and comment on the role and contribution of the private sector to date at a conference this spring in the UK, cosponsored by The North South Institute and the Wilton Park Centre, with support from IDRC, DFID and SIDA.

The analysis presented by George Davies, President of Acres Management Consulting, showed that despite a significant trend towards increasing private sector investment in the energy sector in developing countries in the early to late 1990s, after a peak reached in 1997, there has been significant shrinkage. This has coincided with the financial collapse of many of the key sponsors of private sector investment, in large part due to the meltdown in the market capitalization and financial performance of US merchant energy companies such as Enron, Mirant, AES and Calpine. The problem of private sector performance has been exacerbated by the losses suffered by the financial community in the energy sector where markets for electricity were liberalized. The paper questions the reliance on market liberalization if it introduces too much uncertainty for private investment, and if both the private power companies and the financial community lack the will to invest and carry risk in liberalized power markets. George suggests greater focus on solving the root problems of poor performance in the power sector by stressing institutional strengthening through management training in the utilities, regulators and government, learning from best practices in operations and regulation, getting the tariffs right, improving revenue collections, introducing performance based regulation, and promotion of measures for greater interregional cooperation in electricity supply.

For more information on our findings or information on how Acres can help in implementing performance solutions in the power sector, please contact :