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Over the last twelve years, power sector reforms have progressed significantly in Eastern Europe and Central Asia. Before the transition from planned to market economies began in early 1990s, power enterprises were in most cases completely state-owned and state-run operations managed without much consideration given to commercial principles or environmental impact. Governments' policies concentrated mostly on reliable provision of power to industrial and residential consumers with little regard for cost recovery or energy conservation. These policies resulted in the overall high energy intensity, low operational efficiency, and high losses in transmission and distribution systems.
Since then, most power companies have been re-established as corporate entities, the legal and regulatory framework has been developed to facilitate the commercialization of the power sector, tariffs have been increased to reflect the actual production cost, and payment discipline has been improved.
In many countries, some form of private sector involvement was introduced, either through privatization or through concession-type arrangements. Recently, however, private investments into power production and distribution have declined due to the slow pace of power sector reforms in CIS countries, the retrenchment of international power investors triggered by disappointing investment returns in emerging markets, as well as global economic uncertainties.
Read more: Sustainable Energy in Europe and Central Asia Region (PDF, 25 KB)
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