Investment in Network Extensions
1.64 One of the most common failures of the former state owned utilities in the Latin
American and Caribbean power sector and therefore a key concern for many reforming
governments has been a sustained under-investment in distribution infrastructure.
However, even in 2001, after more than a decade of distribution privatizations, almost 60
million people or 12% of the region's population, in particular poor peri-urban and rural
population, were still without access to electricity.52
1.65 The prevailing logic of market reforms throughout the region suggested that large
amounts of private capital would be invested in network extension and the formalization
of grid connections, in order to increase the market size and maximize consumer
payments.53
1.66 Concerning the expansion of privatized distribution networks, there is some
evidence to suggest that in some cases the private sector does better than public
provision. The private sector's technical and managerial competence, combined with
more sustainable pricing policies and better financial discipline, provide more resources
for investing in expansion and relax the investment constraints which prevailed under
public provision. As a result, in many cases the biggest gains from private provision
come through increased investments to meet increasing demand and serve previously
unattended consumers.54 However, it should be noted that network extension has also
been significantly subsidized by public funds. The optimality and effectiveness of these
interventions, e.g., Guatemala, has recently been questioned.
1.67 A recent example for the successful extension of access to electricity through
private participation has been the privatization of electricity distribution in Lima, which
has lead to a much larger coverage by the private companies with government support.55
Coverage of electricity has also increased in Chile since privatization, with the biggest
increases being seen for those with lowest income.56
51see Tables A1.1 to A1.10
52see Figure 1.20
53Estache/Foster/Wodon (2002)
54Harris (2003)
55see Figure 1.21, Torero/Pasco-Font (2001)
56Estache, et al. (2000)
32 Study on Investment and Private Sector Participation in Power Distribution in Latin America and
the Caribbean Region
1.68 However, contrary to the idea that market liberalization leads to market expansion
and thereby investments in new distribution networks, many critics have argued that
market reform, if left unregulated, is likely to benefit only established customers and
networks. This argument is based on the experience that private utility operators often
tend to discriminate amongst consumer groups if there are large differences of perceived
likely returns between them. Consequently, low-income areas and consumers are more
likely to be perceived as a high risk/low return market. This tendency is particularly
prevalent, where regulatory capacity is weaker, and where reform legislation and policies
have been rushed through quickly with no particular concern for low income groups and
rural access.57 Monetary incentives to expand the system are vital and can be done
through binding obligations and targets to increase access.
1.69 Without specially targeted schemes and interventions, privatized distribution
utilities have been likely to move away from the huge investments and financial risks
involved in improving and extending the electricity grid of rural, peri-urban and low-
income populations. In Argentina, the two privatized distribution companies in Buenos
Aires, being confronted with the needs of hundreds of thousands of low-income
consumers came up with a "4-year plan" involving significant assistance from the federal
and provincial governments.58
57Haselip (2004)
58Haselip (2004)
Chapter 1: Survey of Private Participation in the Latin American and Caribbean Power Sector 33
Figure 1.20: Percentages of Population without Access to Electricity
Haiti
Nicaragua
Honduras
Bolivia
Guatemala
Dominican Republic
El Salvador
Peru
Paraguay
Panama
Ecuador
Colombia
St. Vincent and the Grenadines
St. Lucia
St. Kitts and Nevis
Guyana
Grenada
Dominica
Belize
Antigua and Barbuda
Jamaica
Venezuela, RB
Argentina
Brazil
Mexico
Costa Rica
Uruguay
Chile
0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0%
Source: Olade (2003)
Figure 1.21: Increases in Access Following Distribution Privatization
Source: Torero and Pasco-Font (2001), World Bank/PPIAF (2002).
34 Study on Investment and Private Sector Participation in Power Distribution in Latin America and
the Caribbean Region
Private Investment in Utility Performance and Modernization
1.70 Before privatization, with governments often lacking the ability to efficiently
manage public enterprises or using state owned utilities for non-commercial objectives,
distribution companies were frequently over-staffed and badly managed. As a result,
taxpayers frequently ended up suffering the cost of those inefficiencies as governments
incurred substantial fiscal deficits supporting bungling utilities.59
1.71 Consequently, in many cases throughout the region, the almost immediate result
of privatizations of distribution utilities was a substantial improvement of labor
productivity60. For example, Chilectra, Chile's largest distribution utility, more than
doubled its annual sales of electricity since privatization, from 3,612 GWh in 1987 to
9,253 GWh in 2001, and its customer base grew from 973,000 to 1,289,000. The number
of workers, meanwhile, fell from 2,587 to 722, and the number of clients per worker
grew from 376 in 1987 to 1,785 in 2001.61
1.72 The Chileans often regarded as pioneers in improving the efficiency and quality
of service of privatized companies, later profited from their early expertise as they
participated in the privatization of many distribution companies in Argentina, Brazil,
Peru and Colombia. A good example of this pattern may be found in CODENSA, the
privatized Bogota distribution company that increased customers per employee from 800
to 1,900, and reduced the frequency of service interruptions and mean interruption time
by more than 30 percent in only two and a half years.62
1.73 A recent study of privatized Brazilian distribution utilities during the period from
1995 to 2000 observed impressive reductions of controllable costs per unit of up to 10%
and increases of labor productivity of more than 140%.63
59Harris(2003)
60Some of the productivity improvement implicit in the labor indicators could be attributed to the
outsourcing of a number of services that the newly privatized companies have undertaken.
61Fischer/Gutierrez/Serra
62Milan/Lora/Micco (2001)
63Mota (2003)
Chapter 1: Survey of Private Participation in the Latin American and Caribbean Power Sector 35
Figure 1.22: Reductions in Energy Losses Following Distribution Privatization
Source: Feler (1999). Losses include both technical and non-technical losses.
1.74 Non-technical losses and deficient payment discipline is a great challenge in
many countries of the Latin American and Caribbean region, with roughly half of the
region's countries showing losses above 20% of electricity fed into distribution
networks.64 Accordingly, in countries where deficient meter reading and billing was very
prevalent, one of the focal points of private participation was the investment in metering
as well as billing and collection mechanisms.65 Improvements in collections have often
been rapid in electricity companies with private participation. For instance in Chile,
losses in electricity transport and distribution have more than halved over the levels when
the sector was publicly owned.66
1.75 However, for many privatized utilities, the need for improvement of collections
and non- technical losses meant having to disconnect large quantities of illegally
connected end users and customers in default of payment.
1.76 In Argentina, many of the lowest-income groups were illegally connected to the
system, causing substantial leakage.67 Consequently, the first step taken by the privatized
companies was to cut the supply to these poor neighborhoods. Mainly due to open public
outrage, a significant portion of illegally connected end-users were incorporated into
regular service and their consumption registered and metered by the distribution
company. Before Argentina's financial meltdown, municipal authorities throughout the
country heavily subsidized the electricity services supplied to these poor areas. Sufficient
funds for these payments were generated through municipal charges or taxes applied to
64see Figure 1.23
65Harris (2003)
66Estache/Rodriguez-Pardina (1998)
67Chisari/Estache/Romero (1997)
36 Study on Investment and Private Sector Participation in Power Distribution in Latin America and
the Caribbean Region
electricity tariffs.68 However, in the aftermath of Argentina's economic crisis, these funds
have dried out and the percentage of non-technical losses is again rapidly increasing,
making the economic recovery of many distressed distribution companies even harder.
1.77 After the 1999-restructuring of the power sector in the Dominican Republic,
distribution networks were transferred to a consortium consisting of AES (US) and Union
Fenosa (Spain). Soon after the privatization, to reduce losses and keep up with customers
failing to pay, AES was cutting off some 2000 people a day, although it was reported that
more three quarters reconnected illegally.69
Figure 1.23: Non Technical Electricity Transmission and Distribution Losses in the
Latin American and Caribbean Region
Haiti
Nicaragua
Dominican Republic
Venezuela, RB
Ecuador
Guatemala
Colombia
Panama
Honduras
Brazil
Uruguay
Mexico
Argentina
El Salvador
Bolivia
Peru
Jamaica
Costa Rica
Chile
Paraguay
0% 10% 20% 30% 40% 50% 60%
Source: WDI Database (2004)
68EIA (2004)
69Bayliss (2001)
Chapter 1: Survey of Private Participation in the Latin American and Caribbean Power Sector 37
Private Investment in Strategic Assets and Market Control
1.78 Most of the downward pressure on prices from electricity restructuring
traditionally comes from promoting efficiency at the firm level through sector unbundling
and wholesale competition.70 In Argentina, for example, where a strongly competitive
market was established in the 1990s, electricity prices demonstrated a consistent
downward trend following the market restructuring in the early 1990s, falling about
$1.67/MWh annually.71
1.79 However, there is growing evidence that in some countries of the Latin American
and Caribbean region, effective price competition is increasingly hampered by a creeping
monopolization and re-integration of the market. In these countries, a few major
investors, through a series of strategic investments and mergers, were able to gain a
significant degree of market control through horizontal and/or vertical integration that
endangers the functioning of the market and may be difficult to remove.
1.80 In El Salvador, AES effectively gained control of three major distribution
companies comprising more than 60% of the market and serving 3.5 million people by
incrementally buying out the shares of the two participants (Grupo EDC of Venezuela
and Reliant (US)) that originally owned the distribution companies in a 50%/50% joint
venture. In addition, shortly after gaining control of the consortium, AES acquired
Compania de Luz Electrica de Santa Ana (CLESA) increasing its Salvadorian market
share by another 206,000 customers. As a result, AES is now in control of four of the five
companies that were subject to the 1998-privatization program.72
1.81 Other examples of re-integration issues are Peru, where Endesa's exercises a
dominant position in both generation and distribution sectors after it acquired control
over the Chilean holding company Enersis and its Peruvian subsidiaries, as well as
Argentina, where Endesa and Enersis hold substantial stakes in both of the largest
distribution companies.73
70Newberry (1999); Kessides (2004)
71Strategis(2004), http://strategis.ic.gc.ca/epic/internet/inimr-ri.nsf/en/gr-78498e.html
72Bayliss (2001), see Table A1.6
73Bayliss (2001), see Table A1.9
2
Analysis of Key Barriers to Investments
2.1 As presented and discussed in Chapter 1, the Latin American region has gone
through a broad, reform process in the electricity sector. While many countries (Chile,
Argentina) went through a full and comprehensive reform process wit many, new private
investors entering the market, others (Mexico, Uruguay) have only recently begun
attempts at liberalization and deregulation of their electricity markets. In between, there
are many examples of different degrees of reform and private investment. In most cases,
private participation was part of a broader reform that included some form of vertical
separation in the market structure.
2.2 The first section also revealed that private interest was widespread at the
beginning of the reform process, initially mainly directed towards divestitures and then
mostly to greenfield developments. It also became clear that private interest has been
gradually retracting from the electricity sector in the region, with many players leaving
the region and others not expanding investments any further.
2.3 From the perspective of the countries and their customers, reform has had some
mixed results. In most cases quality standards were raised and coverage increased, at the
same time as labor productivity improved substantially. However, reform has also seen
cross-ownership and de-facto re-integration in some cases, limiting therefore competition
and possible benefits intended at the beginning of the process. In other cases, market
liberalization has not led to additional investments in the distribution networks, benefiting
more the established residential and industrial customers than expanding service.
Nevertheless, the fiscal, financial and service benefits have outweighed the
disappointments, thus leading for a continued search for additional private investment in
the future, whilst correcting the mistakes and regulatory constraint of the recent past.
2.4 General economic and political aspects, as well as sectoral aspects are the main
reasons for the decline of private investment in the energy sector and the market exit by
many participants since the mid-1990s. This section provides an analysis of four aspects
that have been most common for the reduction in private sector interest in electricity
sector in Latin America: (i) macroeconomic barriers, (ii) institutional barriers, (iii)
legal/regulatory barriers and, (iv) political barriers. In addition a short summary of a
survey of international investors in the power sector will be presented, before concluding
with some recommendations.
39
40 Study on Investment and Private Sector Participation in Power Distribution in the Latin American
and Caribbean Region
2.5 The analysis below needs not only to describe reasons for decline in private sector
interest, but requires also considering the desired outcome of sector reform, in terms of
efficiency and consumer benefits. For example, policies or developments that protect
incumbent private sector operators from competition are an important element of the
problems facing electricity sector reform in Latin America. Similarly, allowing
horizontal re-integration through acquisitions by a single, private participant are not
desired outcomes and will inevitably lead to either (i) decline in interest by possible new,
private players, or (ii) dissatisfaction by the public in general. The latter is likely to lead
to obstacles in a continued reform process.
2.6 Two methodological clarifications are required. In this first part of the proposed
study, many of the aspects considered are more anecdotal in nature. More detailed
quantifications will be available in the next phase of the analysis, when in-depth country
studies will allow also interviews with investors and likely access to some more precise
data at companies' level.
2.7 The second aspect to be clarified involves the specific considerations with respect
to the distribution sector. While the analysis tries to concentrate on the aspects related to
and surrounding distribution companies, inevitably some of the aspects described are
either more general in nature (i.e. impact also other sub-sectors) or are originated by
institutional or regulatory issues affecting initially the generation sub-sector, but having
consequences for the distribution firms.
Macroeconomic Barriers
2.8 The best examples of macroeconomic barriers to private investment are Argentina
and Brazil. In both cases, devaluation and macroeconomic instability represented
unexpected shocks by private investors. Repercussions have been felt well beyond these
two countries. Many private investors (actually in generation and distribution) decided to
retract to their base countries avoiding exchange rate risk altogether.
2.9 In the case of Argentina, the collapse of the dollarization and currency board, led
in the late 1990's and early 2000's to pesification and desindexation together with
devaluation. This in turn, led to economic and financial imbalances for foreign investors
and caused major pullouts. A devaluation of 60% in real terms, directly reduced tariff
income by that amount.
2.10 In a simplified description of events, the Argentinean electricity sector disaster
occurred when private distributors started defaulting on dollar-denominated debt, because
the initial introduction and later devaluation of the peso made it difficult or even
impossible to honor the contracted obligations74. Private investors were betting on a
dollarized economy and had correspondingly entered into dollar-denominated debts
without any apparent need for hedging arrangements. Since the initial problems
74see, Bouille, Dubrovsky, Maurer (2003)
Chapter 2: Analysis of Key Barriers to Investments 41
encountered, several foreign distribution companies have taken legal steps against the
government because of losses caused by devaluation and conversion of dollar-
denominated tariffs.
2.11 The Brazilian case is similar, although somewhat different with respect to the
original causes. Private sector investors had to face heavy losses when the currency
crashed in the second half of the 1990's. The Brazilian devaluation (around 40%) was
not the consequence of the inflexibility of a currency board scheme, but rather the
outcome after the authorities were not able to undertake the required macroeconomic
reforms, especially introducing the required fiscal reforms. An important flavor of the
Brazilian crisis lies with the financing of the privatization of the distribution companies.
Local currency financing through BNDES (the local development bank) was not made
available for acquisition of companies by foreign investors75. Consequently, investors
had purchased the companies through dollar-denominated loans. Examples include AES
and Iberdrola amongst others.
2.12 Once the tariffs of a devalued "Real" were not sufficient to meet the contracted
obligations, many foreign investors were faced with the most typical and structural
problem of exchange rate risk. The investors were unable to meet the obligation with
respect to the debts contracted to purchase the companies. Since the original crisis, many
of these investors have been able to successfully restructure their external debt.
However, those efforts have come at high costs and negative results on the income
statements.
2.13 In addition to the "exchange rate risk" aspects of the Argentinean and Brazilian
cases, other macroeconomic barriers to continued private sector interest have been
derived from low sector profitability. This in turn is normally the result from retail tariffs
that do not cover costs. Fear by government of the short-term inflationary pressure of
tariff hikes, has often (i.e. Bolivia, Colombia, Guatemala) led to either delaying or
avoiding the necessary tariff adjustments altogether. Private investors were therefore
faced with rates of return well below their initial expectations.
2.14 An overall volatile macro environment or macroeconomic restrictions on debt
financing have been also important barriers to renewed private sector interest in investing
in the distribution sector in the region. For example, restrictions to local debt financing
(i.e. Costa Rica) have resulted in lacking behind with respect to the needed investment
targets to reduce losses and increase efficiency in the sector. Instable macroeconomic
conditions in some Central American (i.e. Honduras) and even South American countries
have limited the investment in required additional generation capacity, which in turn has
restricted the expansion of the distribution companies. Finally, an issue at stake in Central
America is the small size of countries/economy, which results in the need for supra-
national connections. This is a challenging undertaking given the political and economic
ramifications.
75see Rosenzweig, Voll, Pabon Agudelo (2004)
42 Study on Investment and Private Sector Participation in Power Distribution in the Latin American
and Caribbean Region
2.15 The late 1990's also saw a deepened recession in most of the region. This in itself
has unlikely reduced private sector interest. Private investors have a long-term view,
with possible short-term demand reductions not necessarily affecting the long-term return
expectations. However, macroeconomic crises have led in some cases (Colombia,
Argentina, Brazil, Mexico amongst others) to either a slower pace in the reform process
(passing of crucial legislation was or has been delayed like Mexico and Brazil), or reform
processes have been halted or even reversed. It is this type of instability and uncertainty
that has and will continue to affect private interest in the distribution sub-sector.
Institutional Barriers
2.16 Power sector reform in Latin America is at different stages for different countries.
Some countries are at advanced stages of liberalization (i.e. Chile, Argentina), some are
still testing different approaches (i.e. Mexico, Venezuela), while several have only started
to carefully undertake some initial steps towards liberalization (i.e. Uruguay and
Paraguay). However, even in those countries with more advanced reform processes,
substantial institutional barriers continue to prevail, that have led to the reduced interest
by private players76.
2.17 Again, the Argentinean case is representative. Despite the initial success in
attracting private investors into the generation and distribution sub-sectors, several
factors impeded a broader and more sustained transition towards private sector
participation. The cumbersome privatization processes with participation of multiple
agencies and legislative bodies made it extremely costly and difficult for new private
investors to participate in the bidding process. This was especially the case if regional
enterprises were involved77.
2.18 Another example of similar problems includes Bolivia78, where while the
Ministry of Capitalization was in charge of the privatization of the SOE in distribution,
poor inter-agency coordination followed in aspects related to finalizing the divestiture
process and more importantly in aspects of sector oversight.
2.19 However, institutional barriers to private investment in Argentina do not stop at
the initial divestiture process. Moreover, multiple entities for sector oversight and their
limited capabilities make it extremely difficult to understand the ultimate goals and
purposes of the authorities. Again, these problems become further exacerbated with a
lack of coordination with local authorities when regional markets are involved.
2.20 In addition to those cases where competition has been limited because of
incumbent market power or cross-ownership between generator and distributors, private
investors have been deterred due to the role and power of large omnipresent state-owned
76see Millan (2002) and Benavides (2002)
77see, Bouille, Dubrovsky, Maurer (2003)
78see O'Sullivan, Gutierrez (2000)
Chapter 2: Analysis of Key Barriers to Investments 43
players. This applies to such diverse cases as Mexico (two large integrated SOE's),
Costa Rica (one large integrated SOE), or Colombia (one large SOE in generation, and
several regionally owned companies in distribution). In some of the countries that have
only initiated the reform process, vertical and horizontal integration is the rule, especially
of privatization has not yet occurred on a broad basis. Such market structures deter
potential private investors, especially if they cannot foresee what the final intention in
terms of market structure is.
2.21 A pervasive characteristic that has led to lesser interest by private investors is the
continued role of the state in multiple functions79. The government often continues to
play a role in providing transmission and system operating services, while being the
regulator and having political oversight. This paired with a continued role of either
nationally or regionally owned enterprises in generation and distribution that are
competing with private players, has increased mistrust and led to lost confidence by
potential private investors.
2.22 Other institutional barriers and sectoral problems can be extrapolated from the
Brazilian example. Here, one ministerial agency has had and continues to have large
responsibilities including award of concessions, design of sector policies, and regulation
of new bidding processes amongst others80. This large amount of several and diverse
obligations centralized in one entity have led to a slowdown in planned capacity
enlargement, as well as in slow-paced new efforts for enhanced rural electrification.
Further private investment in distribution entities might be compromised by the most
recent legal changes that require distributors to forecast and contract new generating
capacity. This is not an easy task given the lack of data on supply and demand
projections. In addition, weak contract enforcement, continued vagueness in tariff-setting
provision and the aforementioned "dollar cost/real revenue" mismatch continue to impact
private sector interest in a big and growing market.
2.23 In many countries, responsibilities amongst several government entities are not
clear, making it difficult for private players to understand the "playing field." In
Colombia for example, there are overlapping areas of jurisdictional authority between
entities such as the regulatory body, the super-intendancy in charge of supervision and
control and that in charge of competition policies. In Colombia, as well as in many other
countries also the boundary between regulation and political oversight is not clear, often
leading to contradictory decisions and often changes in rules.
2.24 Unclear distribution of roles and responsibilities amongst Government entities is
not a minor issue. It leads to reduced confidence and trust by the new or potential private
investors. In Central America, examples range from the inexistence of a defined body for
79see Lamech, Saeed (2003)
80see Mota (2003)
44 Study on Investment and Private Sector Participation in Power Distribution in the Latin American
and Caribbean Region
sector coordination and policy (El Salvador) to undefined composition and capabilities of
the market administrator (Guatemala)81.
2.25 Another widespread institutional issue relates to the quality of service. It is
certainly the case that often the main reason for seeking private investors is improving the
quality in the provision of services. However, when technical and black losses, as well as
inefficient and unreliable operating systems are too widespread, private investors tend to
shy away from what seem insurmountable challenges.
2.26 In addition, private investors have complained about missing support or vague
policies in critical areas. Examples include, little if any support from host governments
to collect debts owed to them by customers. This applies even more so, when customers
are state-owned entities or public agencies. Even countries with more advanced reform
processes like Argentina, Chile, Bolivia or Colombia have never instituted policies or
legal frameworks to support collection efforts by newly privatized distribution
companies.
2.27 Another issue that has led to a disappointing view by many new investors in the
distribution sector relates to the inability of the institutions to respond to the challenges of
the ongoing operations under new market structures. Many of the independent or semi-
independent dispatch centers have not always been able to accommodate the required
technical complexity, or have often not been able to play the clearing house role required
for contracts signed between generators and distributors.
2.28 Finally, and critically important, the governmental institutions have often not
complied or delayed implementation of contractual commitments. These include,
amongst others, on-time payments of subsidies, regulatory or operational commitments
acquired in the privatization process, administrative support or shareholder agreements as
part of the post-divestiture market structure. In addition, promised Government support
to reduce technical losses, to disconnect non-paying customers, to expand service by
providing rights of way or environmental licenses has often been lacking. In specific
cases in Argentina and Brazil, the government committed to reimburse the privatized
utilities for the unpaid balances for "illegal connections" or to support installment of
meters or "legal" connections to the network. Many times these commitments were not
complied with as political resistance grew or fiscal resources were not available. .
Probably the most important complaint by private investors relates to this non-
compliance with established commitments82.
81see Ruffin (2002)
82see Lamech, Saeed (2003)
Chapter 2: Analysis of Key Barriers to Investments 45
Legal/Regulatory Barriers
2.29 The main and repeated issue that can be found with respect to regulatory barriers
relates to the inexistence of a truly independent regulator. This is the case in such
different countries as Argentina and Chile (with a long and well-developed experience on
sector reform) or Costa Rica. In the more advanced countries such as Argentina and
Chile, the identified problem has been leniency towards the accumulation of power by
certain market players (i.e. incumbent, private investors). In other cases, the missing
independence has sometimes favored existent regional or national state-owned
enterprises. In Colombia, for example, while the regulator is independent as per the letter
of the law, the financial and political dependency on the Central Government has
constrained its ability to maintain a truly neutral position83.
2.30 More than just the "prima-face" independence, private investors want to know
how regulators are selected and paid to understand the institutional set-up of the sectoral
regulators. Selection of regulators by the executive or legislative branch has different
implications for stability and responsiveness. Also, hiring experts from independent
technical lists as opposed to political appointees plays a major role. Furthermore,
payments of the sectoral budget depending on yearly approvals by Congress or
parliament certainly allows for less "continuity" than payments of contributions by the
companies themselves. Thus, private investors look not only at the "independence" in
terms of the actual relationship to Government ministries but moreover with respect to
appointment and payment of regulators and technical support.
2.31 In addition, many of the regulatory bodies face major challenges either because
they are new and have to learn the tasks ahead, the appointees and/or technical personnel
do not have the required capabilities, or it is faced with multiple tasks within the sector or
even across industries. Furthermore, in some countries (i.e. Chile) the regulator does not
have the required flexibility to set and enforce rules, given the complicated and stringent
legislative process to issue norms and regulations84.
2.32 A second general aspect found in many countries in the region, including those
with more advanced liberalization programs relates to limited competition. Take the
example of Chile. Even in this country that had one of the earliest and most successful
reform programs, market power of single players (i.e. ENDESA) makes new entry into
the market nearly impossible. Cross-ownership and market dominance have resulted in
de-facto vertical integration. A similar case is Peru, where horizontal re-integration has
been the case due to cross-ownership issues that have led to reduced competitive
pressure.
83Millan, Lora, Micco (2201)
84see Fischer, Gutierrez, Serra (2003)
46 Study on Investment and Private Sector Participation in Power Distribution in the Latin American
and Caribbean Region
2.33 The third group of regulatory barriers is linked to the price regulations
themselves. The regulations for distribution tariffs in Latin America range from indexed
retail tariffs with seasonal prices aimed at protecting final consumers from volatility,
through price cap systems with complicated formulas, reference prices set or
recommended by regulators to set rates of return for different time periods. Most of these
schemes have resulted in insufficient tariffs and are often onerous and difficult to
administer. Some of the countries that have started more recently with the reform efforts
need a total overhaul of the tariff system85.
2.34 In addition to the tariff regulations themselves, prevailing subsidy schemes
continue to impose challenges that have been difficult to accept by private investors.
While many countries have succeeded to reduce subsidies with the correspondent
political side effects (see below), regionally diversified and complicated cross-subsidy
schemes continue to exist. This together with non-compliance by the government to
transfer budgeted subsidies to the distribution companies has added to financial losses
and administrative burdens for the newly privatized or to be privatized discos. All of the
above has resulted in many distribution companies being under increased financial
distress.
2.35 A fourth regulatory/legal challenge to increased private investment lies with the
discriminatory application of rules. The most wide spread examples include regional
differences in the definition and application of regulations (i.e. Argentina and Brazil) to
inconsistent application of rules and penalties for meeting quality standards (i.e. Peru,
Brazil). This inconsistent application of rules has led to private investors limit any
further expansions or investment, as they do not see the conditions for a fair competitive
environment. In addition, the enforcement of quality standards is often weak, leading to
an uneven playing field between state-owned distributors and private competitors, who
often provide better services86.
2.36 Discrimination can also be found in how the rules are provided for different size
of consumers. In some cases, consumers do not have always access to the same rules and
options for price negotiations. This has two effects. It leads to dissatisfaction amongst
consumer types and groups, but also limits flexibility for distribution companies to
market their services to a broader clientele.
2.37 A fifth regulatory challenge facing many countries is the need to coordinate
electricity and gas market reform. Countries such as Brazil and Colombia require
development and deepening of gas exploration and production to sustain the required
thermo-electric capacity expansions, and be able to meet the increasing consumer
demands.
85see World Energy Council (2001)
86Tenenbaum (1995)
Chapter 2: Analysis of Key Barriers to Investments 47
2.38 Finally, rules and regulations should be broad and applicable to all players. Many
examples provide though for case-by-case regulations tailored for specific regions (i.e.
provinces in Argentina or states in Brazil), specific firms in specific markets (distributors
in Lima or Sao Paulo), interference with purely administrative or labor issues, intrusion
in concession contracts (Atlantic coast in Colombia), or reversal of policies agreed upon
(tariff increase schedules, capacity charges, separate billings for ancilliary services,
separate provision of public lighting amongst others). Private investors have seen their
base assumptions been challenged by those intrusion and discriminatory applications of
formerly foreseen or announced regulations.
Political barriers
2.39 Political barriers to private investment in the electricity sector of the Latin
American region take different flavors. Vested political interests can be linked to state-
owned incumbents, protecting generous collective bargaining agreements within those
SOE's, defending regional interests or bending rules forced by political pressures in the
legislature. However, some of the political barriers are also linked to the perception by
the public in general that privatization and liberalization has resulted in increased tariffs
(often a necessary requirement of the reform process) or dominant market power by
individual private players (see above). In addition, accusations of corruption in the
divestiture processes themselves, has often hurt the liberalization efforts87.
2.40 In many countries local governments have been and continue to be reluctant to
implement reforms and privatize enterprises (Argentina, Colombia, and Brazil). Often
regional government use distribution companies as cash-cows for the regional budget, or
use them for job-creation purposes. In Argentina, for example, where competitive
markets were supposed to allow electricity supply at the federal and provincial level, 10
of 24 provinces did not follow the divestiture scheme, creating a dual market structure for
the country as a whole. In many cases, provincial governments were reluctant to emulate
the federal example maintaining local utilities as sources for economic rents and vehicles
for political patronage88. This also applies in many other countries in the region.
2.41 Sector reform and privatization has often resulted in a sharp drop of sector
employment, or the elimination of previous generous collective bargaining agreements.
In Argentina, Bolivia, Brazil, Chile, amongst others, this has led to opposition by labor
unions. Private investors have been required to either face long labor conflicts or they
have had to pay out to be able to reduce employment figures to acceptable levels.
Opposition to private investments and employment reduction continues to play an
important role in reducing or eliminating private sector interest in the distribution
companies89.
87Bouille, Dubrovsky, Maurer (2003) and Estache, Rodriguez (1996)
88Bouille, Dubrovsky, Maurer (2003)
89see Millan (2001)
48 Study on Investment and Private Sector Participation in Power Distribution in the Latin American
and Caribbean Region
2.42 Tariff increases are often a needed element of sector reform. Even without
privatization, tariff hikes would have been needed to make distribution companies viable.
However, consumer groups and political opposition to sector reform have been able to
oppose tariff increases and overhauling of the tariff system, often even against the
backdrop of IMF programs. Even in more advanced reform countries such as Chile,
political interference into regulatory decisions is a common aspect. Regulatory decisions
are seldom isolated from political pressure and interests.
2.43 In some cases (i.e. Brazil, Colombia), the authorities have even allowed for
customers to back out from what they saw as too costly contractual arrangements,
effectively promoting breaching established obligations. In Venezuela, severe collection
problems exist amongst regional utilities and state entities. In addition, electricity prices
seem not driven by efficiency considerations, but politically controlled by the
Government. Without tariffs that recognize costs and necessary returns, private
investment will not be able to flow into the distribution sub-sector in the region.
2.44 Opposition to privatization and liberalization often is based on regional
differences. For example, Bolivia was only able to privatize isolated sub-systems as
political opposition grew harder in urban as opposes to rural areas90. In Brazil, regional
politicians have been able to block privatization of regional distribution companies. In
Panama, the creation of privatized regional distribution monopolies has responded to
regional interest groups, but has limited competition and efficiency gains, leading to
increased distribution losses.
2.45 In some countries sectoral reform has been blocked or delayed because of aspects
relating to capacity expansion between hydropower and thermo-electric generation. This
indirectly affects the distribution companies, either because it increases the costs or, more
importantly, because it limits the possibility to meet future demand. In Brazil, for
example, social issues and environmental opposition has limited the expansion of
hydropower. In Colombia, political intervention in favor of large hydro-electric projects
has made it unattractive for private investors to bet on the needed expansion of thermo-
electric plants91.
2.46 Two common trades that directly affect private investors in distribution
companies have to do with direct government action or inaction. In many countries
government entities are the worst customers when it comes to paying electricity bills.
Moreover, the authorities do not help distribution companies to collect the bills, by
disallowing disconnecting overdue customers. In other cases (i.e. Colombia)
Government bailouts of publicly owned discos, at least cast some doubt over the interest
and sustainability of reform to attract private investment.
90Barbu and Luzuriaga (1999)
91Ayala, Millan (2002)
Chapter 2: Analysis of Key Barriers to Investments 49
2.47 Finally, opposition to sector reform is often a political battlefield. Best example
is Mexico where lifting a constitutional prohibition is needed to liberalize the sector and
attract private investment. However for years now, a political deadlock has effectively
stopped any constitutional change. In many countries awarding concessions or allowing
private investment require approvals by Parliament, Congress or National Assembly,
creating an uncertainty that limits private interest in participating in costly, lengthy and
politically charged processes.
Investor Survey
2.48 In 2002 the World Bank undertook a survey of private investors in the power
sectors (see "What International Investors Look for When Investing in Developing
Countries", Energy and Mining Sector Board Discussion Paper No. 6, May 2003). 67
international investors were surveyed, of which 48 completed a written questionnaire.
2.49 The answers reveal key messages to government when trying to attract and retain
investment in the power sector, as well as the main concerns by the investment
community. The key messages for governments are that investors are willing to go or
stay in markets with good demand growth if (i) adequate cash flows in the sector are
ensured, (ii) laws and contracts are stable and enforced, (iii) government interference is
minimized, and (iv) responsiveness to the needs of investors are improved. The last point
relates mainly to the issues involved in administering and preparing transactions (i.e.
concessions or privatizations) in a timely fashion.
2.50 For Latin America, the investors responded to be most dissatisfied with Argentina
and Colombia as host countries, while most satisfied with Chile and Mexico. The main
concerns of private investors were legal and contractual frameworks that were unstable or
difficult to enforce, and issues involving consumer payment discipline and enforcement.
Independence of the regulatory entity was another prominent point. Many investors
pointed out to the potential benefit of having credit enhancements or guarantees made
available (see below for further discussion of this point).
2.51 With respect to the best experiences encountered, investors pointed largely to
solid retail tariff schemes and collection discipline, ability to exercise effective
management, government meeting established commitments, as well as ability to enforce
laws and contracts. The worst experiences expressed by investors related to
unresponsiveness to their needs and timeframes in transactions, insufficient retail tariff
levels, not sustained commitments acquired through contracts or regulations, and
arbitrary regulation processes.
Conclusions
2.52 It is apparent that some basic fundamentals need to be revisited to attract and
retain investors in the power sectors in Latin America. Foreign investors have been
harmed due to macroeconomic instability and regulatory changes that have affected
return expectations. While sectoral liberalization has advanced and sector reform has
50 Study on Investment and Private Sector Participation in Power Distribution in the Latin American
and Caribbean Region
gained momentum in most countries, investors will need reinforced security to believe
that power markets will work in the region.
2.53 With respect to macroeconomic issues, mainly exchange rate risk, as well as
regulatory compliance (meeting the required tariff levels), Government's in Latin
America might need to think about some temporary credit enhancement mechanisms.
Multilateral backing of exchange rate risk and regulatory commitments might be required
to gain the trust back while the fundamental changes in economic structure and
regulatory frameworks are sorted out.
2.54 In addition, there is a need to solidify the institutional basis. There is need for
sole responsibility for political oversight, while regulation and supervision should be
housed with truly independent government bodies. Incentives, both pecuniary and non-
pecuniary are required to attract professionals with the needed credentials, experience and
capabilities into the regulatory bodies. Also, there is an apparent need to revisit
competition policies. The reform process would not be able to be sustained if single
private investors are able to acquire unduly market power and vertical and horizontal re-
integration takes place.
2.55 The role of state and government remains another major issue. Competing
against large, omnipresent state-owned enterprises makes private investment unlikely.
Also, the potential for regulatory discrimination deters private interest.
2.56 Price and tariff regulations need to be simple, clear and be maintained over a long
time period. Also, retail tariffs need to reflect costs and allow for basic returns. While
subsidy schemes are often necessary, especially in a longer transition period to sector
reform, it is more likely that direct subsidies by the government (backed possibly by
guarantees) provide confidence to investors, than complicated and difficult to administer
cross-subsidy schemes.
2.57 Finally, challenges ahead rely with surmounting political opposition to sector
reform. This needs a transparent process in the divestiture, as well as communicating the
goals of private sector participation to the public in general. If majorities can be won for
the process, vocal minorities with vested interests might not be able to stop the reform.
The worst outcome, however, is for government's to promote non-compliance with
contractual obligations to gain political support. This will inevitably result in private
investors leaving the countries they sought of as possible recipients of new investment
and enhanced management techniques.
3
Estimates of Investments in the Electricity Sector
3.1 After having presented in chapter 1 the role of private participation in the region,
and having discussed the most important barriers to continued private investment in
chapter 2, chapter 3 is aimed at projecting required investment needs over the next
decade. To achieve that, three different set of figures will be presented. Two estimates
based on own calculations as discussed in more detail below, as well as some regional
investment projections by the World Energy Investment Outlook.
3.2 The estimates provided by own calculations are based on two different scenarios.
One scenarios is based on past growth estimates and extrapolates to project future
investments. A second scenario provides for calculations specifically for the distribution
sector based on network expansion goals for the rural and urban sector. In addition,
numbers for projected investments based on the latest World Energy Investment Outlook
are also provided.
3.3 The first calculation as summarized in Table 3.1 is based on growth estimates.
The base for the estimates is a 29 year median growth rate for consumption from 1972-
2001, which was equivalent to about 6.5% per annum. The cost for new capacity and the
capacity utilization rate per country are derived from 2003 estimates. The share
distribution corresponds to 60% generation, 30% distribution and 10% transmission as
derived from the World Energy Investment Outlook and the study by Fay and Yepes
(2003). This scenario can be called "business as usual", as it is based upon the historical
data on electricity consumption and the most recent cost estimates.
51
52 Study on Investment and Private Sector Participation in Power Distribution in the Latin American
and Caribbean Region
Table 3.1: Projected Investments in the Electricity Sector in Latin America 2005-
2015 (in m US$)
Country Generation Transmission Distribution Total
Argentina 8070 1345 4035 13450
Bolivia 420 70 210 700
Brazil 55012 9169 27506 91687
Chile 5941 424 2970 9335
Colombia 4226 704 2113 7043
Costa Rica 6045 1007 3022 10074
Dominican Republic 1532 255 766 2553
Ecuador 1908 318 954 3180
El Salvador 611 102 306 1019
Guatemala 713 119 357 1189
Hait� 67 11 33 111
Honduras 816 136 408 1360
Jamaica 1106 184 553 1843
M�xico 27132 4522 13566 45220
Nicaragua 92 15 46 153
Panama 535 89 268 892
Paraguay 1990 332 995 3317
Peru 1732 289 866 2887
Uruguay 578 96 289 963
Venezuela 11342 1890 5671 18903
Total Region 129868 21077 64934 215879
(Own estimates based on past and projected demand growth scenarios)
3.4 Under this scenario, total investment in the region between 2005 and 2015 is
estimated at around US 215 billion, of which close to US$65 billion corresponds to the
distribution sector. This distribution investment estimate obtained through the top-down
approach includes: (a) the necessary investment in augmentation due to the increased
demand stemming from income and population growth, (b) the investment required to
achieve universal coverage in urban areas and about 70% , and (c) maintenances and
rehabilitation of the distributions system. Overall and not surprisingly, countries such as
Brazil and Mexico will require investment of the order of US$90 billion for the first and
US$45 billion for the second. Financing these investment needs will represent a big
challenge. As examples, these figures equate to yearly investments of US$9 billion for
Brazil and close to US$5 billion for Mexico.
3.5 To identify the investment required to achieve a significant progress in rural
electrification only (i.e., 70% of households coverage) in all of the region's countries by
2015 and urban coverage to 100%, a bottom up approach was utilized. The costs per
connection are based on 2003 estimates derived from current costs for both rural and
urban electrification. The results of this scenario, which can be called "network
extension and increased access", are reported in Table 3.2. Under these estimates total
investment is over US$56 billion over the next decade, with US$11 billion related to new
investment in rural connections and close to US$45 billion to overall, urban network
Chapter 3: Estimates of Investments in the Electricity Sector 53
expansion. The difference between the first and the second should be interpreted as the
distribution investments in maintenance and rehabilitation necessary to meet the increase
in electricity demand for existing consumers.
Table 3.2: Projected Investments to Increase Access in Latin America in the
Distribution Sector 2005-2015 (in m US$)
Country Number of Rural Number of Total Investment Need Investment Need
Connections Connections Rural Network
Connections Connections
Argentina 713 10462 499 3139
Bolivia 489 2716 342 815
Brazil 3310 49755 2317 14927
Chile 250 4434 175 1330
Colombia 1390 12906 973 3872
Costa Rica 226 1172 158 352
Dominican Republic 524 2524 367 757
Ecuador 721 3830 504 1149
El Salvador 407 1951 285 585
Guatemala 1110 3974 777 1192
Hait� 803 2532 562 760
Honduras 632 2230 443 669
Jamaica 192 720 134 216
M�xico 3651 29531 2556 8859
Nicaragua 385 1762 269 529
Panama 193 865 135 259
Paraguay 371 1786 259 536
Peru 1001 7862 700 2358
Uruguay 28 894 20 268
Venezuela 437 7644 306 2293
Total Region 16833 149550 11781 44865
(Own estimates based on rural and urban network expansion)
3.6 The International Energy Agency foresees close to US$4 trillion in investment in
the electricity sector over the next decade92. Of this total, around US$220 billion will be
destined to the electricity sector in Latin America as per the reference scenario (see table
3.3) provided by decades in the World Energy Investment Outlook93. Around one third
of that investment, around US$80 billion will be directed to the distribution sector. These
figures are three times higher than those for the last three decades. The reasons for this
substantial increase relates to the capital intensity if the investments, as well as to the
92 World Energy Investment Outlook, International Energy Agency (2004)
93 While the Outlook provides figures for the decades as 2001-2010, 2011-2020, and 2021-2030,
approximations as per investment figures for the analyzed time frame of 2005-2015 can be provided based
on that reference scenario
54 Study on Investment and Private Sector Participation in Power Distribution in the Latin American
and Caribbean Region
likely shift from primary fuels to electricity, with demand increases in the region to be on
average around 5%.
Table 3.3: Reference Scenario: Investment in Electricity in Latin America (billion
US$)
2001-2010 2011-2020 2021-2030 2001-2030
Generation 86 111 120 317
Refurbishment 5 5 8 19
Transmission 32 41 55 128
Distribution 69 89 124 281
TOTAL 191 247 306 744
World Energy Investment Outlook, International Energy Agency (2004)
3.7 The analysis provided by the World Energy Investment Outlook further suggests
that close to 2% of the GDP in Latin America will have to be spent in energy investment
over the next two decades and that the share of energy investment in total domestic
investment in the region will be close to 8%.
3.8 As can be seen from the used reference scenario, the investment figures from own
calculations for the distribution sector (i.e. US$64 billion in the scenario based on
demand growth and US$55 billion based on network expansion targets) are in a similar
range as those provided based on growth, network expansion and maintenance costs by
the IEA. In all cases, it becomes clear that to achieve any of the projected targets, private
investment will have to reach levels very similar to those seen in the peak of private
investment in the distribution, i.e., close to US$8-10 billion in 1997/1998 period .
3.9 Fiscal constraints in all countries in the region paired with limited debt capacity
mean that private investment sources have to account for a substantial portion of this
investment. Moreover, public utilities remaining in the public sector face substantial
financial challenges, being unable to finance investments of this magnitude on their own.
Low revenues, high production costs, and political interference have resulted in
substantial liquidity and financial constraints.
3.10 While one potential source could be domestic savings, most of these savings in
Latin America are now linked to individual, pension savings accounts. Most of these
pension funds have either self-imposed or regulatory restrictions in terms of investing in
what are believed to be riskier investments such as infrastructure projects. Projects in the
electricity sector are viewed as including such risks as market, construction and operation
risks, that together with regulatory, judicial and force majeure risks lead to ratings that
are unlikely to meet the requirements of the more conservative domestic pension funds94.
94 While outside the scope of this analysis, it is important to mention that there are creative ways of
managing and distributing the risks in the electricity sector. The World Bank's guarantee program provides
interesting examples for risk guarantees in the distribution sector, with examples from Romania and
Slovakia amongst others.
Chapter 3: Estimates of Investments in the Electricity Sector 55
3.11 With domestic savings being an unlikely source to provide most of the needed
funding for energy investment in general, and electricity investment in particular, there is
clearly a need for external financing. With external debt, however representing close to
50% of GNP in Latin America, there is little room for increased debt financing.
Therefore the needs for direct private investment, whether domestic or foreign is crucial.
This however will require a perception of risk-return rewards that allows for such private
investors to come back to the region.
3.12 There is no doubt that without large flows of private direct investment in the
regional electricity sector in general, and in the distribution sector specifically, even the
less ambitious targets will not be achieved. This will require substantial efforts to
overcome the constraints mentioned in chapter 2 and provide the basis for a return to the
levels of private investment seen in the middle of the 1990's as mentioned in chapter 1.
4
Proposed Detailed Country Analysis
4.1 The analysis provided so far requires much more detailed specific country studies
that will define and propose an analytical framework for the identification of risks and
risk mitigation mechanisms involved in the distribution business. The analysis will
analyze the allocation of risks between different stakeholders (i.e. consumers,
government, generation and distribution companies, the tax payer in general) and will
include such risks as bill collection, service expansion commitments, supply obligations
and demand growth, capital and operating cost assumptions, macroeconomic variables
(i.e. inflation, foreign exchange risk), regulatory risks and political risks (including
subsidy and tariff regime).
4.2 The purpose is to provide for the proposed countries (see below) a risk allocation
matrix by analyzing market structures, legislative and regulatory frameworks and
different types of concession agreements and/or contractual arrangements for private
provision of electricity distribution services. Specific case studies within the proposed
countries are aimed at looking at risk mitigation examples and financing mechanisms
adopted by private investors. Such case studies will allow to analyze different
experiences of public-private partnerships and propose a way forward based on the
lessons learned, that will allow to propose mechanisms and structures that make more
likely the investment required over the next decade in the regional distribution sector.
4.3 The criteria for proposing and selecting four specific countries for more detailed
analysis are based on the following criteria: (i) current status with the electricity sector
reform and market structure; (ii) degree of private sector investment; (iii) investment
needs and network coverage; and (iv) reform sustainability and extent of some of the
identified barriers (i.e. macroeconomic, legal, regulatory, political). The proposed
countries below provide a wide range in terms of their abilities ad impediments to attract
foreign investments, are diverse in size and investment needs, and have a likely approach
to pursue an additional path of reform to revitalize private investment in the distribution
sector.
4.4 The four countries proposed for detailed country analysis are as follows: (i)
Argentina; (ii) Brazil; (iii) Colombia; and (iv) El Salvador. Argentina provides for an
example of substantial private investment in the distribution sector with a widespread
problem of trust and negative past experience. The country example provides for a rich
57
58 Study on Investment and Private Sector Participation in Power Distribution in the Latin American
and Caribbean Region
basis of experience and lessons learned from past failures and future requirements. Brazil
provides an example with such a substantial need for future investment, that it imposes a
challenge given its pure size. It is also an example of regulatory and market reform
failures and repeated trial and errors. Colombia is an example that provides a different
approach with profound reform and substantial private investment in the generation
sector, but very little reform and private investment in the distribution sector. Moreover,
it represents a case of repeated failures in attracting private investment to some of its
public regional utilities. El Salvador will provide the example of a small country with
large investment needs, but certainly more difficulties to attract private investment
despite its investment grade rating.
4.5 Together the four proposed countries are representative of a) different stages in
the reform process; b) differences in investment needs and size of future requirements; c)
past experiences and contractual arrangements; d) extent and pervasiveness of some of
the barriers analyzed in chapter 2; but e) are likely to pursue paths that will be looking at
attracting and promoting private investment into their distribution sectors.
Annex 1
Private Sector Investment in Latin America
59
60 Study on Investment and Private Sector Participation in Power Distribution in the Latin American
and Caribbean Region
Table A1.1: Divestitures in Electricity Distribution in Argentina, 1990 - 2002
Closure Subtype of % Total Sponsor
Country Project Name Year PPI Private Investmt. Country Sponsor
Edesur SA 1992 Full 100% 2,246 Argentina, Cia. Naviera Perez Companc,
Divestiture Chile Enersis
Edenor SA 1992 Full France, Electricite de France, Endesa
Divestiture 100% 1,443 Spain (Spain)
Empresa Distribuidora Partial
Electrica Atlantica SA 1997 Divestiture 90% 495 Italy Camuzzi Gazometri SpA
Empresa Distribuidora Full AES Corporation, Community
Electrica Norte SA 1997 Divestiture 100% 420 US Energy Alternatives (CEA)
Empresa Distribuidora
de Electricidad de 1998 Partial 51% 281 France, Electricite de France, Medinvert
Mendoza Divestiture Argentina
Empresa de Jose Cartellone Construcciones
Distribucion Electrica 1995 Partial 90% 190 Argentina Civiles SA, Compania General de
de Tucuman SA Divestiture Electricidad, Compania Nacional
Argentina de Fuerza Electrica
Empresa de
Distribucion de Full
Electricidad de Entre 1996 Divestiture 100% 161 US PSEG Global Inc.
Rios SA
Empresa Distribuidora Full AES Corporation, Community
Electrica Sur SA 1997 Divestiture 100% 145 US Energy Alternatives (CEA)
Empresa de Energia de Full Argentina, Sociedad Austral de Electricidad
Rio Negro SA 1996 Divestiture 100% 98 Italy (Saesa), Camuzzi Gazometri SpA
Empresa Distribuidora
de Electricidad La 1995 Full 100% 14 US GPU International
Rioja Divestiture
Empresa de Energia de Partial Argentina,
Catamarca 1996 Divestiture 90% 12 Germany IATE SA, Siemens AG
Empresa Distribuidora
de Electricidad de San 1993 Management 100% - Spain Union Fenosa
Luis contract
Total 5,505
Source: PPI-Database (2004)
Annex 1: Private Sector Investment in Latin America 61
Table A1.2: Divestitures in Electricity Distribution in Bolivia, 1990 - 2002
Closure Subtype % Total Sponsor
Country Project Name Year of PPI Private Investmt. Country Sponsor
Electricidad La Paz SA
and Empresa de Luz y Full Iberdrola SA, Consortium of
Fuerza Electrica de 1995 Divestiture100% 91 Spain investment funds
Bolivia Oruro SA
Empresa de Luz y
Fuerza Electrica 1995 Partial 50% 50 US PP&L Global Inc.
Cochabamba SA Divestiture
Total 142
Source: PPI-Database (2004)
62 Study on Investment and Private Sector Participation in Power Distribution in the Latin American
and Caribbean Region
Table A1.3: Divestitures in Electricity Distribution in Brazil, 1990 - 2002
Closure Subtype % Total Sponsor
Country Project Name Year of PPI Private Investmt. Country Sponsor
Light Rio Servicos de Partial 92% 4,297 US, AES Corporation, Electricite de
Electricidade SA 1996 Divestiture France France
Eletropaulo
Metropolitana de Light Rio Servicos de
Eletricidade SA 1998 Partial 66% 3,169 Brazil, Electricidade SA, AES
(Eletropaulo Divestiture US Corporation
Metropolitana)
Companhia de
Electricidade do Estado 1997 Partial 61% 2,234 Brazil, Banco do Brasil, Iberdrola SA
da Bahia (COELBA) Divestiture Spain
Companhia
NorteNordeste de Partial US, Community Energy Alternatives
Distribuicao de Energia 1997 Divestiture 90% 1,651 Brazil (CEA), VBC Energia
Eletrica
Companhia Centro-
Oeste de Distribuicao 1997 Partial 90% 1,529 US AES Corporation
de Energia Eletrica Divestiture
Elektro Eletricidade e Partial
Servicos SA (Elektro) 1998 Divestiture 99% 1,514 US Enron
Companhia Energetica Partial Spain,
Brazil do Ceara (Coelce) 1998 Divestiture 59% 1,282 Chile Endesa (Spain), Enersis
Companhia de
Electricidade do Estado Partial Chile, Enersis, Chilectra, Electricidade de
Rio de Janeiro SA 1996 Divestiture 78% 1,231 Chile, Portugal SA
(CERJ) Portugal
Empresa Bandeirante de Partial Portugal, Electricidade de Portugal SA,
Energia (EBE) 1998 Divestiture 96% 1,186 Brazil Companhia Paulista de Forca e
Luz (CPFL)
Companhia de Energia
Eletrica de Pernambuco 2000 Partial 79% 1,139 Spain, Iberdrola SA, Previ
(CELPE) Divestiture Brazil
Companhia Energetica
do Rio Grande do Norte 1997 Partial 86% 754 Spain Iberdrola SA
(Cosern) Divestiture
Companhia Energetica Partial
do Maranhao (CEMAR) 2000 Divestiture 85% 359 US PP&L Global Inc.
Companhia Eletrica de Partial
Borborema (CELB) 1999 Divestiture 75% 58 Brazil Cataguaz Leopoldina
Companhia Piratininga Full Companhia Paulista de Forca e
de Forca e Luz 2001 Divestiture 100% 26 Brazil Luz (CPFL)
Total 20,427
Source: PPI-Database (2004)
Annex 1: Private Sector Investment in Latin America 63
Table A1.4: Divestitures in Electricity Distribution in Colombia, 1990 - 2002
Closure Subtype % Total Sponsor
Country Project Name Year of PPI Private Investmt. Country Sponsor
Comercializadora y Chile,
Distribuidora de 1997 Partial 48% 1,226 Chile, Enersis, Chilectra, Endesa (Spain)
Energia SA Divestiture Spain
Colombia
Corelca Distribution 1998 Partial
Divestiture 65% 558 Spain Union Fenosa
Total 1,784
Source: PPI-Database (2004)
Table A1.5: Divestitures in Electricity Distribution in the Dominican Republic, 1990
- 2002
Closure Subtype % Total Sponsor
Country Project Name Year of PPI Private Investmt. Country Sponsor
Dominican Empresa Distribuidora Partial
Republic Electrica Este 1999 Divestiture 50% 109 US AES Corporation
Source: PPI-Database (2004)
Table A1.6: Divestitures in Electricity Distribution in El Salvador, 1990 - 2002
Closure Subtype % Total Sponsor
Country Project Name Year of PPI Private Investmt. Country Sponsor
Compania de
Alumbrado Electrico de 1998 Partial 75% 236 US AES Corporation
San Salvador (CAESS) Divestiture
Distribuidora de
Electricidad del Sur 1998 Partial 75% 180 US PP&L Global Inc.
(DELSUR) Divestiture
El Compania de Luz Partial AES Corporation, Energia Global
Salvador Electrica de Santa Ana 1998 80% 119 US
(CLESA) Divestiture Inc., De Sola Group
Empresa Electrica de Partial
Oriente (EEO) 1998 Divestiture 89% 61 US AES Corporation
Distribuidora Electrica
de Usulutan 1998 Full 100% 8 US, AES Corporation, Corporacion
(DEUSEM) Divestiture Venezuela Electricidad de Caracas
Total 604
Source: PPI-Database (2004)
64 Study on Investment and Private Sector Participation in Power Distribution in the Latin American
and Caribbean Region
Table A1.7: Divestitures in Electricity Distribution in Guatemala, 1990 - 2002
Closure Subtype % Total Sponsor
Country Project Name Year of PPI Private Investmt. Country Sponsor
Empresa de Spain, Iberdrola SA,
Distribucion Electrica 1998 Partial 88% 520 Portugal, Electricidade de
de Guatemala (EEGSA) Divestiture US Portugal SA, TECO
Power Services Corp.
Guatemala Empresa de
Distribucion de
Occidente & Empresa 1999 Partial 80% 101 Spain Union Fenosa
de Distribucion de Divestiture
Oriente
Total 621
Source: PPI-Database (2004)
Table A1.8: Divestitures in Electricity Distribution in Panama, 1990 - 2002
Closure Subtype % Total Sponsor
Country Project Name Year of PPI Private Investmt. Country Sponsor
EDE Metro Oeste and Partial
Chiriqui 1998 Divestiture 51% 212 Spain Union Fenosa
Panama
Constellation Power
Elektra Noreste, S.A. 1998 Partial US,
Divestiture 51% 90 Panama Inc., Primer Banco de
Ahorros, S.A.
Total 302
Source: PPI-Database (2004)
Annex 1: Private Sector Investment in Latin America 65
Table A1.9: Divestitures in Electricity Distribution in Peru, 1990 - 2002
Closure Subtype % Total Sponsor
Country Project Name Year of PPI Private Investmt. Country Sponsor
PSEG Global Inc., Sempra Energy
Luz del Sur SA 1994 Full 100% 677 US, US,
Divestiture others International, Latin American
Energy and Electricity Fund
Empresa de Chile,
Distribucion Electrica 1994 Partial 64% 412 Chile, Enersis, Chilectra, Endesa (Spain)
Lima Norte SA Divestiture Spain
Electro Norte Medio 1998 Partial
Divestiture 30% 68 Peru Jose Rodriguez Banda SA
Empresa Regional de
Servicio Publico de Partial Argentina, IATE SA, Tizon Constructora de
Electricidad del Sur 1997 Divestiture 90% 51 Peru Caminos
Medio SA
Peru Electro Noroeste 1998 Partial
Divestiture 30% 23 Peru Jose Rodriguez Banda SA
Electro Norte 1998 Partial
Divestiture 30% 22 Peru Jose Rodriguez Banda SA
Empresa de
Distribucion de Energia 1995 Partial 60% 10 Chile Endesa (Chile), Enersis, Chilectra
de Chancay SA Divestiture
Empresa de
Distribucion Electrica 1996 Full 100% 9 Chile, Chilquinta, Ontario Hydro
de Canete SA Divestiture Canada International
Electro Centro 1998 Partial
Divestiture 30% 1 Peru Jose Rodriguez Banda SA
Total 1,273
Source: PPI-Database (2004)
Table A1.10: Divestitures in Electricity Distribution in Venezuela, 1990 - 2002
Closure Subtype of Total Sponsor
Country Project Name Year PPI % Private Investmt. Country Sponsor
Compania Anonima Luz
Venezuela y Fuerza Electricas de 1998 Partial 94% 10 US Enron
Puerto Cabello Divestiture
Source: PPI-Database (2004)
Annex 2
Work Sheets for Calculation of Estimates for
Projected Investments
67
68 Study on Investment and Private Sector Participation in Power Distribution in the Latin American and Caribbean Region
Argentina
Consumption Growth Based
Estimate ("Business as
Usual")* Coverage Gap Based Estimate (According to Below Targets for Overall/Rural Access)*
2005- Total Number of Network Connections 2005-
Investment Need Power Sector 2010 Estimate $m 5,959 Needed 2010 Estimate 1000s 9,819
2005- Total Number of Network Connections 2005-
Investment Need Power Sector 2015 Estimate $m 13,450 Needed 2015 Estimate 1000s 10,462
Investment Need Power 2005- 2005-
Generation 2010 Estimate $m 3,575 Total Investment Need Network Extension 2010 Estimate $m 2,946
Investment Need Power 2005- 2005-
Generation 2015 Estimate $m 8,070 Total Investment Need Network Extension 2015 Estimate $m 3,139
Investment Need Power 2005- Number of Rural Network Connections 2005-
Transport 2010 Estimate $m 596 Needed 2010 Estimate 1000s 439
Investment Need Power 2005- Number of Rural Network Connections 2005-
Transport 2015 Estimate $m 1,345 Needed 2015 Estimate 1000s 713
Investment Need Power 2005- 2005-
Distribution 2010 Estimate $m 1,788 Investment Need Rural Network Extension 2010 Estimate $m 308
Investment Need Power 2005- 2005-
Distribution 2015 Estimate $m 4,035 Investment Need Rural Network Extension 2015 Estimate $m 499
(*) As upfront payment (no (*) As upfront payment (no discounted
discounted cash flow cash flow considerations).
considerations).
Assumptions Assumptions
Cost per Connection (overall) 2003 Estimate $ 300
Cost per Rural Connection 2003 Estimate $ 700
1972-
Base for Growth Rate Estimate 2001 Median years 29 Average Size of Household (overall) 2003 Estimate persons 4.0
Per-kWh-Cost of New Capacity 2003 Estimate $ 1,900 Average Size of Household (rural) 2003 Estimate persons 5.0
Capacity Utilization 2003 Estimate h.p.a. 7,500 Overall Electrification 2010 Target/Estimate % 98%
Generation Investment Share 2003 Estimate % 60% Overall Electrification 2015 Target/Estimate % 100%
Transmission Investment Share 2003 Estimate % 10% Rural Electrification 2010 Target/Estimate % 50%
Distribution Investment Share 2003 Estimate % 30% Rural Electrification 2015 Target/Estimate % 70%
Annex 2: Work Sheets for Calculation of Estimates for Projected Investments 69
Bolivia
Consumption Growth Based
Estimate ("Business as Usual")* Coverage Gap Based Estimate (According to Below Targets for Overall/Rural Access)*
2005- 2005-
Investment Need Power Sector 2010 Estimate $m 306 Total Number of Network Connections Needed 2010 Estimate 1000s 2,420
2005- 2005-
Investment Need Power Sector 2015 Estimate $m 699 Total Number of Network Connections Needed 2015 Estimate 1000s 2,716
2005- 2005-
Investment Need Power Generation 2010 Estimate $m 184 Total Investment Need Network Extension 2010 Estimate $m 726
2005- 2005-
Investment Need Power Generation 2015 Estimate $m 420 Total Investment Need Network Extension 2015 Estimate $m 815
2005- 2005-
Investment Need Power Transport 2010 Estimate $m 31 Number of Rural Network Connections Needed 2010 Estimate 1000s 339
2005- 2005-
Investment Need Power Transport 2015 Estimate $m 70 Number of Rural Network Connections Needed 2015 Estimate 1000s 489
Investment Need Power 2005- 2005-
Distribution 2010 Estimate $m 92 Investment Need Rural Network Extension 2010 Estimate $m 237
Investment Need Power 2005- 2005-
Distribution 2015 Estimate $m 210 Investment Need Rural Network Extension 2015 Estimate $m 342
(*) As upfront payment (no (*) As upfront payment (no discounted cash low
discounted cash flow considerations).
considerations).
Assumptions Assumptions
Cost per Connection (overall) 2003 Estimate $ 300
Cost per Rural Connection 2003 Estimate $ 700
1972-
Base for Growth Rate Estimate 2001 Median years 29 Average Size of Household (overall) 2003 Estimate persons 4.0
Per-kWh-Cost of New Capacity 2003 Estimate $ 1,900 Average Size of Household (rural) 2003 Estimate persons 5.0
Capacity Utilization 2003 Estimate h.p.a. 7,500 Overall Electrification 2010 Target/Estimate % 98%
Generation Investment Share 2003 Estimate % 60% Overall Electrification 2015 Target/Estimate % 100%
Transmission Investment Share 2003 Estimate % 10% Rural Electrification 2010 Target/Estimate % 50%
Distribution Investment Share 2003 Estimate % 30% Rural Electrification 2015 Target/Estimate % 70%
70 Study on Investment and Private Sector Participation in Power Distribution in the Latin American and Caribbean Region
Brazil
Consumption Growth Based
Estimate ("Business as
Usual")* Coverage Gap Based Estimate (According to Below Targets for Overall/Rural Access)*
2005- 2005-
Investment Need Power Sector 2010 Estimate $m 38,357 Total Number of Network Connections Needed 2010 Estimate 1000s 45,931
2005- 2005-
Investment Need Power Sector 2015 Estimate $m 91,687 Total Number of Network Connections Needed 2015 Estimate 1000s 49,755
Investment Need Power 2005- 2005-
Generation 2010 Estimate $m 23,014 Total Investment Need Network Extension 2010 Estimate $m 13,779
Investment Need Power 2005- 2005-
Generation 2015 Estimate $m 55,012 Total Investment Need Network Extension 2015 Estimate $m 14,927
Investment Need Power 2005- 2005-
Transport 2010 Estimate $m 3,836 Number of Rural Network Connections Needed 2010 Estimate 1000s 2,664
Investment Need Power 2005- 2005-
Transport 2015 Estimate $m 9,169 Number of Rural Network Connections Needed 2015 Estimate 1000s 3,310
Investment Need Power 2005- 2005-
Distribution 2010 Estimate $m 11,507 Investment Need Rural Network Extension 2010 Estimate $m 1,864
Investment Need Power 2005- 2005-
Distribution 2015 Estimate $m 27,506 Investment Need Rural Network Extension 2015 Estimate $m 2,317
(*) As upfront payment (no (*) As upfront payment (no discounted cash
discounted cash flow flow considerations).
considerations).
Assumptions Assumptions
Cost per Connection (overall) 2003 Estimate $ 300
Cost per Rural Connection 2003 Estimate $ 700
1972-
Base for Growth Rate Estimate 2001 Median years 29 Average Size of Household (overall) 2003 Estimate persons 4.0
Per-kWh-Cost of New Capacity 2003 Estimate $ 1,900 Average Size of Household (rural) 2003 Estimate persons 5.0
Capacity Utilization 2003 Estimate h.p.a. 7,500 Overall Electrification 2010 Target/Estimate % 98%
Generation Investment Share 2003 Estimate % 60% Overall Electrification 2015 Target/Estimate % 100%
Transmission Investment Share 2003 Estimate % 10% Rural Electrification 2010 Target/Estimate % 50%
Distribution Investment Share 2003 Estimate % 30% Rural Electrification 2015 Target/Estimate % 70%
Annex 2: Work Sheets for Calculation of Estimates for Projected Investments 71
Chile
Consumption Growth
Based Estimate ("Business
as Usual")* Coverage Gap Based Estimate (According to Below Targets for Overall/Rural Access)*
Investment Need Power Total Number of Network Connections 2005-
Sector 2005-2010 Estimate $m 4,237 Needed 2010 Estimate 1000s 4,098
Investment Need Power Total Number of Network Connections 2005-
Sector 2005-2015 Estimate $m 9,902 Needed 2015 Estimate 1000s 4,434
Investment Need Power 2005-
Generation 2005-2010 Estimate $m 2,542 Total Investment Need Network Extension 2010 Estimate $m 1,229
Investment Need Power 2005-
Generation 2005-2015 Estimate $m 5,941 Total Investment Need Network Extension 2015 Estimate $m 1,330
Investment Need Power Number of Rural Network Connections 2005-
Transport 2005-2010 Estimate $m 424 Needed 2010 Estimate 1000s 192
Investment Need Power Number of Rural Network Connections 2005-
Transport 2005-2015 Estimate $m 990 Needed 2015 Estimate 1000s 250
Investment Need Power 2005-
Distribution 2005-2010 Estimate $m 1,271 Investment Need Rural Network Extension 2010 Estimate $m 134
Investment Need Power 2005-
Distribution 2005-2015 Estimate $m 2,970 Investment Need Rural Network Extension 2015 Estimate $m 175
(*) As upfront payment (no (*) As upfront payment (no discounted cash
discounted cash flow flow considerations).
considerations).
Assumptions Assumptions
Cost per Connection (overall) 2003 Estimate $ 300
Cost per Rural Connection 2003 Estimate $ 700
Base for Growth Rate
Estimate 1972-2001 Median years 29 Average Size of Household (overall) 2003 Estimate persons 4.0
Per-kWh-Cost of New
Capacity 2003 Estimate $ 1,900 Average Size of Household (rural) 2003 Estimate persons 5.0
Capacity Utilization 2003 Estimate h.p.a. 7,500 Overall Electrification 2010 Target/Estimate % 98%
Generation Investment Share 2003 Estimate % 60% Overall Electrification 2015 Target/Estimate % 100%
Transmission Investment
Share 2003 Estimate % 10% Rural Electrification 2010 Target/Estimate % 50%
Distribution Investment
Share 2003 Estimate % 30% Rural Electrification 2015 Target/Estimate % 70%
72 Study on Investment and Private Sector Participation in Power Distribution in the Latin American and Caribbean Region
Colombia
Consumption Growth Based
Estimate ("Business as Usual")* Coverage Gap Based Estimate (According to Below Targets for Overall/Rural Access)*
2005- Total Number of Network Connections
Investment Need Power Sector 2010 Estimate $m 3,085 Needed 2005-2010 Estimate 1000s 11,730
2005- Total Number of Network Connections
Investment Need Power Sector 2015 Estimate $m 7,043 Needed 2005-2015 Estimate 1000s 12,906
Investment Need Power 2005- Total Investment Need Network
Generation 2010 Estimate $m 1,851 Extension 2005-2010 Estimate $m 3,519
Investment Need Power 2005- Total Investment Need Network
Generation 2015 Estimate $m 4,226 Extension 2005-2015 Estimate $m 3,872
2005- Number of Rural Network
Investment Need Power Transport 2010 Estimate $m 308 Connections Needed 2005-2010 Estimate 1000s 1,020
2005- Number of Rural Network
Investment Need Power Transport 2015 Estimate $m 704 Connections Needed 2005-2015 Estimate 1000s 1,390
Investment Need Power 2005- Investment Need Rural Network
Distribution 2010 Estimate $m 925 Extension 2005-2010 Estimate $m 714
Investment Need Power 2005- Investment Need Rural Network
Distribution 2015 Estimate $m 2,113 Extension 2005-2015 Estimate $m 973
(*) As upfront payment (no ( *) As upfront payment (no discounted cash flow considerations).
discounted cash flow
considerations).
Assumptions Assumptions
Cost per Connection (overall) 2003 Estimate $ 300
Cost per Rural Connection 2003 Estimate $ 700
1972-
Base for Growth Rate Estimate 2001 Median years 29 Average Size of Household (overall) 2003 Estimate persons 4.0
Per-kWh-Cost of New Capacity 2003 Estimate $ 1,900 Average Size of Household (rural) 2003 Estimate persons 5.0
Capacity Utilization 2003 Estimate h.p.a. 7,500 Overall Electrification 2010 Target/Estimate % 98%
Generation Investment Share 2003 Estimate % 60% Overall Electrification 2015 Target/Estimate % 100%
Transmission Investment Share 2003 Estimate % 10% Rural Electrification 2010 Target/Estimate % 50%
Distribution Investment Share 2003 Estimate % 30% Rural Electrification 2015 Target/Estimate % 70%
Annex 2: Work Sheets for Calculation of Estimates for Projected Investments 73
Costa Rica
Consumption Growth Based Coverage Gap Based Estimate (According to Below Targets for Overall/Rural
Estimate ("Business as Usual")* Access)*
2005- Total Number of Network Connections 2005-
Investment Need Power Sector 2010 Estimate $m 4,250 Needed 2010 Estimate 1000s 1,062
2005- Total Number of Network Connections 2005-
Investment Need Power Sector 2015 Estimate $m 10,075 Needed 2015 Estimate 1000s 1,172
2005- Total Investment Need Network 2005-
Investment Need Power Generation 2010 Estimate $m 2,550 Extension 2010 Estimate $m 318
2005- Total Investment Need Network 2005-
Investment Need Power Generation 2015 Estimate $m 6,045 Extension 2015 Estimate $m 352
2005- Number of Rural Network Connections 2005-
Investment Need Power Transport 2010 Estimate $m 425 Needed 2010 Estimate 1000s 159
2005- Number of Rural Network Connections 2005-
Investment Need Power Transport 2015 Estimate $m 1,007 Needed 2015 Estimate 1000s 226
2005- Investment Need Rural Network 2005-
Investment Need Power Distribution 2010 Estimate $m 1,275 Extension 2010 Estimate $m 112
2005- Investment Need Rural Network 2005-
Investment Need Power Distribution 2015 Estimate $m 3,022 Extension 2015 Estimate $m 158
(*) As upfront payment (no
discounted cash flow considerations). (*) As upfront payment (no discounted cash flow considerations).
Assumptions Assumptions
Cost per Connection (overall) 2003 Estimate $ 300
Cost per Rural Connection 2003 Estimate $ 700
1972-
Base for Growth Rate Estimate 2001 Median years 29 Average Size of Household (overall) 2003 Estimate persons 4.0
Per-kWh-Cost of New Capacity 2003 Estimate $ 1,900 Average Size of Household (rural) 2003 Estimate persons 5.0
Capacity Utilization 2003 Estimate h.p.a. 7,500 Overall Electrification 2010 Target/Estimate % 98%
Generation Investment Share 2003 Estimate % 60% Overall Electrification 2015 Target/Estimate % 100%
Transmission Investment Share 2003 Estimate % 10% Rural Electrification 2010 Target/Estimate % 50%
Distribution Investment Share 2003 Estimate % 30% Rural Electrification 2015 Target/Estimate % 70%
74 Study on Investment and Private Sector Participation in Power Distribution in the Latin American and Caribbean Region
Dominican Republic
Consumption Growth Based Estimate
("Business as Usual")* Coverage Gap Based Estimate (According to Below Targets for Overall/Rural Access)*
2005- Total Number of Network Connections 2005-
Investment Need Power Sector 2010 Estimate $m 1,046 Needed 2010 Estimate 1000s 2,301
2005- Total Number of Network Connections 2005-
Investment Need Power Sector 2015 Estimate $m 2,553 Needed 2015 Estimate 1000s 2,524
2005- 2005-
Investment Need Power Generation 2010 Estimate $m 627 Total Investment Need Network Extension 2010 Estimate $m 690
2005- 2005-
Investment Need Power Generation 2015 Estimate $m 1,532 Total Investment Need Network Extension 2015 Estimate $m 757
2005- Number of Rural Network Connections 2005-
Investment Need Power Transport 2010 Estimate $m 105 Needed 2010 Estimate 1000s 365
2005- Number of Rural Network Connections 2005-
Investment Need Power Transport 2015 Estimate $m 255 Needed 2015 Estimate 1000s 524
2005- 2005-
Investment Need Power Distribution 2010 Estimate $m 314 Investment Need Rural Network Extension 2010 Estimate $m 255
2005- 2005-
Investment Need Power Distribution 2015 Estimate $m 766 Investment Need Rural Network Extension 2015 Estimate $m 367
(*) As upfront payment (no discounted
(*) As upfront payment (no discounted cash flow considerations). cash flow considerations).
Assumptions Assumptions
Cost per Connection (overall) 2003 Estimate $ 300
Cost per Rural Connection 2003 Estimate $ 700
1972-
Base for Growth Rate Estimate 2001 Median years 29 Average Size of Household (overall) 2003 Estimate persons 4.0
Per-kWh-Cost of New Capacity 2003 Estimate $ 1,900 Average Size of Household (rural) 2003 Estimate persons 5.0
Capacity Utilization 2003 Estimate h.p.a. 7,500 Overall Electrification 2010 Target/Estimate % 98%
Generation Investment Share 2003 Estimate % 60% Overall Electrification 2015 Target/Estimate % 100%
Transmission Investment Share 2003 Estimate % 10% Rural Electrification 2010 Target/Estimate % 50%
Distribution Investment Share 2003 Estimate % 30% Rural Electrification 2015 Target/Estimate % 70%
Annex 2: Work Sheets for Calculation of Estimates for Projected Investments 75
Ecuador
Consumption Growth Based Estimate
("Business as Usual")* Coverage Gap Based Estimate (According to Below Targets for Overall/Rural Access)*
2005- Total Number of Network Connections 2005-
Investment Need Power Sector 2010 Estimate $m 1,288 Needed 2010 Estimate 1000s 3,461
2005- Total Number of Network Connections 2005-
Investment Need Power Sector 2015 Estimate $m 3,180 Needed 2015 Estimate 1000s 3,830
2005- 2005-
Investment Need Power Generation 2010 Estimate $m 773 Total Investment Need Network Extension 2010 Estimate $m 1,038
2005- 2005-
Investment Need Power Generation 2015 Estimate $m 1,908 Total Investment Need Network Extension 2015 Estimate $m 1,149
2005- Number of Rural Network Connections 2005-
Investment Need Power Transport 2010 Estimate $m 129 Needed 2010 Estimate 1000s 506
2005- Number of Rural Network Connections 2005-
Investment Need Power Transport 2015 Estimate $m 318 Needed 2015 Estimate 1000s 721
2005- 2005-
Investment Need Power Distribution 2010 Estimate $m 386 Investment Need Rural Network Extension 2010 Estimate $m 354
2005- 2005-
Investment Need Power Distribution 2015 Estimate $m 954 Investment Need Rural Network Extension 2015 Estimate $m 504
(*) As upfront payment (no discounted (*) As upfront payment (no discounted
cash flow considerations). cash flow considerations).
Assumptions Assumptions
Cost per Connection (overall) 2003 Estimate $ 300
Cost per Rural Connection 2003 Estimate $ 700
1972-
Base for Growth Rate Estimate 2001 Median years 29 Average Size of Household (overall) 2003 Estimate persons 4.0
Per-kWh-Cost of New Capacity 2003 Estimate $ 1,900 Average Size of Household (rural) 2003 Estimate persons 5.0
Capacity Utilization 2003 Estimate h.p.a. 7,500 Overall Electrification 2010 Target/Estimate % 98%
Generation Investment Share 2003 Estimate % 60% Overall Electrification 2015 Target/Estimate % 100%
Transmission Investment Share 2003 Estimate % 10% Rural Electrification 2010 Target/Estimate % 50%
Distribution Investment Share 2003 Estimate % 30% Rural Electrification 2015 Target/Estimate % 70%
76 Study on Investment and Private Sector Participation in Power Distribution in the Latin American and Caribbean Region
El Salvador
Consumption Growth Based Estimate Coverage Gap Based Estimate (According to Below Targets for Overall/Rural
("Business as Usual")* Access)*
2005- Total Number of Network Connections 2005-
Investment Need Power Sector 2010 Estimate $m 432 Needed 2010 Estimate 1000s 1,749
2005- Total Number of Network Connections 2005-
Investment Need Power Sector 2015 Estimate $m 1,018 Needed 2015 Estimate 1000s 1,951
2005- Total Investment Need Network 2005-
Investment Need Power Generation 2010 Estimate $m 259 Extension 2010 Estimate $m 525
2005- Total Investment Need Network
Investment Need Power Generation 2015 Estimate $m 611 Extension 2005-2015 Estimate $m 585
2005- Number of Rural Network Connections 2005-
Investment Need Power Transport 2010 Estimate $m 43 Needed 2010 Estimate 1000s 278
2005- Number of Rural Network Connections 2005-
Investment Need Power Transport 2015 Estimate $m 102 Needed 2015 Estimate 1000s 407
2005- Investment Need Rural Network 2005-
Investment Need Power Distribution 2010 Estimate $m 130 Extension 2010 Estimate $m 194
2005- Investment Need Rural Network 2005-
Investment Need Power Distribution 2015 Estimate $m 306 Extension 2015 Estimate $m 285
(*) As upfront payment (no discounted
cash flow considerations). (*) As upfront payment (no discounted cash flow considerations).
Assumptions Assumptions
Cost per Connection (overall) 2003 Estimate $ 300
Cost per Rural Connection 2003 Estimate $ 700
1972-
Base for Growth Rate Estimate 2001 Median years 29 Average Size of Household (overall) 2003 Estimate persons 4.0
Per-kWh-Cost of New Capacity 2003 Estimate $ 1,900 Average Size of Household (rural) 2003 Estimate persons 5.0
Capacity Utilization 2003 Estimate h.p.a. 7,500 Overall Electrification 2010 Target/Estimate % 98%
Generation Investment Share 2003 Estimate % 60% Overall Electrification 2015 Target/Estimate % 100%
Transmission Investment Share 2003 Estimate % 10% Rural Electrification 2010 Target/Estimate % 50%
Distribution Investment Share 2003 Estimate % 30% Rural Electrification 2015 Target/Estimate % 70%
Annex 2: Work Sheets for Calculation of Estimates for Projected Investments 77
Guatemala
Consumption Growth Based Coverage Gap Based Estimate (According to Below Targets for Overall/Rural
Estimate ("Business as Usual")* Access)*
2005- Total Number of Network Connections 2005-
Investment Need Power Sector 2010 Estimate $m 502 Needed 2010 Estimate 1000s 3,427
2005- Total Number of Network Connections 2005-
Investment Need Power Sector 2015 Estimate $m 1,188 Needed 2015 Estimate 1000s 3,974
2005- 2005-
Investment Need Power Generation 2010 Estimate $m 301 Total Investment Need Network Extension 2010 Estimate $m 1,028
2005- 2005-
Investment Need Power Generation 2015 Estimate $m 713 Total Investment Need Network Extension 2015 Estimate $m 1,192
2005- Number of Rural Network Connections 2005-
Investment Need Power Transport 2010 Estimate $m 50 Needed 2010 Estimate 1000s 724
2005- Number of Rural Network Connections 2005-
Investment Need Power Transport 2015 Estimate $m 119 Needed 2015 Estimate 1000s 1,110
2005- 2005-
Investment Need Power Distribution 2010 Estimate $m 151 Investment Need Rural Network Extension 2010 Estimate $m 507
2005- 2005-
Investment Need Power Distribution 2015 Estimate $m 357 Investment Need Rural Network Extension 2015 Estimate $m 777
(*) As upfront payment (no (*) As upfront payment (no discounted
discounted cash flow considerations). cash flow considerations).
Assumptions Assumptions
Cost per Connection (overall) 2003 Estimate $ 300
Cost per Rural Connection 2003 Estimate $ 700
1972-
Base for Growth Rate Estimate 2001 Median years 29 Average Size of Household (overall) 2003 Estimate persons 4.0
Per-kWh-Cost of New Capacity 2003 Estimate $ 1,900 Average Size of Household (rural) 2003 Estimate persons 5.0
Capacity Utilization 2003 Estimate h.p.a. 7,500 Overall Electrification 2010 Target/Estimate % 98%
Generation Investment Share 2003 Estimate % 60% Overall Electrification 2015 Target/Estimate % 100%
Transmission Investment Share 2003 Estimate % 10% Rural Electrification 2010 Target/Estimate % 50%
Distribution Investment Share 2003 Estimate % 30% Rural Electrification 2015 Target/Estimate % 70%
78 Study on Investment and Private Sector Participation in Power Distribution in the Latin American and Caribbean Region
Haiti
Consumption Growth Based Coverage Gap Based Estimate (According to Below Targets for Overall/Rural
Estimate ("Business as Usual")* Access)*
2005- Total Number of Network Connections 2005-
Investment Need Power Sector 2010 Estimate $m 45 Needed 2010 Estimate 1000s 2,265
2005- Total Number of Network Connections 2005-
Investment Need Power Sector 2015 Estimate $m 111 Needed 2015 Estimate 1000s 2,532
2005- Total Investment Need Network 2005-
Investment Need Power Generation 2010 Estimate $m 27 Extension 2010 Estimate $m 680
2005- Total Investment Need Network 2005-
Investment Need Power Generation 2015 Estimate $m 67 Extension 2015 Estimate $m 760
2005- Number of Rural Network Connections 2005-
Investment Need Power Transport 2010 Estimate $m 5 Needed 2010 Estimate 1000s 550
2005- Number of Rural Network Connections 2005-
Investment Need Power Transport 2015 Estimate $m 11 Needed 2015 Estimate 1000s 803
2005- Investment Need Rural Network 2005-
Investment Need Power Distribution 2010 Estimate $m 14 Extension 2010 Estimate $m 385
2005- Investment Need Rural Network 2005-
Investment Need Power Distribution 2015 Estimate $m 33 Extension 2015 Estimate $m 562
(*) As upfront payment (no
discounted cash flow considerations). (*) As upfront payment (no discounted cash flow considerations).
Assumptions Assumptions
Cost per Connection (overall) 2003 Estimate $ 300
Cost per Rural Connection 2003 Estimate $ 700
1972-
Base for Growth Rate Estimate 2001 Median years 29 Average Size of Household (overall) 2003 Estimate persons 4.0
Per-kWh-Cost of New Capacity 2003 Estimate $ 1,900 Average Size of Household (rural) 2003 Estimate persons 5.0
Capacity Utilization 2003 Estimate h.p.a. 7,500 Overall Electrification 2010 Target/Estimate % 98%
Generation Investment Share 2003 Estimate % 60% Overall Electrification 2015 Target/Estimate % 100%
Transmission Investment Share 2003 Estimate % 10% Rural Electrification 2010 Target/Estimate % 50%
Distribution Investment Share 2003 Estimate % 30% Rural Electrification 2015 Target/Estimate % 70%
Annex 2: Work Sheets for Calculation of Estimates for Projected Investments 79
Honduras
Consumption Growth Based Estimate Coverage Gap Based Estimate (According to Below Targets for Overall/Rural
("Business as Usual")* Access)*
2005- Total Number of Network 2005-
Investment Need Power Sector 2010 Estimate $m 550 Connections Needed 2010 Estimate 1000s 1,932
2005- Total Number of Network 2005-
Investment Need Power Sector 2015 Estimate $m 1,360 Connections Needed 2015 Estimate 1000s 2,230
2005- Total Investment Need Network 2005-
Investment Need Power Generation 2010 Estimate $m 330 Extension 2010 Estimate $m 580
2005- Total Investment Need Network 2005-
Investment Need Power Generation 2015 Estimate $m 816 Extension 2015 Estimate $m 669
2005- Number of Rural Network 2005-
Investment Need Power Transport 2010 Estimate $m 55 Connections Needed 2010 Estimate 1000s 414
2005- Number of Rural Network 2005-
Investment Need Power Transport 2015 Estimate $m 136 Connections Needed 2015 Estimate 1000s 632
2005- Investment Need Rural Network 2005-
Investment Need Power Distribution 2010 Estimate $m 165 Extension 2010 Estimate $m 290
2005- Investment Need Rural Network 2005-
Investment Need Power Distribution 2015 Estimate $m 408 Extension 2015 Estimate $m 443
(*) As upfront payment (no discounted
cash flow considerations). (*) As upfront payment (no discounted cash flow considerations).
Assumptions Assumptions
Cost per Connection (overall) 2003 Estimate $ 300
Cost per Rural Connection 2003 Estimate $ 700
1972-
Base for Growth Rate Estimate 2001 Median years 29 Average Size of Household (overall) 2003 Estimate persons 4.0
Per-kWh-Cost of New Capacity 2003 Estimate $ 1,900 Average Size of Household (rural) 2003 Estimate persons 5.0
Capacity Utilization 2003 Estimate h.p.a. 7,500 Overall Electrification 2010 Target/Estimate % 98%
Generation Investment Share 2003 Estimate % 60% Overall Electrification 2015 Target/Estimate % 100%
Transmission Investment Share 2003 Estimate % 10% Rural Electrification 2010 Target/Estimate % 50%
Distribution Investment Share 2003 Estimate % 30% Rural Electrification 2015 Target/Estimate % 70%
80 Study on Investment and Private Sector Participation in Power Distribution in the Latin American and Caribbean Region
Jamaica
Consumption Growth Based
Estimate ("Business as Usual")* Coverage Gap Based Estimate (According to Below Targets for Overall/Rural Access)*
2005- Total Number of Network
Investment Need Power Sector 2010 Estimate $m 772 Connections Needed 2005-2010 Estimate 1000s 676
2005- Total Number of Network
Investment Need Power Sector 2015 Estimate $m 1,843 Connections Needed 2005-2015 Estimate 1000s 720
2005- Total Investment Need
Investment Need Power Generation 2010 Estimate $m 463 Network Extension 2005-2010 Estimate $m 203
2005- Total Investment Need
Investment Need Power Generation 2015 Estimate $m 1,106 Network Extension 2005-2015 Estimate $m 216
2005- Number of Rural Network
Investment Need Power Transport 2010 Estimate $m 77 Connections Needed 2005-2010 Estimate 1000s 132
2005- Number of Rural Network
Investment Need Power Transport 2015 Estimate $m 184 Connections Needed 2005-2015 Estimate 1000s 192
2005- Investment Need Rural
Investment Need Power Distribution 2010 Estimate $m 232 Network Extension 2005-2010 Estimate $m 92
2005- Investment Need Rural
Investment Need Power Distribution 2015 Estimate $m 553 Network Extension 2005-2015 Estimate $m 134
(*) As upfront payment (no
discounted cash flow considerations). (*) As upfront payment (no discounted cash flow considerations).
Assumptions Assumptions
Cost per Connection
(overall) 2003 Estimate $ 300
Cost per Rural Connection 2003 Estimate $ 700
1972- Average Size of Household
Base for Growth Rate Estimate 2001 Median years 29 (overall) 2003 Estimate persons 4.0
Average Size of Household
Per-kWh-Cost of New Capacity 2003 Estimate $ 1,900 (rural) 2003 Estimate persons 5.0
Capacity Utilization 2003 Estimate h.p.a. 7,500 Overall Electrification 2010 Target/Estimate % 98%
Generation Investment Share 2003 Estimate % 60% Overall Electrification 2015 Target/Estimate % 100%
Transmission Investment Share 2003 Estimate % 10% Rural Electrification 2010 Target/Estimate % 50%
Distribution Investment Share 2003 Estimate % 30% Rural Electrification 2015 Target/Estimate % 70%
Annex 2: Work Sheets for Calculation of Estimates for Projected Investments 81
Mexico
Consumption Growth Based Estimate
("Business as Usual")* Coverage Gap Based Estimate (According to Below Targets for Overall/Rural Access)*
2005- Total Number of Network Connections 2005-
Investment Need Power Sector 2010 Estimate $m 19,149 Needed 2010 Estimate 1000s 26,931
2005- Total Number of Network Connections 2005-
Investment Need Power Sector 2015 Estimate $m 45,221 Needed 2015 Estimate 1000s 29,531
2005- 2005-
Investment Need Power Generation 2010 Estimate $m 11,489 Total Investment Need Network Extension 2010 Estimate $m 8,079
2005- 2005-
Investment Need Power Generation 2015 Estimate $m 27,132 Total Investment Need Network Extension 2015 Estimate $m 8,859
2005- Number of Rural Network Connections 2005-
Investment Need Power Transport 2010 Estimate $m 1,915 Needed 2010 Estimate 1000s 2,557
2005- Number of Rural Network Connections 2005-
Investment Need Power Transport 2015 Estimate $m 4,522 Needed 2015 Estimate 1000s 3,651
2005- 2005-
Investment Need Power Distribution 2010 Estimate $m 5,745 Investment Need Rural Network Extension 2010 Estimate $m 1,790
2005- 2005-
Investment Need Power Distribution 2015 Estimate $m 13,566 Investment Need Rural Network Extension 2015 Estimate $m 2,556
(*) As upfront payment (no discounted (*) As upfront payment (no discounted cash
cash flow considerations). flow considerations).
Assumptions Assumptions
Cost per Connection (overall) 2003 Estimate $ 300
Cost per Rural Connection 2003 Estimate $ 700
1972-
Base for Growth Rate Estimate 2001 Median years 29 Average Size of Household (overall) 2003 Estimate persons 4.0
Per-kWh-Cost of New Capacity 2003 Estimate $ 1,900 Average Size of Household (rural) 2003 Estimate persons 5.0
Capacity Utilization 2003 Estimate h.p.a. 7,500 Overall Electrification 2010 Target/Estimate % 98%
Generation Investment Share 2003 Estimate % 60% Overall Electrification 2015 Target/Estimate % 100%
Transmission Investment Share 2003 Estimate % 10% Rural Electrification 2010 Target/Estimate % 50%
Distribution Investment Share 2003 Estimate % 30% Rural Electrification 2015 Target/Estimate % 70%
82 Study on Investment and Private Sector Participation in Power Distribution in the Latin American and Caribbean Region
Nicaragua
Consumption Growth Based Estimate
("Business as Usual")* Coverage Gap Based Estimate (According to Below Targets for Overall/Rural Access)*
2005- Total Number of Network Connections 2005-
Investment Need Power Sector 2010 Estimate $m 71 Needed 2010 Estimate 1000s 1,523
2005- Total Number of Network Connections 2005-
Investment Need Power Sector 2015 Estimate $m 154 Needed 2015 Estimate 1000s 1,762
2005- Total Investment Need Network 2005-
Investment Need Power Generation 2010 Estimate $m 42 Extension 2010 Estimate $m 457
2005- Total Investment Need Network 2005-
Investment Need Power Generation 2015 Estimate $m 92 Extension 2015 Estimate $m 529
2005- Number of Rural Network Connections 2005-
Investment Need Power Transport 2010 Estimate $m 7 Needed 2010 Estimate 1000s 254
2005- Number of Rural Network Connections 2005-
Investment Need Power Transport 2015 Estimate $m 15 Needed 2015 Estimate 1000s 385
2005- Investment Need Rural Network 2005-
Investment Need Power Distribution 2010 Estimate $m 21 Extension 2010 Estimate $m 178
2005- Investment Need Rural Network 2005-
Investment Need Power Distribution 2015 Estimate $m 46 Extension 2015 Estimate $m 269
(*) As upfront payment (no discounted
cash flow considerations). (*) As upfront payment (no discounted cash flow considerations).
Assumptions Assumptions
Cost per Connection (overall) 2003 Estimate $ 300
Cost per Rural Connection 2003 Estimate $ 700
1972-
Base for Growth Rate Estimate 2001 Median years 29 Average Size of Household (overall) 2003 Estimate persons 4.0
Per-kWh-Cost of New Capacity 2003 Estimate $ 1,900 Average Size of Household (rural) 2003 Estimate persons 5.0
Capacity Utilization 2003 Estimate h.p.a. 7,500 Overall Electrification 2010 Target/Estimate % 98%
Generation Investment Share 2003 Estimate % 60% Overall Electrification 2015 Target/Estimate % 100%
Transmission Investment Share 2003 Estimate % 10% Rural Electrification 2010 Target/Estimate % 50%
Distribution Investment Share 2003 Estimate % 30% Rural Electrification 2015 Target/Estimate % 70%
Annex 2: Work Sheets for Calculation of Estimates for Projected Investments 83
Panama
Consumption Growth
Based Estimate
("Business as Usual")* Coverage Gap Based Estimate (According to Below Targets for Overall/Rural Access)*
Total Number of Network Connections 2005-
Investment Need Power Sector 2005-2010 Estimate $m 386 Needed 2010 Estimate 1000s 787
Total Number of Network Connections 2005-
Investment Need Power Sector 2005-2015 Estimate $m 892 Needed 2015 Estimate 1000s 865
2005-
Investment Need Power Generation 2005-2010 Estimate $m 231 Total Investment Need Network Extension 2010 Estimate $m 236
2005-
Investment Need Power Generation 2005-2015 Estimate $m 535 Total Investment Need Network Extension 2015 Estimate $m 259
Number of Rural Network Connections 2005-
Investment Need Power Transport 2005-2010 Estimate $m 39 Needed 2010 Estimate 1000s 133
Number of Rural Network Connections 2005-
Investment Need Power Transport 2005-2015 Estimate $m 89 Needed 2015 Estimate 1000s 193
2005-
Investment Need Power Distribution 2005-2010 Estimate $m 116 Investment Need Rural Network Extension 2010 Estimate $m 93
2005-
Investment Need Power Distribution 2005-2015 Estimate $m 268 Investment Need Rural Network Extension 2015 Estimate $m 135
(*) As upfront payment (no
discounted cash flow (*) As upfront payment (no discounted cash
considerations). flow considerations).
Assumptions Assumptions
Cost per Connection (overall) 2003 Estimate $ 300
Cost per Rural Connection 2003 Estimate $ 700
Base for Growth Rate Estimate 1972-2001 Median years 29 Average Size of Household (overall) 2003 Estimate persons 4.0
Per-kWh-Cost of New Capacity 2003 Estimate $ 1,900 Average Size of Household (rural) 2003 Estimate persons 5.0
Capacity Utilization 2003 Estimate h.p.a. 7,500 Overall Electrification 2010 Target/Estimate % 98%
Generation Investment Share 2003 Estimate % 60% Overall Electrification 2015 Target/Estimate % 100%
Transmission Investment Share 2003 Estimate % 10% Rural Electrification 2010 Target/Estimate % 50%
Distribution Investment Share 2003 Estimate % 30% Rural Electrification 2015 Target/Estimate % 70%
84 Study on Investment and Private Sector Participation in Power Distribution in the Latin American and Caribbean Region
Paraguay
Consumption Growth Based Coverage Gap Based Estimate (According to Below Targets for Overall/Rural
Estimate ("Business as Usual")* Access)*
Total Number of Network Connections 2005-
Investment Need Power Sector 2005-2010 Estimate $m 1,226 Needed 2010 Estimate 1000s 1,555
Total Number of Network Connections 2005-
Investment Need Power Sector 2005-2015 Estimate $m 3,316 Needed 2015 Estimate 1000s 1,786
Total Investment Need Network 2005-
Investment Need Power Generation 2005-2010 Estimate $m 736 Extension 2010 Estimate $m 467
Total Investment Need Network 2005-
Investment Need Power Generation 2005-2015 Estimate $m 1,990 Extension 2015 Estimate $m 536
Number of Rural Network 2005-
Investment Need Power Transport 2005-2010 Estimate $m 123 Connections Needed 2010 Estimate 1000s 253
Number of Rural Network 2005-
Investment Need Power Transport 2005-2015 Estimate $m 332 Connections Needed 2015 Estimate 1000s 371
Investment Need Rural Network 2005-
Investment Need Power Distribution 2005-2010 Estimate $m 368 Extension 2010 Estimate $m 177
Investment Need Rural Network 2005-
Investment Need Power Distribution 2005-2015 Estimate $m 995 Extension 2015 Estimate $m 259
(*) As upfront payment (no (*) As upfront payment (no
discounted cash flow considerations). discounted cash flow considerations).
Assumptions Assumptions
Cost per Connection (overall) 2003 Estimate $ 300
Cost per Rural Connection 2003 Estimate $ 700
Base for Growth Rate Estimate 1972-2001 Median years 29 Average Size of Household (overall) 2003 Estimate persons 4.0
Per-kWh-Cost of New Capacity 2003 Estimate $ 1,900 Average Size of Household (rural) 2003 Estimate persons 5.0
Capacity Utilization 2003 Estimate h.p.a. 7,500 Overall Electrification 2010 Target/Estimate % 98%
Generation Investment Share 2003 Estimate % 60% Overall Electrification 2015 Target/Estimate % 100%
Transmission Investment Share 2003 Estimate % 10% Rural Electrification 2010 Target/Estimate % 50%
Distribution Investment Share 2003 Estimate % 30% Rural Electrification 2015 Target/Estimate % 70%
Annex 2: Work Sheets for Calculation of Estimates for Projected Investments 85
Peru
Consumption Growth Based
Estimate ("Business as Usual")* Coverage Gap Based Estimate (According to Below Targets for Overall/Rural Access)*
2005- Total Number of Network Connections 2005-
Investment Need Power Sector 2010 Estimate $m 1,291 Needed 2010 Estimate 1000s 7,158
2005- Total Number of Network Connections 2005-
Investment Need Power Sector 2015 Estimate $m 2,886 Needed 2015 Estimate 1000s 7,862
2005- 2005-
Investment Need Power Generation 2010 Estimate $m 775 Total Investment Need Network Extension 2010 Estimate $m 2,148
2005- 2005-
Investment Need Power Generation 2015 Estimate $m 1,732 Total Investment Need Network Extension 2015 Estimate $m 2,358
2005- Number of Rural Network Connections 2005-
Investment Need Power Transport 2010 Estimate $m 129 Needed 2010 Estimate 1000s 712
2005- Number of Rural Network Connections 2005-
Investment Need Power Transport 2015 Estimate $m 289 Needed 2015 Estimate 1000s 1,001
2005- 2005-
Investment Need Power Distribution 2010 Estimate $m 387 Investment Need Rural Network Extension 2010 Estimate $m 498
2005- 2005-
Investment Need Power Distribution 2015 Estimate $m 866 Investment Need Rural Network Extension 2015 Estimate $m 700
(*) As upfront payment (no (*) As upfront payment (no discounted cash
discounted cash flow flow considerations).
considerations).
Assumptions Assumptions
Cost per Connection (overall) 2003 Estimate $ 300
Cost per Rural Connection 2003 Estimate $ 700
1972-
Base for Growth Rate Estimate 2001 Median years 29 Average Size of Household (overall) 2003 Estimate persons 4.0
Per-kWh-Cost of New Capacity 2003 Estimate $ 1,900 Average Size of Household (rural) 2003 Estimate persons 5.0
Capacity Utilization 2003 Estimate h.p.a. 7,500 Overall Electrification 2010 Target/Estimate % 98%
Generation Investment Share 2003 Estimate % 60% Overall Electrification 2015 Target/Estimate % 100%
Transmission Investment Share 2003 Estimate % 10% Rural Electrification 2010 Target/Estimate % 50%
Distribution Investment Share 2003 Estimate % 30% Rural Electrification 2015 Target/Estimate % 70%
86 Study on Investment and Private Sector Participation in Power Distribution in the Latin American and Caribbean Region
Uruguay
Consumption Growth Based Estimate
("Business as Usual")* Coverage Gap Based Estimate (According to Below Targets for Overall/Rural Access)*
2005- Total Number of Network Connections 2005-
Investment Need Power Sector 2010 Estimate $m 432 Needed 2010 Estimate 1000s 852
2005- Total Number of Network Connections 2005-
Investment Need Power Sector 2015 Estimate $m 963 Needed 2015 Estimate 1000s 894
2005- 2005-
Investment Need Power Generation 2010 Estimate $m 259 Total Investment Need Network Extension 2010 Estimate $m 256
2005- 2005-
Investment Need Power Generation 2015 Estimate $m 578 Total Investment Need Network Extension 2015 Estimate $m 268
2005- Number of Rural Network Connections 2005-
Investment Need Power Transport 2010 Estimate $m 43 Needed 2010 Estimate 1000s 23
2005- Number of Rural Network Connections 2005-
Investment Need Power Transport 2015 Estimate $m 96 Needed 2015 Estimate 1000s 28
2005- 2005-
Investment Need Power Distribution 2010 Estimate $m 130 Investment Need Rural Network Extension 2010 Estimate $m 16
2005- 2005-
Investment Need Power Distribution 2015 Estimate $m 289 Investment Need Rural Network Extension 2015 Estimate $m 20
(*) As upfront payment (no discounted (*) As upfront payment (no discounted cash
cash flow considerations). flow considerations).
Assumptions Assumptions
Cost per Connection (overall) 2003 Estimate $ 300
Cost per Rural Connection 2003 Estimate $ 700
1972-
Base for Growth Rate Estimate 2001 Median years 29 Average Size of Household (overall) 2003 Estimate persons 4.0
Per-kWh-Cost of New Capacity 2003 Estimate $ 1,900 Average Size of Household (rural) 2003 Estimate persons 5.0
Capacity Utilization 2003 Estimate h.p.a. 7,500 Overall Electrification 2010 Target/Estimate % 98%
Generation Investment Share 2003 Estimate % 60% Overall Electrification 2015 Target/Estimate % 100%
Transmission Investment Share 2003 Estimate % 10% Rural Electrification 2010 Target/Estimate % 50%
Distribution Investment Share 2003 Estimate % 30% Rural Electrification 2015 Target/Estimate % 70%
Annex 2: Work Sheets for Calculation of Estimates for Projected Investments 87
Venezuela, RB
Consumption Growth Based
Estimate ("Business as Usual")* Coverage Gap Based Estimate (According to Below Targets for Overall/Rural Access)*
2005- Total Number of Network Connections 2005-
Investment Need Power Sector 2010 Estimate $m 7,948 Needed 2010 Estimate 1000s 6,848
2005- Total Number of Network Connections 2005-
Investment Need Power Sector 2015 Estimate $m 18,903 Needed 2015 Estimate 1000s 7,644
2005- 2005-
Investment Need Power Generation 2010 Estimate $m 4,769 Total Investment Need Network Extension 2010 Estimate $m 2,054
2005- 2005-
Investment Need Power Generation 2015 Estimate $m 11,342 Total Investment Need Network Extension 2015 Estimate $m 2,293
2005- Number of Rural Network Connections 2005-
Investment Need Power Transport 2010 Estimate $m 795 Needed 2010 Estimate 1000s 314
2005- Number of Rural Network Connections 2005-
Investment Need Power Transport 2015 Estimate $m 1,890 Needed 2015 Estimate 1000s 437
2005- 2005-
Investment Need Power Distribution 2010 Estimate $m 2,385 Investment Need Rural Network Extension 2010 Estimate $m 220
2005- 2005-
Investment Need Power Distribution 2015 Estimate $m 5,671 Investment Need Rural Network Extension 2015 Estimate $m 306
(*) As upfront payment (no
discounted cash flow (*) As upfront payment (no discounted cash
considerations). flow considerations).
Assumptions Assumptions
Cost per Connection (overall) 2003 Estimate $ 300
Cost per Rural Connection 2003 Estimate $ 700
1972-
Base for Growth Rate Estimate 2001 Median years 29 Average Size of Household (overall) 2003 Estimate persons 4.0
Per-kWh-Cost of New Capacity 2003 Estimate $ 1,900 Average Size of Household (rural) 2003 Estimate persons 5.0
Capacity Utilization 2003 Estimate h.p.a. 7,500 Overall Electrification 2010 Target/Estimate % 98%
Generation Investment Share 2003 Estimate % 60% Overall Electrification 2015 Target/Estimate % 100%
Transmission Investment Share 2003 Estimate % 10% Rural Electrification 2010 Target/Estimate % 50%
Distribution Investment Share 2003 Estimate % 30% Rural Electrification 2015 Target/Estimate % 70%
88 Study on Investment and Private Sector Participation in Power Distribution in the Latin American and Caribbean Region
Argentina
Annual Electricity Consumption 2001 Latest GWh 76,195 Annual Electricity Consumption 2010 Estimate GWh 115,021
Electricity Consumption Growth 1972-2001 Mean % 4.68% Annual Electricity Consumption 2015 Estimate GWh 144,590
Electricity Consumption Growth 1972-2002 Median % 4.82%
Electricity Consumption Growth 1972-2003 StandDev % 4.32% Annual Private Investment, Energy 2002 Latest $m 300
Trend last
Electricity Consumption Growth 1997-2001 5 years % 5.38% Annual Private Investment, Energy 1992-2002 Mean $m 2,319
Annual Private Investment, Energy 1992-2002 Median $m 2,135
Annual Electricity Production 2001 Latest GWh 90,181 Annual Private Investment, Energy 1992-2002 StandDev $m 1,296
Annual Private Investment Growth, Trend last 5 -
Electricity Production Growth 1972-2002 Mean % 4.63% Energy 1998-2002 years % 87.13%
Electricity Production Growth 1972-2002 Median % 4.70%
Electricity Production Growth 1972-2002 StandDev % 3.61% Annual Private Investment, Power 2000 Latest $m 180
Trend last
Electricity Production Growth 1997-2001 5 years % 5.33% Annual Private Investment, Power 1992-2000 Mean $m 1,621
Annual Private Investment, Power 1992-2000 Median $m 1,036
Transmission & Distribution Losses 2001 Latest % 13.59% Annual Private Investment, Power 1992-2000 StandDev $m 1,695
Annual Private Investment Growth, Trend last 5 -
Transmission & Distribution Losses 1971-2001 Mean % 14.29% Power 1996-2000 years % 70.50%
Transmission & Distribution Losses 1971-2001 Median % 13.96%
Transmission & Distribution Losses 1971-2001 StandDev % 3.17% Total Population 2003 Latest 1000s 38,377
Trend last
Transmission & Distribution Losses 1997-2001 5 years % -5.43% Annual Population Growth 2003 Latest % 0.87%
Share of Rural Population 2003 Latest % 9.87%
GDP Growth 2001 Latest % 8.72% Annual Rural Population Growth 2003 Latest % 3.01%
people per
GDP Growth 1971-2003 Mean % 1.60% Population density, rural 2003 Latest km2 11
GDP Growth 1971-2003 Median % 2.51%
GDP Growth 1971-2003 StandDev % 6.08% Access to Electricity 2000 Latest % 94.60%
Trend last
GDP Growth 1999-2003 5 years % -2.15% Rural population w/ access to electricity 2000 Latest % 15.00%
Annex 2: Work Sheets for Calculation of Estimates for Projected Investments 89
Bolivia
Annual Electricity Consumption 2001 Latest GWh 3,469 Annual Electricity Consumption 2010 Estimate GWh 5,448
Electricity Consumption Growth 1972-2001 Mean % 5.14% Annual Electricity Consumption 2015 Estimate GWh 7,001
Electricity Consumption Growth 1972-2002 Median % 6.34%
Electricity Consumption Growth 1972-2003 StandDev % 6.55% Annual Private Investment, Energy 2001 Latest $m 29
Trend last
Electricity Consumption Growth 1997-2001 5 years % 6.89% Annual Private Investment, Energy 1992-2002 Mean $m 544
Annual Private Investment, Energy 1992-2002 Median $m 127
Annual Electricity Production 2001 Latest GWh 3,973 Annual Private Investment, Energy 1992-2002 StandDev $m 973
Trend last -
Electricity Production Growth 1972-2002 Mean % 4.73% Annual Private Investment Growth, Energy 1998-2002 5 years % 389.91%
Electricity Production Growth 1972-2002 Median % 6.26%
Electricity Production Growth 1972-2002 StandDev % 4.57% Annual Private Investment, Power 2000 Latest $m 131
Trend last
Electricity Production Growth 1997-2001 5 years % 4.33% Annual Private Investment, Power 1995-2000 Mean $m 101
Annual Private Investment, Power 1995-2000 Median $m 50
Transmission & Distribution Losses 2001 Latest % 12.18% Annual Private Investment, Power 1995-2000 StandDev $m 111
Trend last
Transmission & Distribution Losses 1971-2001 Mean % 14.19% Annual Private Investment Growth, Power 1996-2000 5 years % 227.12%
Transmission & Distribution Losses 1971-2001 Median % 12.49%
Transmission & Distribution Losses 1971-2001 StandDev % 4.96% Total Population 2003 Latest 1000s 8,980
Trend last
Transmission & Distribution Losses 1997-2001 5 years % 17.18% Annual Population Growth 2003 Latest % 1.92%
Share of Rural Population 2003 Latest % 36.62%
GDP Growth 2001 Latest % 2.45% Annual Rural Population Growth 2003 Latest % 0.60%
people
per
GDP Growth 1971-2003 Mean % 2.59% Population density, rural 2003 Latest km2 112
GDP Growth 1971-2003 Median % 2.91%
GDP Growth 1971-2003 StandDev % 3.01% Access to Electricity 2000 Latest % 60.40%
Trend last
GDP Growth 1999-2003 5 years % 1.88% Rural population w/ access to electricity 2000 Latest % 22.30%
90 Study on Investment and Private Sector Participation in Power Distribution in the Latin American and Caribbean Region
Brazil
Annual Electricity Consumption 2001 Latest GWh 298,010 Annual Electricity Consumption 2010 Estimate GWh 539,316
Electricity Consumption Growth 1972-2001 Mean % 6.81% Annual Electricity Consumption 2015 Estimate GWh 749,827
Electricity Consumption Growth 1972-2002 Median % 5.93%
Electricity Consumption Growth 1972-2003 StandDev % 4.58% Annual Private Investment, Energy 2001 Latest $m 2,612
Electricity Consumption Growth 1997-2001 Trend last 5 years % 2.20% Annual Private Investment, Energy 1994-2002 Mean $m 5,472
Annual Private Investment, Energy 1994-2002 Median $m 4,609
Annual Electricity Production 2001 Latest GWh 327,874 Annual Private Investment, Energy 1994-2002 StandDev $m 4,643
Trend last -
Electricity Production Growth 1972-2002 Mean % 6.45% Annual Private Investment Growth, Energy 1998-2002 5 years % 50.93%
Electricity Production Growth 1972-2002 Median % 5.73%
Electricity Production Growth 1972-2002 StandDev % 4.50% Annual Private Investment, Power 2000 Latest $m 1,467
Electricity Production Growth 1997-2001 Trend last 5 years % 2.49% Annual Private Investment, Power 1995-2000 Mean $m 4,361
Annual Private Investment, Power 1995-2000 Median $m 3,075
Transmission & Distribution
Losses 2001 Latest % 17.24% Annual Private Investment, Power 1995-2000 StandDev $m 4,929
Transmission & Distribution Trend last -
Losses 1971-2001 Mean % 13.82% Annual Private Investment Growth, Power 1996-2000 5 years % 31.01%
Transmission & Distribution
Losses 1971-2001 Median % 13.04%
Transmission & Distribution
Losses 1971-2001 StandDev % 2.33% Total Population 2003 Latest 1000s 176,596
Transmission & Distribution
Losses 1997-2001 Trend last 5 years % 17.46% Annual Population Growth 2003 Latest % 1.20%
Share of Rural Population 2003 Latest % 16.99%
GDP Growth 2003 Latest % -0.20% Annual Rural Population Growth 2003 Latest % -2.35%
people
GDP Growth 1971-2003 Mean % 3.98% Population density, rural 2003 Latest per km2 53
GDP Growth 1971-2003 Median % 3.60%
GDP Growth 1971-2003 StandDev % 4.54% Access to Electricity 2000 Latest % 94.90%
GDP Growth 1999-2003 Trend last 5 years % 1.58% Rural population w/ access to electricity 2000 Latest % 72.00%
Annex 2: Work Sheets for Calculation of Estimates for Projected Investments 91
Chile
Annual Electricity Consumption 2001 Latest GWh 39,379 Annual Electricity Consumption 2010 Estimate GWh 66,397
Electricity Consumption Growth 1972-2001 Mean % 5.98% Annual Electricity Consumption 2015 Estimate GWh 88,756
Electricity Consumption Growth 1972-2001 Median % 5.84%
Electricity Consumption Growth 1972-2001 StandDev % 4.36% Annual Private Investment, Energy 2001 Latest $m 187,000
Trend last
Electricity Consumption Growth 1997-2001 5 years % 8.14% Annual Private Investment, Energy 1992-2001 Mean $m 792
Annual Private Investment, Energy 1992-2001 Median $m 646
Annual Electricity Production 2001 Latest GWh 43,918 Annual Private Investment, Energy 1992-2001 StandDev $m 636
Annual Private Investment Growth, Trend last
Electricity Production Growth 1972-2002 Mean % 5.68% Energy 1998-2002 5 years % -83.59%
Electricity Production Growth 1972-2002 Median % 6.15%
Electricity Production Growth 1972-2002 StandDev % 3.66% Annual Private Investment, Power 2000 Latest $m 560
Trend last
Electricity Production Growth 1997-2001 5 years % 7.36% Annual Private Investment, Power 1990-2000 Mean $m 619
Annual Private Investment, Power 1990-2000 Median $m 661
Transmission & Distribution Losses 2001 Latest % 7.13% Annual Private Investment, Power 1990-2000 StandDev $m 394
Annual Private Investment Growth, Trend last
Transmission & Distribution Losses 1971-2001 Mean % 10.99% Power 1996-2000 5 years % -281.20%
Transmission & Distribution Losses 1971-2001 Median % 11.17%
Transmission & Distribution Losses 1971-2001 StandDev % 2.24% Total Population 2003 Latest 1000s 15,774
Trend last
Transmission & Distribution Losses 1997-2001 5 years % 7.09% Annual Population Growth 2003 Latest % 1.18%
Share of Rural Population 2003 Latest % 13.02%
GDP Growth 2003 Latest % 3.30% Annual Rural Population Growth 2003 Latest % -1.39%
people per
GDP Growth 1971-2003 Mean % 4.37% Population density, rural 2003 Latest km2 107
GDP Growth 1971-2003 Median % 5.71%
GDP Growth 1971-2003 StandDev % 5.55% Access to Electricity 2000 Latest % 99.00%
Trend last Rural population w/ access to
GDP Growth 1999-2003 5 years % 2.31% electricity 2000 Latest % 76.00%
92 Study on Investment and Private Sector Participation in Power Distribution in the Latin American and Caribbean Region
Colombia
Annual Electricity Consumption 2001 Latest GWh 35,190 Annual Electricity Consumption 2010 Estimate GWh 55,140
Electricity Consumption Growth 1972-2001 Mean % 5.12% Annual Electricity Consumption 2015 Estimate GWh 70,767
Electricity Consumption Growth 1972-2002 Median % 4.39%
Electricity Consumption Growth 1972-2003 StandDev % 4.82% Annual Private Investment, Energy 2000 Latest $m 71
Trend last 5
Electricity Consumption Growth 1997-2001 years % -0.46% Annual Private Investment, Energy 1993-2000 Mean $m 947
Annual Private Investment, Energy 1993-2000 Median $m 422
Annual Electricity Production 2001 Latest GWh 43,463 Annual Private Investment, Energy 1993-2000 StandDev $m 1,108
Annual Private Investment Growth, Trend last 5
Electricity Production Growth 1972-2002 Mean % 5.37% Energy 1996-2000 years % -165.81%
Electricity Production Growth 1972-2002 Median % 5.16%
Electricity Production Growth 1972-2002 StandDev % 6.06% Annual Private Investment, Power 1999 Latest $m 175
Trend last 5
Electricity Production Growth 1997-2001 years % -0.49% Annual Private Investment, Power 1993-1999 Mean $m 1,085
Annual Private Investment, Power 1993-1999 Median $m 757
Transmission & Distribution Losses 2001 Latest % 22.26% Annual Private Investment, Power 1993-1999 StandDev $m 1,098
Trend last 5
Transmission & Distribution Losses 1971-2001 Mean % 18.50% Annual Private Investment Growth, Power 1995-2000 years % 36.07%
Transmission & Distribution Losses 1971-2001 Median % 16.19%
Transmission & Distribution Losses 1971-2001 StandDev % 3.73% Total Population 2003 Latest 1000s 44,402
Trend last 5
Transmission & Distribution Losses 1997-2001 years % 23.04% Annual Population Growth 2003 Latest % 1.52%
Share of Rural Population 2003 Latest % 23.60%
GDP Growth 2003 Latest % 3.74% Annual Rural Population Growth 2003 Latest % -0.54%
people
per
GDP Growth 1971-2003 Mean % 3.74% Population density, rural 2003 Latest km2 421
GDP Growth 1971-2003 Median % 3.74%
GDP Growth 1971-2003 StandDev % 2.43% Access to Electricity 2000 Latest % 81.00%
Trend last 5
GDP Growth 1999-2003 years % 1.09% Rural population w/ access to electricity 2000 Latest % 51.00%
Annex 2: Work Sheets for Calculation of Estimates for Projected Investments 93
Costa Rica
Annual Electricity Consumption 2001 Latest GWh 35,190 Annual Electricity Consumption 2010 Estimate GWh 62,058
Electricity Consumption Growth 1972-2001 Mean % 6.51% Annual Electricity Consumption 2015 Estimate GWh 85,049
Electricity Consumption Growth 1972-2002 Median % 5.63%
Electricity Consumption Growth 1972-2003 StandDev % 6.83% Annual Private Investment, Energy 2000 Latest $m 0
Trend last
Electricity Consumption Growth 1997-2001 5 years % 6.51% Annual Private Investment, Energy 1994-2000 Mean $m 45
Annual Private Investment, Energy 1994-2000 Median $m 58
Annual Electricity Production 2001 Latest GWh 6,941 Annual Private Investment, Energy 1994-2000 StandDev $m 39
Trend last
Electricity Production Growth 1972-2002 Mean % 6.33% Annual Private Investment Growth, Energy 1996-2000 5 years % n/a
Electricity Production Growth 1972-2002 Median % 6.56%
Electricity Production Growth 1972-2002 StandDev % 5.58% Annual Private Investment, Power 2000 Latest $m 0
Trend last
Electricity Production Growth 1997-2001 5 years % 7.92% Annual Private Investment, Power 1992-2000 Mean $m 40
Annual Private Investment, Power 1992-2000 Median $m 37
Transmission & Distribution Losses 2001 Latest % 7.20% Annual Private Investment, Power 1992-2000 StandDev $m 38
Trend last -
Transmission & Distribution Losses 1989-2001 Mean % 7.69% Annual Private Investment Growth, Power 1995-2000 5 years % 35.06%
Transmission & Distribution Losses 1989-2001 Median % 7.67%
Transmission & Distribution Losses 1989-2001 StandDev % 0.40% Total Population 2003 Latest 1000s 4,005
Trend last
Transmission & Distribution Losses 1997-2001 5 years % 7.41% Annual Population Growth 2003 Latest % 1.59%
Share of Rural Population 2003 Latest % 39.38%
GDP Growth 2003 Latest % 5.60% Annual Rural Population Growth 2003 Latest % 0.22%
people
GDP Growth 1971-2003 Mean % 4.36% Population density, rural 2003 Latest per km2 696
GDP Growth 1971-2003 Median % 4.94%
GDP Growth 1971-2003 StandDev % 3.50% Access to Electricity 2000 Latest % 95.70%
Trend last
GDP Growth 1999-2003 5 years % 3.95% Rural population w/ access to electricity 2000 Latest % 84.80%
94 Study on Investment and Private Sector Participation in Power Distribution in the Latin American and Caribbean Region
Dominican Republic
Annual Electricity Consumption 2001 Latest GWh 6,976 Annual Electricity Consumption 2010 Estimate GWh 13,475
Electricity Consumption Growth 1972-2001 Mean % 7.59% Annual Electricity Consumption 2015 Estimate GWh 19,426
Electricity Consumption Growth 1972-2002 Median % 6.28%
Electricity Consumption Growth 1972-2003 StandDev % 16.15% Annual Private Investment, Energy 2002 Latest $m 400
Trend last
Electricity Consumption Growth 1997-2001 5 years % 7.70% Annual Private Investment, Energy 1994-2000 Mean $m 330
Annual Private Investment, Energy 1994-2000 Median $m 285
Annual Electricity Production 2001 Latest GWh 10,307 Annual Private Investment, Energy 1994-2000 StandDev $m 240
Trend last
Electricity Production Growth 1972-2002 Mean % 8.86% Annual Private Investment Growth, Energy 1996-2000 5 years % n/a
Electricity Production Growth 1972-2002 Median % 7.04%
Electricity Production Growth 1972-2002 StandDev % 15.60% Annual Private Investment, Power 2000 Latest $m 400
Trend last
Electricity Production Growth 1997-2001 5 years % 9.36% Annual Private Investment, Power 1992-2000 Mean $m 385
Annual Private Investment, Power 1992-2000 Median $m 322
Transmission & Distribution Losses 2001 Latest % 25.95% Annual Private Investment, Power 1992-2000 StandDev $m 391
Trend last
Transmission & Distribution Losses 1973-2001 Mean % 24.41% Annual Private Investment Growth, Power 1995-2000 5 years % n/a
Transmission & Distribution Losses 1989-2001 Median % 26.07%
Transmission & Distribution Losses 1989-2001 StandDev % 5.31% Total Population 2003 Latest 1000s 8,739
Trend last
Transmission & Distribution Losses 1997-2001 5 years % 27.10% Annual Population Growth 2003 Latest % 1.45%
Share of Rural Population 2003 Latest % 40.65%
GDP Growth 2003 Latest % -1.25% Annual Rural Population Growth 2003 Latest % 0.52%
people
per
GDP Growth 1971-2003 Mean % 4.87% Population density, rural 2003 Latest km2 321
GDP Growth 1971-2003 Median % 4.81%
GDP Growth 1971-2003 StandDev % 3.75% Access to Electricity 2000 Latest % 66.80%
Trend last
GDP Growth 1999-2003 5 years % 4.16% Rural population w/ access to electricity 2000 Latest % 61.00%
Annex 2: Work Sheets for Calculation of Estimates for Projected Investments 95
Ecuador
Annual Electricity Consumption 2001 Latest GWh 7,965 Annual Electricity Consumption 2010 Estimate GWh 15,918
Electricity Consumption Growth 1972-2001 Mean % 8.00% Annual Electricity Consumption 2015 Estimate GWh 23,387
Electricity Consumption Growth 1972-2002 Median % 8.08%
Electricity Consumption Growth 1972-2003 StandDev % 6.49% Annual Private Investment, Energy 2000 Latest $m 280
Trend last
Electricity Consumption Growth 1997-2001 5 years % 2.58% Annual Private Investment, Energy 1994-2000 Mean $m n/a
Annual Private Investment, Energy 1994-2000 Median $m n/a
Annual Electricity Production 2001 Latest GWh 11,050 Annual Private Investment, Energy 1994-2000 StandDev $m n/a
Trend last
Electricity Production Growth 1972-2002 Mean % 8.30% Annual Private Investment Growth, Energy 1996-2000 5 years % n/a
Electricity Production Growth 1972-2002 Median % 9.58%
Electricity Production Growth 1972-2002 StandDev % 5.64% Annual Private Investment, Power 2000 Latest $m 280
Trend last
Electricity Production Growth 1997-2001 5 years % 3.55% Annual Private Investment, Power 1992-2000 Mean $m n/a
Annual Private Investment, Power 1992-2000 Median $m n/a
Transmission & Distribution Losses 2001 Latest % 24.60% Annual Private Investment, Power 1992-2000 StandDev $m n/a
Trend last
Transmission & Distribution Losses 1973-2001 Mean % 19.57% Annual Private Investment Growth, Power 1995-2000 5 years % n/a
Transmission & Distribution Losses 1989-2001 Median % 20.08%
Transmission & Distribution Losses 1989-2001 StandDev % 4.11% Total Population 2003 Latest 1000s 13,029
Trend last
Transmission & Distribution Losses 1997-2001 5 years % 23.89% Annual Population Growth 2003 Latest % 1.63%
Share of Rural Population 2003 Latest % 38.21%
GDP Growth 2003 Latest % 2.57% Annual Rural Population Growth 2003 Latest % 0.33%
people
GDP Growth 1971-2003 Mean % 3.66% Population density, rural 2003 Latest per km2 305
GDP Growth 1971-2003 Median % 3.41%
GDP Growth 1971-2003 StandDev % 3.92% Access to Electricity 2000 Latest % 80.00%
Trend last
GDP Growth 1999-2003 5 years % 1.52% Rural population w/ access to electricity 2000 Latest % 53.60%
96 Study on Investment and Private Sector Participation in Power Distribution in the Latin American and Caribbean Region
El Salvador
Annual Electricity Consumption 2001 Latest GWh 3,754 Annual Electricity Consumption 2010 Estimate GWh 6,496
Electricity Consumption Growth 1972-2001 Mean % 6.28% Annual Electricity Consumption 2015 Estimate GWh 8,810
Electricity Consumption Growth 1972-2002 Median % 6.05%
Electricity Consumption Growth 1972-2003 StandDev % 4.94% Annual Private Investment, Energy 2002 Latest $m 10
Trend last 5
Electricity Consumption Growth 1997-2001 years % 5.14% Annual Private Investment, Energy 1994-2000 Mean $m n/a
Annual Private Investment, Energy 1994-2000 Median $m n/a
Annual Electricity Production 2001 Latest GWh 3,909 Annual Private Investment, Energy 1994-2000 StandDev $m n/a
Trend last 5
Electricity Production Growth 1972-2002 Mean % 5.83% Annual Private Investment Growth, Energy 1996-2000 years % n/a
Electricity Production Growth 1972-2002 Median % 5.97%
Electricity Production Growth 1972-2002 StandDev % 5.44% Annual Private Investment, Power 2000 Latest $m 275
Trend last 5
Electricity Production Growth 1997-2001 years % 2.76% Annual Private Investment, Power 1992-2000 Mean $m n/a
Annual Private Investment, Power 1992-2000 Median $m n/a
Transmission & Distribution Losses 2001 Latest % 13.05% Annual Private Investment, Power 1992-2000 StandDev $m n/a
Trend last 5
Transmission & Distribution Losses 1973-2001 Mean % 13.63% Annual Private Investment Growth, Power 1995-2000 years % n/a
Transmission & Distribution Losses 1989-2001 Median % 13.34%
Transmission & Distribution Losses 1989-2001 StandDev % 1.43% Total Population 2003 Latest 1000s 6,533
Trend last 5
Transmission & Distribution Losses 1997-2001 years % 13.13% Annual Population Growth 2003 Latest % 1.79%
Share of Rural Population 2003 Latest % 40.56%
GDP Growth 2003 Latest % 1.98% Annual Rural Population Growth 2003 Latest % 0.94%
people per
GDP Growth 1971-2003 Mean % 2.22% Population density, rural 2003 Latest km2 394
GDP Growth 1971-2003 Median % 2.92%
GDP Growth 1971-2003 StandDev % 4.53% Access to Electricity 2000 Latest % 70.80%
Trend last 5
GDP Growth 1999-2003 years % 2.27% Rural population w/ access to electricity 2000 Latest % 41.10%
Annex 2: Work Sheets for Calculation of Estimates for Projected Investments 97
Guatemala
Annual Electricity Consumption 2001 Latest GWh 4,178 Annual Electricity Consumption 2010 Estimate GWh 7,351
Electricity Consumption Growth 1972-2001 Mean % 6.48% Annual Electricity Consumption 2015 Estimate GWh 10,062
Electricity Consumption Growth 1972-2002 Median % 6.91%
Electricity Consumption Growth 1972-2003 StandDev % 6.64% Annual Private Investment, Energy 2002 Latest $m 60
Trend last
Electricity Consumption Growth 1997-2001 5 years % 6.55% Annual Private Investment, Energy 1994-2002 Mean $m 179
Annual Private Investment, Energy 1994-2002 Median $m 119
Annual Electricity Production 2001 Latest GWh 5,856 Annual Private Investment, Energy 1994-2002 StandDev $m 176
Trend last
Electricity Production Growth 1972-2002 Mean % 7.62% Annual Private Investment Growth, Energy 1998-2002 5 years % -82.47%
Electricity Production Growth 1972-2002 Median % 8.25%
Electricity Production Growth 1972-2002 StandDev % 6.93% Annual Private Investment, Power 2002 Latest $m 60
Trend last
Electricity Production Growth 1997-2001 5 years % 6.55% Annual Private Investment, Power 1994-2002 Mean $m 179
Annual Private Investment, Power 1994-2002 Median $m 119
Transmission & Distribution Losses 2001 Latest % 23.00% Annual Private Investment, Power 1994-2002 StandDev $m 170
Trend last
Transmission & Distribution Losses 1971-2001 Mean % 12.30% Annual Private Investment Growth, Power 1995-2002 5 years % 118.73%
Transmission & Distribution Losses 1971-2001 Median % 12.57%
Transmission & Distribution Losses 1971-2001 StandDev % 5.62% Total Population 2003 Latest 1000s 12,307
Trend last
Transmission & Distribution Losses 1997-2001 5 years % 20.41% Annual Population Growth 2003 Latest % 2.59%
Share of Rural Population 2003 Latest % 53.65%
GDP Growth 2001 Latest % 2.12% Annual Rural Population Growth 2003 Latest % 1.85%
people
per
GDP Growth 1971-2003 Mean % 3.44% Population density, rural 2003 Latest km2 468
GDP Growth 1971-2003 Median % 3.85%
GDP Growth 1971-2003 StandDev % 2.64% Access to Electricity 2000 Latest % 66.70%
Trend last
GDP Growth 1999-2003 5 years % 2.83% Rural population w/ access to electricity 2000 Latest % 48.70%
98 Study on Investment and Private Sector Participation in Power Distribution in the Latin American and Caribbean Region
Haiti
Annual Electricity Consumption 2001 Latest GWh 291 Annual Electricity Consumption 2010 Estimate GWh 572
Electricity Consumption Growth 1972-2001 Mean % 7.79% Annual Electricity Consumption 2015 Estimate GWh 832
Electricity Consumption Growth 1972-2002 Median % 4.94%
Electricity Consumption Growth 1972-2003 StandDev % 22.40% Annual Private Investment, Energy 1995 Latest $m 5
Trend last
Electricity Consumption Growth 1997-2001 5 years % 5.77% Annual Private Investment, Energy 1994-2002 Mean $m n/a
Annual Private Investment, Energy 1994-2002 Median $m n/a
Annual Electricity Production 2001 Latest GWh 547 Annual Private Investment, Energy 1994-2002 StandDev $m n/a
Trend last 5
Electricity Production Growth 1972-2002 Mean % 7.98% Annual Private Investment Growth, Energy 1998-2002 years % n/a
Electricity Production Growth 1972-2002 Median % 5.47%
Electricity Production Growth 1972-2002 StandDev % 18.78% Annual Private Investment, Power 2002 Latest $m 5
Trend last
Electricity Production Growth 1997-2001 5 years % -1.35% Annual Private Investment, Power 1994-2002 Mean $m n/a
Annual Private Investment, Power 1994-2002 Median $m n/a
Transmission & Distribution Losses 2001 Latest % 53.20% Annual Private Investment, Power 1994-2002 StandDev $m n/a
Trend last 5
Transmission & Distribution Losses 1971-2001 Mean % 33.32% Annual Private Investment Growth, Power 1995-2002 years % n/a
Transmission & Distribution Losses 1971-2001 Median % 29.15%
Transmission & Distribution Losses 1971-2001 StandDev % 11.54% Total Population 2003 Latest 1000s 8,440
Trend last
Transmission & Distribution Losses 1997-2001 5 years % 49.94% Annual Population Growth 2003 Latest % 1.84%
Share of Rural Population 2003 Latest % 62.50%
GDP Growth 2001 Latest % 0.00% Annual Rural Population Growth 2003 Latest % 0.84%
people
per
GDP Growth 1971-2003 Mean % 0.81% Population density, rural 2003 Latest km2 665
GDP Growth 1971-2003 Median % 0.76%
GDP Growth 1971-2003 StandDev % 4.50% Access to Electricity 2000 Latest % 34.00%
Trend last
GDP Growth 1999-2003 5 years % 0.33% Rural population w/ access to electricity 2000 Latest % #VALUE!
Annex 2: Work Sheets for Calculation of Estimates for Projected Investments 99
Honduras
Annual Electricity Consumption 2001 Latest GWh 3,368 Annual Electricity Consumption 2010 Estimate GWh 6,761
Electricity Consumption Growth 1972-2001 Mean % 8.05% Annual Electricity Consumption 2015 Estimate GWh 9,957
Electricity Consumption Growth 1972-2002 Median % 6.78%
Electricity Consumption Growth 1972-2003 StandDev % 7.50% Annual Private Investment, Energy 1998 Latest $m 87
Trend last 5
Electricity Consumption Growth 1997-2001 years % 7.57% Annual Private Investment, Energy 1994-2002 Mean $m n/a
Annual Private Investment, Energy 1994-2002 Median $m n/a
Annual Electricity Production 2001 Latest GWh 3,992 Annual Private Investment, Energy 1994-2002 StandDev $m n/a
Trend last 5
Electricity Production Growth 1972-2002 Mean % 8.21% Annual Private Investment Growth, Energy 1998-2002 years % n/a
Electricity Production Growth 1972-2002 Median % 8.62%
Electricity Production Growth 1972-2002 StandDev % 5.96% Annual Private Investment, Power 1995 Latest $m 112
Trend last 5
Electricity Production Growth 1997-2001 years % 5.48% Annual Private Investment, Power 1994-2002 Mean $m n/a
Annual Private Investment, Power 1994-2002 Median $m n/a
Transmission & Distribution Losses 2001 Latest % 21.22% Annual Private Investment, Power 1994-2002 StandDev $m n/a
Trend last 5
Transmission & Distribution Losses 1971-2001 Mean % 17.97% Annual Private Investment Growth, Power 1995-2002 years % n/a
Transmission & Distribution Losses 1971-2001 Median % 16.99%
Transmission & Distribution Losses 1971-2001 StandDev % 5.03% Total Population 2003 Latest 1000s 6,969
Trend last 5
Transmission & Distribution Losses 1997-2001 years % 21.87% Annual Population Growth 2003 Latest % 2.50%
Share of Rural Population 2003 Latest % 54.40%
GDP Growth 2001 Latest % 3.01% Annual Rural Population Growth 2003 Latest % 1.76%
people
per
GDP Growth 1971-2003 Mean % 3.65% Population density, rural 2003 Latest km2 343
GDP Growth 1971-2003 Median % 4.00%
GDP Growth 1971-2003 StandDev % 3.27% Access to Electricity 2000 Latest % 54.50%
Trend last 5
GDP Growth 1999-2003 years % 2.33% Rural population w/ access to electricity 2000 Latest % 32.95%
100 Study on Investment and Private Sector Participation in Power Distribution in the Latin American and Caribbean Region
Jamaica
Annual Electricity Consumption 2001 Latest GWh 6,081 Annual Electricity Consumption 2010 Estimate GWh 10,945
Electricity Consumption Growth 1972-2001 Mean % 6.75% Annual Electricity Consumption 2015 Estimate GWh 15,172
Electricity Consumption Growth 1972-2002 Median % 3.48%
Electricity Consumption Growth 1972-2003 StandDev % 23.33% Annual Private Investment, Energy 1995 Latest $m 201
Electricity Consumption Growth 1997-2001 Trend last 5 years % 2.53% Annual Private Investment, Energy 1994-2002 Mean $m n/a
Annual Private Investment, Energy 1994-2002 Median $m n/a
Annual Electricity Production 2001 Latest GWh 6,656 Annual Private Investment, Energy 1994-2002 StandDev $m n/a
Trend last
Electricity Production Growth 1972-2002 Mean % 6.19% Annual Private Investment Growth, Energy 1998-2002 5 years % n/a
Electricity Production Growth 1972-2002 Median % 2.61%
Electricity Production Growth 1972-2002 StandDev % 19.87% Annual Private Investment, Power 1995 Latest $m 201
Electricity Production Growth 1997-2001 Trend last 5 years % 1.98% Annual Private Investment, Power 1994-2002 Mean $m n/a
Annual Private Investment, Power 1994-2002 Median $m n/a
Transmission & Distribution
Losses 2001 Latest % 8.47% Annual Private Investment, Power 1994-2002 StandDev $m n/a
Transmission & Distribution Trend last
Losses 1971-2001 Mean % 12.83% Annual Private Investment Growth, Power 1995-2002 5 years % n/a
Transmission & Distribution
Losses 1971-2001 Median % 11.21%
Transmission & Distribution
Losses 1971-2001 StandDev % 3.89% Total Population 2003 Latest 1000s 2,640
Transmission & Distribution
Losses 1997-2001 Trend last 5 years % 9.68% Annual Population Growth 2003 Latest % 0.88%
Share of Rural Population 2003 Latest % 47.85%
GDP Growth 2001 Latest % 2.10% Annual Rural Population Growth 2003 Latest % 0.82%
people
GDP Growth 1971-2003 Mean % 0.97% Population density, rural 2003 Latest per km2 715
GDP Growth 1971-2003 Median % 1.00%
GDP Growth 1971-2003 StandDev % 4.32% Access to Electricity 2000 Latest % 90.00%
GDP Growth 1999-2003 Trend last 5 years % 1.29% Rural population w/ access to electricity 2000 Latest % #VALUE!
Annex 2: Work Sheets for Calculation of Estimates for Projected Investments 101
Mexico
Annual Electricity Consumption 2001 Latest GWh 163,320 Annual Electricity Consumption 2010 Estimate GWh 284,646
Electricity Consumption Growth 1972-2001 Mean % 6.37% Annual Electricity Consumption 2015 Estimate GWh 387,561
Electricity Consumption Growth 1972-2002 Median % 6.94%
Electricity Consumption Growth 1972-2003 StandDev % 2.94% Annual Private Investment, Energy 2002 Latest $m 1,184
Trend last
Electricity Consumption Growth 1997-2001 5 years % 5.00% Annual Private Investment, Energy 1994-2002 Mean $m 720
Annual Private Investment, Energy 1994-2002 Median $m 496
Annual Electricity Production 2001 Latest GWh 209,618 Annual Private Investment, Energy 1994-2002 StandDev $m 692
Trend last -
Electricity Production Growth 1972-2002 Mean % 6.60% Annual Private Investment Growth, Energy 1998-2002 5 years % 80.58%
Electricity Production Growth 1972-2002 Median % 7.02%
Electricity Production Growth 1972-2002 StandDev % 2.46% Annual Private Investment, Power 2002 Latest $m 1,184
Trend last
Electricity Production Growth 1997-2001 5 years % 5.24% Annual Private Investment, Power 1998-2002 Mean $m 779
Annual Private Investment, Power 1994-2002 Median $m 260
Transmission & Distribution Losses 2001 Latest % 14.45% Annual Private Investment, Power 1994-2002 StandDev $m 821
Trend last
Transmission & Distribution Losses 1971-2001 Mean % 12.57% Annual Private Investment Growth, Power 1995-2002 5 years % n/a
Transmission & Distribution Losses 1971-2001 Median % 12.54%
Transmission & Distribution Losses 1971-2001 StandDev % 1.33% Total Population 2003 Latest 1000s 102,291
Trend last
Transmission & Distribution Losses 1997-2001 5 years % 14.32% Annual Population Growth 2003 Latest % 1.45%
Share of Rural Population 2003 Latest % 24.51%
GDP Growth 2001 Latest % 1.30% Annual Rural Population Growth 2003 Latest % 0.40%
people
GDP Growth 1971-2003 Mean % 3.72% Population density, rural 2003 Latest per km2 100
GDP Growth 1971-2003 Median % 4.20%
GDP Growth 1971-2003 StandDev % 3.82% Access to Electricity 2000 Latest % 95.00%
Trend last
GDP Growth 1999-2003 5 years % 2.44% Rural population w/ access to electricity 2000 Latest % 82.90%
102 Study on Investment and Private Sector Participation in Power Distribution in the Latin American and Caribbean Region
Nicaragua
Annual Electricity Consumption 2001 Latest GWh 1,394 Annual Electricity Consumption 2010 Estimate GWh 1,865
Electricity Consumption Growth 1972-2001 Mean % 3.29% Annual Electricity Consumption 2015 Estimate GWh 2,193
Electricity Consumption Growth 1972-2002 Median % 3.24%
Electricity Consumption Growth 1972-2003 StandDev % 7.42% Annual Private Investment, Energy 2000 Latest $m 115
Trend last
Electricity Consumption Growth 1997-2001 5 years % 3.71% Annual Private Investment, Energy 1994-2002 Mean $m n/a
Annual Private Investment, Energy 1994-2002 Median $m n/a
Annual Electricity Production 2001 Latest GWh 2,473 Annual Private Investment, Energy 1994-2002 StandDev $m n/a
Trend
last 5
Electricity Production Growth 1972-2002 Mean % 4.87% Annual Private Investment Growth, Energy 1998-2002 years % n/a
Electricity Production Growth 1972-2002 Median % 6.49%
Electricity Production Growth 1972-2002 StandDev % 8.58% Annual Private Investment, Power 2002 Latest $m 115
Trend last
Electricity Production Growth 1997-2001 5 years % 5.32% Annual Private Investment, Power 1998-2002 Mean $m n/a
Annual Private Investment, Power 1994-2002 Median $m n/a
Transmission & Distribution Losses 2001 Latest % 30.13% Annual Private Investment, Power 1994-2002 StandDev $m n/a
Trend
last 5
Transmission & Distribution Losses 1971-2001 Mean % 18.39% Annual Private Investment Growth, Power 1995-2002 years % n/a
Transmission & Distribution Losses 1971-2001 Median % 15.62%
Transmission & Distribution Losses 1971-2001 StandDev % 6.51% Total Population 2003 Latest 1000s 5,480
Trend last
Transmission & Distribution Losses 1997-2001 5 years % 28.01% Annual Population Growth 2003 Latest % 2.55%
Share of Rural Population 2003 Latest % 42.68%
GDP Growth 2001 Latest % 2.30% Annual Rural Population Growth 2003 Latest % 1.63%
people
GDP Growth 1971-2003 Mean % 1.37% Population density, rural 2003 Latest per km2 117
GDP Growth 1971-2003 Median % 2.30%
GDP Growth 1971-2003 StandDev % 7.15% Access to Electricity 2000 Latest % 48.00%
Trend last
GDP Growth 1999-2003 5 years % 0.05% Rural population w/ access to electricity 2000 Latest % #VALUE!
Annex 2: Work Sheets for Calculation of Estimates for Projected Investments 103
Panama
Annual Electricity Consumption 2001 Latest GWh 3,883 Annual Electricity Consumption 2010 Estimate GWh 6,355
Electricity Consumption Growth 1972-2001 Mean % 5.63% Annual Electricity Consumption 2015 Estimate GWh 8,356
Electricity Consumption Growth 1972-2002 Median % 6.19%
Electricity Consumption Growth 1972-2003 StandDev % 5.04% Annual Private Investment, Energy 2000 Latest $m 396
Trend last
Electricity Consumption Growth 1997-2001 5 years % 5.45% Annual Private Investment, Energy 1994-2002 Mean $m n/a
Annual Private Investment, Energy 1994-2002 Median $m n/a
Annual Electricity Production 2001 Latest GWh 5,124 Annual Private Investment, Energy 1994-2002 StandDev $m n/a
Trend last
Electricity Production Growth 1972-2002 Mean % 6.08% Annual Private Investment Growth, Energy 1998-2002 5 years % n/a
Electricity Production Growth 1972-2002 Median % 5.23%
Electricity Production Growth 1972-2002 StandDev % 4.85% Annual Private Investment, Power 2002 Latest $m 607
Trend last
Electricity Production Growth 1997-2001 5 years % 6.05% Annual Private Investment, Power 1998-2002 Mean $m n/a
Annual Private Investment, Power 1994-2002 Median $m n/a
Transmission & Distribution Losses 2001 Latest % 21.78% Annual Private Investment, Power 1994-2002 StandDev $m n/a
Trend last
Transmission & Distribution Losses 1971-2001 Mean % 18.61% Annual Private Investment Growth, Power 1995-2002 5 years % n/a
Transmission & Distribution Losses 1971-2001 Median % 19.59%
Transmission & Distribution Losses 1971-2001 StandDev % 4.62% Total Population 2003 Latest 1000s 2,984
Trend last
Transmission & Distribution Losses 1997-2001 5 years % 22.06% Annual Population Growth 2003 Latest % 1.49%
Share of Rural Population 2003 Latest % 42.85%
GDP Growth 2001 Latest % 3.90% Annual Rural Population Growth 2003 Latest % 0.77%
people
per
GDP Growth 1971-2003 Mean % 3.45% Population density, rural 2003 Latest km2 230
GDP Growth 1971-2003 Median % 3.57%
GDP Growth 1971-2003 StandDev % 4.52% Access to Electricity 2000 Latest % 76.10%
Trend last
GDP Growth 1999-2003 5 years % 2.50% Rural population w/ access to electricity 2000 Latest % 40.00%
104 Study on Investment and Private Sector Participation in Power Distribution in the Latin American and Caribbean Region
Paraguay
Annual Electricity Consumption 2001 Latest GWh 4,489 Annual Electricity Consumption 2010 Estimate GWh 11,716
Electricity Consumption Growth 1972-2001 Mean % 11.25% Annual Electricity Consumption 2015 Estimate GWh 19,965
Electricity Consumption Growth 1972-2002 Median % 11.14%
Electricity Consumption Growth 1972-2003 StandDev % 8.64% Annual Private Investment, Energy 2000 Latest $m n/a
Trend last 5
Electricity Consumption Growth 1997-2001 years % 0.20% Annual Private Investment, Energy 1994-2002 Mean $m n/a
Annual Private Investment, Energy 1994-2002 Median $m n/a
Annual Electricity Production 2001 Latest GWh 45,358 Annual Private Investment, Energy 1994-2002 StandDev $m n/a
Annual Private Investment Growth, Trend last
Electricity Production Growth 1972-2002 Mean % 26.60% Energy 1998-2002 5 years % n/a
Electricity Production Growth 1972-2002 Median % 11.21%
Electricity Production Growth 1972-2002 StandDev % 59.31% Annual Private Investment, Power 2002 Latest $m n/a
Trend last 5
Electricity Production Growth 1997-2001 years % -0.87% Annual Private Investment, Power 1998-2002 Mean $m n/a
Annual Private Investment, Power 1994-2002 Median $m n/a
Transmission & Distribution Losses 2001 Latest % 3.33% Annual Private Investment, Power 1994-2002 StandDev $m n/a
Annual Private Investment Growth, Trend last
Transmission & Distribution Losses 1971-2001 Mean % 6.39% Power 1995-2002 5 years % n/a
Transmission & Distribution Losses 1971-2001 Median % 4.57%
Transmission & Distribution Losses 1971-2001 StandDev % 5.56% Total Population 2003 Latest 1000s 5,643
Trend last 5
Transmission & Distribution Losses 1997-2001 years % 2.60% Annual Population Growth 2003 Latest % 2.39%
Share of Rural Population 2003 Latest % 42.78%
GDP Growth 2001 Latest % 2.10% Annual Rural Population Growth 2003 Latest % 0.93%
people
per
GDP Growth 1971-2003 Mean % 4.24% Population density, rural 2003 Latest km2 79
GDP Growth 1971-2003 Median % 3.98%
GDP Growth 1971-2003 StandDev % 4.30% Access to Electricity 2000 Latest % 74.70%
Trend last 5 Rural population w/ access to
GDP Growth 1999-2003 years % 0.53% electricity 2000 Latest % #VALUE!
Annex 2: Work Sheets for Calculation of Estimates for Projected Investments 105
Peru
Annual Electricity Consumption 2001 Latest GWh 18,245 Annual Electricity Consumption 2010 Estimate GWh 26,708
Electricity Consumption Growth 1972-2001 Mean % 4.33% Annual Electricity Consumption 2015 Estimate GWh 33,006
Electricity Consumption Growth 1972-2002 Median % 5.27%
Electricity Consumption Growth 1972-2003 StandDev % 5.85% Annual Private Investment, Energy 2002 Latest $m 278
Trend last
Electricity Consumption Growth 1997-2001 5 years % 5.37% Annual Private Investment, Energy 1994-2002 Mean $m 478
Annual Private Investment, Energy 1994-2002 Median $m 451
Annual Electricity Production 2001 Latest GWh 20,778 Annual Private Investment, Energy 1994-2002 StandDev $m 219
Annual Private Investment Growth, Trend last
Electricity Production Growth 1972-2002 Mean % 4.36% Energy 1998-2002 5 years % -18.38%
Electricity Production Growth 1972-2002 Median % 5.19%
Electricity Production Growth 1972-2002 StandDev % 4.61% Annual Private Investment, Power 2002 Latest $m 278
Trend last
Electricity Production Growth 1997-2001 5 years % 5.37% Annual Private Investment, Power 1998-2002 Mean $m 538
Annual Private Investment, Power 1994-2002 Median $m 477
Transmission & Distribution Losses 2001 Latest % 10.76% Annual Private Investment, Power 1994-2002 StandDev $m 356
Annual Private Investment Growth, Trend last
Transmission & Distribution Losses 1971-2001 Mean % 12.71% Power 1995-2002 5 years % 21.88%
Transmission & Distribution Losses 1971-2001 Median % 12.03%
Transmission & Distribution Losses 1971-2001 StandDev % 3.04% Total Population 2003 Latest 1000s 27,148
Trend last
Transmission & Distribution Losses 1997-2001 5 years % 12.65% Annual Population Growth 2003 Latest % 1.48%
Share of Rural Population 2003 Latest % 26.13%
GDP Growth 2001 Latest % 3.97% Annual Rural Population Growth 2003 Latest % 0.07%
people
per
GDP Growth 1971-2003 Mean % 2.46% Population density, rural 2003 Latest km2 191
GDP Growth 1971-2003 Median % 2.87%
GDP Growth 1971-2003 StandDev % 5.58% Access to Electricity 2000 Latest % 73.00%
Trend last Rural population w/ access to
GDP Growth 1999-2003 5 years % 2.56% electricity 2000 Latest % 30.00%
106 Study on Investment and Private Sector Participation in Power Distribution in the Latin American and Caribbean Region
Uruguay
Annual Electricity Consumption 2001 Latest GWh 6,411 Annual Electricity Consumption 2010 Estimate GWh 9,254
Electricity Consumption Growth 1972-2001 Mean % 4.16% Annual Electricity Consumption 2015 Estimate GWh 11,347
Electricity Consumption Growth 1972-2002 Median % 4.63%
Electricity Consumption Growth 1972-2003 StandDev % 3.63% Annual Private Investment, Energy 2002 Latest $m 330
Trend last
Electricity Consumption Growth 1997-2001 5 years % 4.29% Annual Private Investment, Energy 1994-2002 Mean $m n/a
Annual Private Investment, Energy 1994-2002 Median $m n/a
Annual Electricity Production 2001 Latest GWh 9,252 Annual Private Investment, Energy 1994-2002 StandDev $m n/a
Trend last
Electricity Production Growth 1972-2002 Mean % 5.87% Annual Private Investment Growth, Energy 1998-2002 5 years % n/a
Electricity Production Growth 1972-2002 Median % 5.37%
Electricity Production Growth 1972-2002 StandDev % 16.85% Annual Private Investment, Power 2002 Latest $m n/a
Trend last
Electricity Production Growth 1997-2001 5 years % 8.73% Annual Private Investment, Power 1998-2002 Mean $m n/a
Annual Private Investment, Power 1994-2002 Median $m n/a
Transmission & Distribution Losses 2001 Latest % 15.97% Annual Private Investment, Power 1994-2002 StandDev $m n/a
Trend last
Transmission & Distribution Losses 1971-2001 Mean % 15.15% Annual Private Investment Growth, Power 1995-2002 5 years % n/a
Transmission & Distribution Losses 1971-2001 Median % 15.28%
Transmission & Distribution Losses 1971-2001 StandDev % 3.52% Total Population 2003 Latest 1000s 3,380
Trend last
Transmission & Distribution Losses 1997-2001 5 years % 17.45% Annual Population Growth 2003 Latest % 0.56%
Share of Rural Population 2003 Latest % 7.46%
GDP Growth 2001 Latest % 2.50% Annual Rural Population Growth 2003 Latest % -2.19%
people
per
GDP Growth 1971-2003 Mean % 1.54% Population density, rural 2003 Latest km2 20
GDP Growth 1971-2003 Median % 1.56%
GDP Growth 1971-2003 StandDev % 5.01% Access to Electricity 2000 Latest % 98.00%
Trend last
GDP Growth 1999-2003 5 years % -3.24% Rural population w/ access to electricity 2000 Latest % 74.04%
Annex 2: Work Sheets for Calculation of Estimates for Projected Investments 107
Venezuela, RB
Annual Electricity Consumption 2001 Latest GWh 64,178 Annual Electricity Consumption 2010 Estimate GWh 114,330
Electricity Consumption Growth 1972-2001 Mean % 6.63% Annual Electricity Consumption 2015 Estimate GWh 157,572
Electricity Consumption Growth 1972-2002 Median % 6.60%
Electricity Consumption Growth 1972-2003 StandDev % 5.80% Annual Private Investment, Energy 2000 Latest $m 30
Trend last
Electricity Consumption Growth 1997-2001 5 years % 2.67% Annual Private Investment, Energy 1994-2002 Mean $m n/a
Annual Private Investment, Energy 1994-2002 Median $m n/a
Annual Electricity Production 2001 Latest GWh 89,973 Annual Private Investment, Energy 1994-2002 StandDev $m n/a
Annual Private Investment Growth, Trend last
Electricity Production Growth 1972-2002 Mean % 6.60% Energy 1998-2002 5 years % n/a
Electricity Production Growth 1972-2002 Median % 6.01%
Electricity Production Growth 1972-2002 StandDev % 4.65% Annual Private Investment, Power 1998 Latest $m 133
Trend last
Electricity Production Growth 1997-2001 5 years % 3.57% Annual Private Investment, Power 1998-2002 Mean $m n/a
Annual Private Investment, Power 1994-2002 Median $m n/a
Transmission & Distribution Losses 2001 Latest % 25.28% Annual Private Investment, Power 1994-2002 StandDev $m n/a
Annual Private Investment Growth, Trend last
Transmission & Distribution Losses 1971-2001 Mean % 16.52% Power 1995-2002 5 years % n/a
Transmission & Distribution Losses 1971-2001 Median % 16.09%
Transmission & Distribution Losses 1971-2001 StandDev % 4.28% Total Population 2003 Latest 1000s 25,549
Trend last
Transmission & Distribution Losses 1997-2001 5 years % 23.19% Annual Population Growth 2003 Latest % 1.81%
Share of Rural Population 2003 Latest % 12.36%
GDP Growth 2001 Latest % -9.22% Annual Rural Population Growth 2003 Latest % -0.11%
people
per
GDP Growth 1971-2003 Mean % 1.29% Population density, rural 2003 Latest km2 0
GDP Growth 1971-2003 Median % 1.48%
GDP Growth 1971-2003 StandDev % 4.92% Access to Electricity 2000 Latest % 94.00%
Trend last Rural population w/ access to
GDP Growth 1999-2003 5 years % -3.64% electricity 2000 Latest % 73.00%
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ESMAP TECHNICAL PAPER
089
Study on Investment and Private Sector
Participation in Power Distribution in
Latin America and the Caribbean Region
December 2005
Papers in the ESMAP Technical Series are discussion documents, not final project reports. They
are subject to the same copyright as other ESMAP publications.
114 Study on Investment and Private Sector Participation in Power Distribution in the Latin American
and Caribbean Region
Joint UNDP/World Bank
ENERGY SECTOR MANAGEMENT ASSISTANCE PROGRAMME (ESMAP)
LIST OF TECHNICAL PAPER SERIES
Region/Country Activity/Report Title Date Number
SUB-SAHARAN AFRICA (AFR)
Africa Power Trade in Nile Basin Initiative Phase II (CD Only): 04/05 067/05
Part I: Minutes of the High-level Power Experts
Meeting; and Part II: Minutes of the First Meeting of the Nile
Basin Ministers Responsible for Electricity
Cameroon Decentralized Rural Electrification Project in Cameroon 01/05 087/05
Chad Revenue Management Seminar. Oslo, June 25-26, 2003. (CD Only) 06/05 075/05
C�te d'Ivoire Workshop on Rural Energy and Sustainable Development, 04/05 068/05
January 30-31, 2002. (French Only)
Ethiopia Phase-Out of Leaded Gasoline in Oil Importing Countries of 12/03 038/03
Sub-Saharan Africa: The Case of Ethiopia - Action Plan.
Sub-Saharan Petroleum Products Transportation Corridor: Analysis 03/03 033/03
And Case Studies
Phase-Out of Leaded Gasoline in Sub-Saharan Africa 04/02 028/02
Energy and Poverty: How can Modern Energy Services
Contribute to Poverty Reduction 03/03 032/03
East Africa Sub-Regional Conference on the Phase-out Leaded Gasoline in 11/03 044/03
East Africa. June 5-7, 2002.
Ghana Poverty and Social Impact Analysis of Electricity Tariffs 12/05 088/05
Kenya Field Performance Evaluation of Amorphous Silicon (a-Si)
Photovoltaic Systems in Kenya: Methods and Measurement
in Support of a Sustainable Commercial Solar Energy Industry 08/00 005/00
The Kenya Portable Battery Pack Experience: Test
Marketing an Alternative for Low-Income Rural Household
Electrification 12/01 05/01
Malawi Rural Energy and Institutional Development 04/05 069/05
Mali Phase-Out of Leaded Gasoline in Oil Importing Countries of 12/03 041/03
Sub-Saharan Africa: The Case of Mali - Action Plan. (French)
Mauritania Phase-Out of Leaded Gasoline in Oil Importing Countries of 12/03 040/03
Sub-Saharan Africa: The Case of Mauritania - Action Plan. (French)
Nigeria Phase-Out of Leaded Gasoline in Nigeria 11/02 029/02
Nigerian LP Gas Sector Improvement Study 03/04 056/04
Taxation and State Participation in Nigeria's Oil and Gas Sector 08/04 057/04
Regional Second Steering Committee: The Road Ahead. Clean Air Initiative
In Sub-Saharan African Cities. Paris, March 13-14, 2003. 12/03 045/03
Lead Elimination from Gasoline in Sub-Saharan Africa. Sub-regional
Conference of the West-Africa group. Dakar, Senegal
March 26-27, 2002 (French only) 12/03 046/03
1998-2002 Progress Report. The World Bank Clean Air Initiative 02/02 048/04
in Sub-Saharan African Cities. Working Paper #10 (Clean Air Initiative/ESMAP)
Landfill Gas Capture Opportunity in Sub Saharan Africa 06/05 074/05
The Evolution of Enterprise Reform in Africa: From 11/05 084/05
State-owned Enterprises to Private Participation in Infrastructure
--and Back?
Senegal Regional Conference on the Phase-Out of Leaded Gasoline in
Sub-Saharan Africa 03/02 022/02
- 2 -
Region/Country Activity/Report Title Date Number
Senegal Elimination du Plomb dans I'Essence en Afrique Sub-Saharienne
Conference Sous Regionales du Groupe Afrique de I'Quest. Dakar,
Senegal. March 26-27, 2002. 12/03 046/03
Alleviating Fuel Adulteration Practices in the Downstream
Oil Sector in Senegal 09/05 079/05
South Africa South Africa Workshop: People's Power Workshop. 12/04 064/04
Swaziland Solar Electrification Program 20012010: Phase 1: 20012002
(Solar Energy in the Pilot Area) 12/01 019/01
Tanzania Mini Hydropower Development Case Studies on the Malagarasi,
Muhuwesi, and Kikuletwa Rivers Volumes I, II, and III 04/02 024/02
Phase-Out of Leaded Gasoline in Oil Importing Countries of 12/03 039/03
Sub-Saharan Africa: The Case of Tanzania - Action Plan.
Uganda Report on the Uganda Power Sector Reform and Regulation
Strategy Workshop 08/00 004/00
WEST AFRICA (AFR)
Regional Market Development 12/01 017/01
EAST ASIA AND PACIFIC (EAP)
Cambodia Efficiency Improvement for Commercialization of the Power
Sector 10/02 031/02
TA For Capacity Building of the Electricity Authority 09/05 076/05
China Assessing Markets for Renewable Energy in Rural Areas of
Northwestern China 08/00 003/00
Technology Assessment of Clean Coal Technologies for China
Volume I--Electric Power Production 05/01 011/01
Technology Assessment of Clean Coal Technologies for China
Volume II--Environmental and Energy Efficiency Improvements
for Non-power Uses of Coal 05/01 011/01
Technology Assessment of Clean Coal Technologies for China
Volume III--Environmental Compliance in the Energy Sector:
Methodological Approach and Least-Cost Strategies 12/01 011/01
Philippines Rural Electrification Regulation Framework. (CD Only). 10/05 080/05
Thailand DSM in Thailand: A Case Study 10/00 008/00
Development of a Regional Power Market in the Greater Mekong
Sub-Region (GMS) 12/01 015/01
Vietnam Options for Renewable Energy in Vietnam 07/00 001/00
Renewable Energy Action Plan 03/02 021/02
Vietnam's Petroleum Sector: Technical Assistance for the Revision 03/04 053/04
of the Existing Legal and Regulatory Framework
SOUTH ASIA (SAS)
Bangladesh Workshop on Bangladesh Power Sector Reform 12/01 018/01
Integrating Gender in Energy Provision: The Case of Bangladesh 04/04 054/04
Opportunities for Women in Renewable Energy Technology Use 04/04 055/04
In Bangladesh, Phase I
- 3 -
Region/Country Activity/Report Title Date Number
EUROPE AND CENTRAL ASIA (ECA)
Russia Russia Pipeline Oil Spill Study 03/03 034/03
Uzbekistan Energy Efficiency in Urban Water Utilities in Central Asia 10/05 082/05
MIDDLE EASTERN AND NORTH AFRICA REGION (MENA)
Regional Roundtable on Opportunities and Challenges in the Water, Sanitation 02/04 049/04
And Power Sectors in the Middle East and North Africa Region.
Summary Proceedings, May 26-28, 2003. Beit Mary, Lebanon. (CD)
Morocco Am�lioration de d�Efficacit� Energie: Environnement de la Zone
Industrielle de Sidi Bernoussi, Casablanca 12/05 085/05
LATIN AMERICA AND THE CARIBBEAN REGION (LCR)
Brazil Background Study for a National Rural Electrification Strategy: 03/05 066/05
Aiming for Universal Access
Bolivia Country Program Phase II: Rural Energy and Energy Efficiency 05/05 072/05
Report on Operational Activities
Chile Desaf�os de la Electrificaci�n Rural 10/05 082/05
Ecuador Programa de Entrenamiento a Representantes de Nacionalidades
Amaz�nicas en Temas Hidrocarbur�feros 08/02 025/02
Guatemala Evaluation of Improved Stove Programs: Final Report of Project 12/04 060/04
Case Studies
Mexico Energy Policies and the Mexican Economy 01/04 047/04
Nicaragua Aid-Memoir from the Rural Electrification Workshop (Spanish only) 03/03 030/04
Sustainable Charcoal Production in the Chinandega Region 04/05 071/05
Regional Regional Electricity Markets Interconnections -- Phase I
Identification of Issues for the Development of Regional
Power Markets in South America 12/01 016/01
Regional Electricity Markets Interconnections -- Phase II
Proposals to Facilitate Increased Energy Exchanges in South
America 04/02 016/01
Population, Energy and Environment Program (PEA)
Comparative Analysis on the Distribution of Oil Rents
(English and Spanish) 02/02 020/02
Estudio Comparativo sobre la Distribuci�n de la Renta Petrolera
Estudio de Casos: Bolivia, Colombia, Ecuador y Per� 03/02 023/02
Latin American and Caribbean Refinery Sector Development
Report � Volumes I and II 08/02 026/02
The Population, Energy and Environmental Program (EAP)
(English and Spanish) 08/02 027/02
Bank Experience in Non-energy Projects with Rural Electrification 02/04 052/04
Components: A Review of Integration Issues in LCR
Supporting Gender and Sustainable Energy Initiatives in 12/04 061/04
Central America
- 4 -
Region/Country Activity/Report Title Date Number
Energy from Landfill Gas for the LCR Region: Best Practice and 01/05 065/05
Social Issues (CD Only)
Study on Investment and Private Sector Participation in Power 12/05 089/05
Distribution in Latin America and the Caribbean Region
GLOBAL
Impact of Power Sector Reform on the Poor: A Review of Issues
and the Literature 07/00 002/00
Best Practices for Sustainable Development of Micro Hydro
Power in Developing Countries 08/00 006/00
Mini-Grid Design Manual 09/00 007/00
Photovoltaic Applications in Rural Areas of the Developing
World 11/00 009/00
Subsidies and Sustainable Rural Energy Services: Can we Create
Incentives Without Distorting Markets? 12/00 010/00
Sustainable Woodfuel Supplies from the Dry Tropical
Woodlands 06/01 013/01
Key Factors for Private Sector Investment in Power
Distribution 08/01 014/01
Cross-Border Oil and Gas Pipelines: Problems and Prospects 06/03 035/03
Monitoring and Evaluation in Rural Electrification Projects: 07/03 037/03
A Demand-Oriented Approach
Household Energy Use in Developing Countries: A Multicountry 10/03 042/03
Study
Knowledge Exchange: Online Consultation and Project Profile 12/03 043/03
from South Asia Practitioners Workshop. Colombo, Sri Lanka,
June 2-4, 2003
Energy & Environmental Health: A Literature Review and 03/04 050/04
Recommendations
Petroleum Revenue Management Workshop 03/04 051/04
Operating Utility DSM Programs in a Restructuring
Electricity Sector 12/05 058/04
Evaluation of ESMAP Regional Power Trade Portfolio 12/04 059/04
(TAG Report)
Gender in Sustainable Energy Regional Workshop Series: 12/04 062/04
Mesoamerican Network on Gender in Sustainable Energy
(GENES) Winrock and ESMAP
Women in Mining Voices for a Change Conference (CD Only) 12/04 063/04
Renewable Energy Potential in Selected Countries: Volume I: 04/05 070/05
North Africa, Central Europe, and the Former Soviet Union,
Volume II: Latin America
Renewable Energy Toolkit Needs Assessment 08/05 077/05
Portable Solar Photovoltaic Lanterns: Performance and 08/05 078/05
Certification Specification and Type Approval
Crude Oil Prices Differentials and Differences in Oil Qualities:
A Statistical Analysis 10/05 081/05
Operating Utility DSM Programs in a Restructuring Electricity Sector 12/05 086/05
Last report added to this list: ESMAP Technical Paper 089/05.