Power for Development: A Review of the World Bank Group's Experience with Private Participation in the Electricity Sector

The purpose of this study is to assess the results of the World Bank Group's (WBG's) private sector development (PSD)-related interventions during the 1990s in the power sectors of some 80 developing and transition countries and to answer four evaluation questions: (i) how have private participation and the WBG's role changed in the 1990s; (ii) to what extent has the WBG's assistance supported its PSDE strategies; (iii) what have been the results of the WBG's private sector development in the electric power sector (PSDE) interventions; and (iv) what are the lessons that should guide the WBG's future business directions in promoting PSDE. As WBG assistance in the power sector is still needed, particularly at this time when foreign investors are retreating from the sector, the study derives lessons from experience to inform the ongoing implementation of the EBRS. To date, PSDE practitioners have been learning by doing, with the WBG having the advantage of institutional scope and memory. The continually evolving practices in PSDE make difficult the establishment of convincing theories about the optimal sequencing of reforms, although the catalogue of things to avoid continues to expand. Within the WBG, PSDE practice is a moving target, making it particularly difficult to establish evaluative benchmarks to measure results, other than the stated objectives of the individual PSDE project and the overall PSDE program (if any) at the country level. Moreover, given the number of stakeholders and practitioners (other than the WBG), as well as the unpredictability of reform outcomes, it is challenging to assess the extent to which WBG interventions were pivotal or decisive catalysts of reform, and to recommend how this role could be enhanced in the future.