1. Energy Sector Reform L ancaster House, 21 / 22 February 2002 Energy Sector Reform Poverty Reduction, Growth and Debt Sustainability in Low-Income CIS Countries L ancaster House, 21 / 22 February 2002  

2. Energy sector challenges in the CIS-7 High energy intensity High energy intensity –How to encourage energy efficiency? Low energy prices and collection rates Low energy prices and collection rates –How to improve tariff setting and collection? Affordability of energy a key concern Affordability of energy a key concern – How to provide targeted support for the poor? Poor performance in the power sector Poor performance in the power sector – How to reform the power sector?

3. Increasing energy efficiency Energy intensities are among the highest in the world Energy intensities are among the highest in the world

4. Adjusting tariffs Tariff level cover full cost Industrial vs Residential phase out cross subsidies Collection rates reduce non-payment and arrears Source: Transition Report 2001. Data for 2000

5. Improving the ability to pay Tariff reform exacerbates affordability problems Willingness vs ability to pay Support for low income households free consumption block targeted subsidies Enterprise restructuring

6. Improving performance in the power sector Institutional framework for commercialisation separate generation, transmission and distribution? improve regulatory environment Private sector involvement in distribution improve collection rates mobilise international capital Private sector involvement in generation mobilise international capital