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The objective of the study is to: (i) assess the adequacy of the existing heat and electricity tariff levels for achieving financial viability of the energy sector operators; (ii) analyze the distributional implications of energy tariff increases; and (iii) assess the effectiveness of the existing social assistance programs and how to adjust them to mitigate the impact of energy tariff increase on the poor This report presents the key findings and recommendations for the Government of Moldova as well as other energy sector stakeholders. The report starts with a synopsis that summarizes the key findings and recommendations. The main report section starts with an introduction to country context, presents the design of tariff setting methodologies, and assesses the adequacy of tariffs based on constructed scenarios. Thereafter analysis of the distributional impact of projected range of tariff increases and the need to adjust the social assistance programs to mitigate the impact on the poor are presented. The report concludes with recommendations for the government on actions to be implemented on tariff setting methodologies and social assistance as well as areas for further research. Appendices include further background information of the analysis.

The World Bank Group has committed to achieving universal access to electricity by 2030 under the Sustainable Energy for All (SE4All) initiative. This is a daunting challenge: more than 1 billion people do not have access, and another 1 billion have chronically inadequate or unreliable service. Most of those without access are poor, and the largest share is in Sub-Saharan Africa. Achieving universal access within 15 years for the low-access countries (those with under 50 percent coverage) requires a quantum leap from their present pace of 1.6 million connections per year to 14.6 million per year until 2030. The investment needed would be about $37 billion per year, including erasing generation deficits and meeting demand from economic growth. By comparison, in recent years, low-access countries received an average of $3.6 billion per year for their electricity sectors from public and private sources, including $1.5 billion per year from the World Bank Group. Development outcomes of the Bank Group’s assistance were generally favorable compared with other infrastructure sectors. However, performance in improving financial viability of country electricity sectors was below expectations. There were significant gaps in the Bank Group’s coverage of low-access countries, mostly in Sub-Saharan Africa. Median implementation time of World Bank investment projects was nine years, with time overruns attributable to inadequate project design and borrower capacity. Support for off-grid electrification was low and sporadic, with a few notable exceptions. The Bank Group’s growing non-conventional renewable energy portfolio is dealing with technology and regulatory challenges. Tracking welfare and gender impacts in World Bank projects has improved, and International Finance Corporation (IFC) has made a beginning in addressing these issues. The Bank made some significant pilot contributions to addressing the affordability of electricity connections. Collaboration grew among World Bank, IFC, and MIGA through joint projects, which helps break ground for the private sector in some high-risk and fragile countries, and supports a few large and complex projects. The scale of the SE4All challenge requires the Bank Group to reposition itself as a global solutions provider in the sector, going well beyond the confines of its own direct support for access. This evaluation points to the urgency for the Bank Group‘s energy practice to adopt a new and transformative strategy to help country clients orchestrate a national, sustained sector-level engagement for universal access. A major challenge in this effort is to deploy the Bank Group units’ individual and collective strengths beyond Bank Group–led projects and transactions to stimulate private sector investments for closing the financing gap, especially in generation, for low-access countries.

It has been more than two decades since the widespread initiation of global power sector reforms and restructuring. However, empirical evidence on the intended microeconomic, macroeconomic, and quality-related impacts of reforms across developing countries is lacking. This paper comprehensively reviews the empirical and theoretical literature on the linkages between power sector reforms, economic and technical efficiency, and poverty reduction. The review finds that the extent of power sector reforms has varied across developing countries in terms of changes in market structures, the role of the state, and the regulation of the sector. Overall, the reforms have improved the efficiency and productivity in the sector among many reforming countries. However, the efficiency gains have not always reached the end consumers because of the inability of sector regulators and inadequate regulatory frameworks. Reforms alleviate poverty and promote the welfare of the poor only when the poor have access to electricity. From a policy-making perspective, this implies that the reforms need to be supplemented with additional measures for accelerating electrification to help the poor.

South Asian countries, facing challenges in efficiently meeting growing electricity demand, can benefit from increased cross-border electricity cooperation and trade by harnessing complementarities in electricity demand patterns, diversity in resource endowments for power generation, and gains from larger market access. The region has witnessed slow progress in expanding regional electricity cooperation and trade, and undertaking needed domestic sector reforms. Although bilateral electricity sector cooperation in the region is increasing, broader regional cooperation and trade initiatives have lagged in the face of regional barriers and domestic sector inefficiencies. Deeper electricity market reforms are not a necessity for further development of cross-border electricity trade, but limited progress in overcoming regional and domestic barriers will limit the scope of the regional market and the benefits it can provide.

This report identifies the most viable heating options and related investment measures to meet heating demand in urban residential and public buildings in Tajikistan. The report provides an overview of the condition and performance of the urban heating sector and building stock, and assesses, in detail, the situation in Dushanbe and Khujand. The report gives introduction in section one. Section two gives an overview of the physical, institutional, and regulatory characteristics of the urban heating sector in Tajikistan and includes an analysis of the urban building stock. Sections three and four describe the heat supply and demand characteristics of Dushanbe and Khujand and estimate the unmet heating demand in these cities. Section five evaluates the available supply and demand side heating options and investment measures that can be implemented to improve the heating sectors in the target cities. Section six recommends priority investment measures for each building type, identifies related policy actions to facilitate implementation of the recommended investments, highlights key implementation issues, and describes the next steps necessary to implement them.

The Tool for Rapid Assessment of City Energy (TRACE) is used for conducting rapid assessments of energy use in cities. It helps prioritize sectors with significant energy savings potential, and identifies appropriate energy efficiency interventions across six sectors-transport, municipal buildings, water and waste water, public lighting, solid waste, and power and heat. It is a simple, low-cost, user-friendly, and practical tool that can be applied in any socioeconomic setting. This report is based on the implementation of the TRACE tool in Constanta in July 2013 and it outlines ideas on what the city could further do to improve its energy efficiency performance. It details the analysis carried out and the recommendations derived as a result, for district heating maintenance and upgrade, non-motorized transport, public transport development, parking restraint measures, municipal building benchmarking program, municipal buildings audit and retrofit, street lighting timing program, energy efficiency action plan and strategy, and awareness raising campaigns.

The Tool for Rapid Assessment of City Energy (TRACE) is used for conducting rapid assessments of energy use in cities. It helps prioritize sectors with significant energy savings potential, and identifies appropriate energy efficiency interventions across six sectors-transport, municipal buildings, water and waste water, public lighting, solid waste, and power and heat. It is a simple, low-cost, user-friendly, and practical tool that can be applied in any socioeconomic setting. This report is based on the implementation of the TRACE tool in Timisoara in April 2013 and outlines ideas on what the city could further do to improve its energy efficiency performance. It details the analysis carried out and the recommendations derived as a result, for district heating maintenance and upgrade, non-motorized transport, public transport development, parking restraint measures, municipal buildings audit and retrofit, street lighting timing program, and active leakage of water and pressure management.

The Government of Peru is committed to improving rural electrification coverage, aiming to increase rural coverage from an estimated 55 percent at the end of 2010 to 88 percent by 2020. To achieve this goal, the Directorate General of Rural Electrification (DGER) of the Ministry of Energy and Mines (MEM) has been implementing and executing the National Plan for Rural Electrification, prepared annually, based on the 2006 Rural Electrification Law, to extend service and attract participation of the population, local governments and electricity distribution companies. Within this program, the World Bank (WB) and Global Environmental Facility (GEF) are supporting the Directorate of Competitive Funds (DFC) of the DGER in the implementation and execution of the Rural Electrification (RE) Project, initiated in July 2006 and the Second Rural Electrification Project initiated in July 2011, to assist electricity distribution companies to implement rural electrification. Among the activities underway in the first RE Project is the implementation of a pilot program to develop the productive use of electricity, promoting opportunities for income generation in rural areas. This report provides an early assessment of the productive uses of electricity in Peru under the RE Project.

This case study is part of an analytical effort aimed at advising World Bank staff and country clients on options for private sector participation (PSP) in transmission and distribution. The report is based on data collected on the Peruvian case, the review of literature, as well as on a set of interviews held with power sector agencies, including the regulator and system operator, power sector companies and experts in the field. The problems of the power sector were linked to its structure, a legal framework that guaranteed a public monopoly and the use on subsidies as a political tool to redistribute income and control inflation. The crisis justified measures in line with a thorough neoliberal economic reform that was underway. This reform included the reduction of an oversized public sector and the unbundling and privatization of the power sector. The privatization of transmission was justified on the grounds of attracting fresh capital and achieving greater efficiency. PSP in distribution was justified on the same grounds, plus another important factor, it was seen also as a way to prevent or minimize government interference on the day‐to‐day operations of utilities and, most important, to avoid the politicization of electricity tariffs.

This book chronicles the development of Vietnam's rural electrification program. It tells the story of how the Vietnamese government conceived, developed, scaled up, and improved its program. It also discusses the role the government, the countries main utility, local authorities, local communities, and the country's international development partners played in the pursuit of the electrification agenda. The book provides an overview of the strategies that fueled the impressive expansion of access to electricity in Vietnam, the development of the institutions that implemented the program and the passage of policies and laws that made growth of such scale possible. It also discusses results from the ground, and particularly the impacts of electrification on people's lives. It concludes with an attempt to draw lessons from Vietnam's experience. The book comprises three main parts: part A, made up of eight sections, provides an overview of Vietnam's rural electrification experience, which can be divided into six distinct periods. Part B summarizes a select set of findings from the multiyear survey and discusses the impact of rural electrification on Vietnamese households. Part C draws lessons from the experience of rural electrification in Vietnam, based on the information presented in parts A and B. It discusses the lessons learned from the perspectives of the government and the World Bank.

The Strategic Framework for Development and Climate Change (SFDCC) approved in 2008 guides and supports the operational response of the World Bank Group (WBG) to new development challenges posed by climate change. One activity pursued by the SFDCC is to further develop and test methods to analyze climate risks and greenhouse gas (GHG) emissions at the project level. The SFDCC emphasizes the need to improve GHG accounting activities at the project level to understand the implications of the World Bank's interventions. The objective of this study is to contribute to the SFDCC goal of improving GHG accounting in the energy sector by reviewing, assessing, and recommending GHG accounting methodologies for electricity Transmission and Distribution (T&D) projects. Existing methodologies are examined to test whether they can provide simple and accurate estimates of net project emissions. In addition, the study identifies and conceptually designs a methodological approach for T&D projects. The study focuses on the T&D sector due to its importance in the World Bank's energy lending portfolio and the lack of comprehensive methodologies to determine the impact of such interventions on GHG emissions. The study builds on existing information and relies on methodologies developed under different climate finance mechanisms such as the Clean Development Mechanism (CDM). The study also considers some of the fundamental principles in other accounting procedures, such as corporate GHG accounting. Methodologies that have the objective of emissions accounting for climate finance mechanisms need to have specific characteristics, such as additionality and ex post monitoring. These methodologies must calculate a project's emissions reductions or increases by estimating the project's net emissions impact.

The overall fiscal position of Bangladesh looks sustainable, but there are concerns that the country may be trapped in a low revenue-low capital spending equilibrium, which is holding back Bangladesh’s growth potential. Eliminating wasteful spending and halting fiscal drains through inefficient non-financial public corporations (NFPCs) are important ways to create fiscal space, particularly in the area of infrastructure. This paper reviews the financial performance of the NFPC sector in Bangladesh, with a specific focus on two major loss-making firms: Bangladesh Petroleum Corporation (BPC) and Power Development Board (PDB). The objective of this paper is to update the Bank’s knowledge on the financial performance of the NFPC sector and estimate the fiscal costs emanating from the sector.

Vietnam is implementing a long run reform agenda for the power sector, with the aim of restructuring the sector to improve internal operations, efficiency, and the quality of services. The World Bank has an ongoing engagement in the sector which started in 1995. The design and implementation of the power sector reform strategy has been supported through technical assistance and lending operations, as well as preparation of a proposed series of Power Sector Reform Development Policy Loans (DPLs). A number of Poverty and Social Impact Assessment (PSIA) activities will be carried out in support of Vietnam's power sector reforms and as part of the World Bank's due diligence work for the power sector DPLs. This PSIA focuses on assessing the distributional impacts of recent tariff reforms introduced in March, 2009 which changed Vietnam's Incremental Block Tariff (IBT) structure for residential consumers. In addition to changes in lifeline tariffs and coverage, all on-grid rural consumers were brought under a unified tariff structure.

Supply-demand tension has taken its toll in various countries around the world over the last several years. Governments and utilities have faced gaps between electricity supply and demand, which has led to blackouts and load shedding and translated into electricity shortfalls. While countries look to avoid the prospects of supply shortages by, inter alia, strengthening planning capacity and working to achieve a sounder and more sustainable electricity sector, the possibility of shortages in the future remains. This document summarizes the framework for action and a broad menu of options available to policymakers to bridge a supply demand gap in the short- to medium-term.

This report synthesizes the findings for the energy sector of a broader study, the Brazil low carbon study, which was undertaken by the World Bank in its initiative to support Brazil's integrated effort towards reducing national and global emissions of greenhouse gases while promoting long term development. The main aim of the study is to examine the potential for abating Greenhouse Gas (GHG) emissions in Brazil in the energy area and to assess the relative costs of doing so for the time frame 2010-2030. Basically the study seeks to demonstrate by how much, by when and at what cost Brazil could reduce its GHG energy sector emissions. Given its special features, the fuel use and emissions of greenhouse gases in the transportation sector are dealt with in another report of this project. In addition the study aims to provide information for the Brazilian government to enable it to develop a long-term strategy (2030) for reducing carbon in the energy area (except the transport sector) and, more specifically, to provide the technical input needed for evaluating the potential for reducing greenhouse gas emissions produced by the key economic sectors. In short, the study seeks to identify the different options and opportunities that could justify possible international resources being allocated to Brazil. The teams involved in the study needed first to focus on the proposed mitigation and carbon sequestering options and then, after identifying these proposals, to focus on existing barriers to the successful deployment of these options and suggest a set of public policies which could be mobilized to overcome them. The study also provides estimates of the scale of investments and operating costs likely to be involved, as well as a mitigation cost curve.

Sub-Saharan Africa will require substantial investments in the power sector on the order of 4 percent of the region's gross domestic product (GDP) annually before 2015 if it is to meet the demands of economic development, keep pace with population growth, and expand electrification beyond the 2005 regional average of just 34 percent. Developing a regional power-trading market that exploits the vast hydropower potential of the subcontinent may be the best way to bring those costs down while also protecting against increases in oil prices and curbing carbon emissions. Expanding electrification is a daunting challenge, but the costs associated with extending the transmission network are minor in comparison with the investments in generation needed to accompany the demand of Africa's growing economies.