The Impact of IPPs in Developing Countries : Out of the Crisis andinto the Future

Albouy, Yves; Bousba, Reda

The Impact of IPPs in Developing Countries : Out of the Crisis andinto the Future

1998

Albouy, Yves | Bousba, Reda

Developing countries started opening their power sectors to independent power producers (IPPs) some ten years ago, and IPPs have now developed into a large market. This Note examines several contentious questions relating to the developing of this market: Has risk been transferred to the private sector, or have IPPs contributed to an increase in government liabilities? Have IPPs contributed an increase in foreign exchange exposure? Are pricing and investment decisions efficient? Have IPPs contributed to sector modernization? Answering these questions has become more pressing with the global financial crisis. The Note concludes that on the whole IPPs have had a positive development impact. But negative effects become significant when the IPP program quickly grows to a large size relative to the host grid capacity, as has happened in a few Asian countries.

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AGROVOC Keywords

accounting agriculture auctions coal consumers debt developing countries development banks economic growth electricity exchange rate fixed costs fuels imports insurance interest rates marginal costs market liberalization operating costs private sector privatization public sector retail risk sales savings telecommunications transaction costs

Bibliographic information

Publisher

World Bank, Washington, DC

Other Subjects

Government guarantees; Supply costs; Resource mobilization; Private investments; Internal cash generation; Capital markets; Price caps; Balance sheet; Market risks; Energy prices; Transparency; Foreign exchange; Moral hazard; Spot prices; Financial crisis; Financial crises; Quotas; Government liability; Power sector; Price variations; Maturities; Local capital markets; Bidding; Government planning; Electricity pricing; Foreign exchange exposure; Capacity costs; Power distribution; Exchange rates; Utilities independent power producers; Market risk; Capital costs; Present value; Producers; Borrowing; Price subsidies

License

Viewpoint: Public Policy for the Private Sector; Note No. 162http://creativecommons.org/licenses/by/3.0/World BankCC BY 3.0 Unported

Source

Viewpoint: Public Policy for the Private Sector; Note No. 162

In AGRIS since: 2014-09-15

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Links

http://hdl.handle.net/10986/11513

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