CAREC Energy Strategy Pillar 2

Scaled-Up Investments through Market-Oriented Reforms

Energy markets that stimulate competition, attract investment, and generate efficiency across the value chain deliver well-functioning energy services to consumers. In a number of CAREC countries, the energy sector is now undergoing important structural adjustments, moving from a purely state-owned and vertically integrated system to unbundled and liberalized market structures with larger private sector participation.

The core vision for the next 10 years is to restore financial health in the energy sector in the region by unbundling state-owned companies and introducing modern management practices and cost-reflective tariffs. Finding the right tariff is a true balancing act between competing benefits, such as providing high-quality service at low cost, protecting marginal consumers, and expanding energy access to all consumers. This trade-off becomes even more severe when complementary measures—such as the phaseout of fossil-fuel subsidies, an indispensable tool for leveling the playing field for diverse power sources and achieving financial stability in the energy sector— are introduced.

In tackling the typical dilemmas and trade-offs faced by policy makers in the reform process, capacity building and knowledge sharing are key. The CAREC program will therefore make a particular effort to equip policy makers with practical and tailor-made guidance to allow them to take informed decisions in the complex process of energy sector reform. The virtual CAREC Energy Reform Atlas is the new go-to place for concerned stakeholders, to answer their questions about how to prepare, implement, and advance energy sector reforms.

Pillar 2 Initiatives:

50%
Build capacity for unbundling models and liberalization of energy markets
Advise on tariff-setting principles and methods of introducing tariff reform
Develop options for social protection measures for vulnerable energy consumers
Share international best practices in legal enforcement of sector reform
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In progress
In progress
Upcoming
Upcoming
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