Minutes of meeting of the Board of Directors of IFC, held on Thursday, March 3, 2011
Tilak, Jandhyala B. G.
As part of its profound, on-going movement from a centralized, planned socialist economic system toward a market-oriented economy, Poland has had to confront the need for institutional and regulatory reforms of its energy sector. That need is compounded by declining output of coal - the major, traditional, domestic energy source as well as an export earner - and by environmental and other pressures that dictate a significant expansion in the use of gas, much of which will probably have to be imported. The highly integrated structure of the energy sector, developed in the context of a command economy, has perpetuated rigidities and inefficiencies that impede needed change. As part of its broader process of radical economic reform, Poland needs to provide a new framework for its energy sector, one that encourages competition and market forces and harnesses economic principles and commercial incentives along with effective regulation to the development of an economic, reliable and environmentally sound energy supply. The first volume of this report presents a comprehensive summary and synthesis of the key recommendations of a series of detailed restructuring studies undertaken by World Bank/UNDP Energy Sector Management Assistance Programme (ESMAP) in 1990-91 on the Polish energy sector. These studies stem from a request by the Government of Poland for advice in defining a restructuring program for the energy sector. This request led ESMAP to begin examining the Polish energy sector with the intent of identifying the restructuring measures appropriate for each of the major subsectors involved, namely: hard coal; gas and indigenous oil exploration and production; electricity and lignite; and district heating. The studies examine the structural problems of the sector in detail, assess the options for reform to achieve greater efficiency and market orientation, and recommend detailed, concrete restructuring proposals for the key subsector enterprises.
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