RESTRUCTURING IN THE ENERGY SECTOR OF MOLDOVA. Anatol Saracuta Head of Auditing Department, ANRE

Transcription

1 RESTRUCTURING IN THE ENERGY SECTOR OF MOLDOVA Anatl Saracuta Head f Auditing Department, ANRE

2 Histry Mldva pwer sectr befre the refrms: Management Gvernment and Department f Energy State Cmpany Mldenerg (vertically integrated) Transnistrian enterprises (Thermelectric Pwer Statin, HPP and 2 distributin cmpanies) Legal and nrmative acts Regulatin n electricity supply and payment Bucharest, February 4,

3 Histry (cnt-ed) Existing cnditins Chrnic nn-payments and barter transactins; Privileges with n financial cverage; Tariffs nt cvering the csts; Huge debts t electricity and fuel suppliers; Transfrmatin f pwer sectr debts int state external debts; Daily rtating black-uts; Enrmus electricity lsses and thefts; Lack f funds fr system develpment, rehabilitatin and maintenance; All energy enterprises unprfitable (essentially bankrupt) Bucharest, February 4,

4 Pwer Sectr Transitin Management Department t(ministry) i f fenergy carries ut state t energy plicy ANRE carries ut the activity f pwer sectr regulatin Enterprises 4 independent generatin cmpanies (3 CHPs and 1 HPP) 5 distributin cmpanies (3 - privatized in 2000 and 2 SC) SC Mldelectrica (transmissin and dispatch activity) Transnistrian enterprises (nly the Thermelectric Pwer Statin is privatized) Bucharest, February 4,

5 Pwer Sectr Transitin (cnt-ed) Established legal and nrmative acts Energy Law Electricity Act Law n individual privatizatin plans Law n restructuring the debts f energy sectr enterprises ANRE regulating acts, nrms and prcedures Other legal and nrmative acts related t energy sectr enterprises activity Bucharest, February 4,

6 Pwer Sectr Tday Current situatin Eliminatin f barter transactins, % cash payments py Repeal f all privileged cnsumers and established direct state cmpensatins Cst-based tariffs N current debts t whlesale l electricity it suppliers N lnger pwer sectr debts assumed by the state Electricity available n a twenty-fur hur basis; Decrease f electricity lsses and debts; Enterprises started t invest in system develpment, rehabilitatin and maintenance (new investments in privatized as well as state enterprises); Pwer sectr enterprises have significantly imprved their financial cnditin (n threat f bankruptcy) and prfitable Bucharest, February 4,

7 Restructuring and Privatizatin Preparatry phase: 1. Financial restructuring (debt restructuring), Organizatinal restructuring: demnplizatin f Mldenerg and creatin f independent enterprises (3 CHPs, HPP, 5 discs and a transmissin and dispatch cmpany), Institutinal restructuring: Creatin f regulatry authrity (ANRE), Develpment and adptin f laws ( ) : Energy law Electricity act Law n privatizatin Law n individual privatizatin plans Law n debts restructuring Bucharest, February 4,

8 Restructuring and Privatizatin (cnt-ed) Preparatry phase (cntinued) 5. Annulment f all privileges n electricity payment and replaced with direct state cmpensatins, Settlement f land title issues, Strengthening ANRE rle: Ensuring the independency thrugh legal acts; Develpment and issuance f licenses with a validity terms f 25 years t all enterprises; Ensuring that license cnditins are nt amended unilaterally Develped and apprved pwer market rules based n bilateral cntracts Tariff methdlgy cmplying with the market ecnmy principles fr a stable perid Annualy tariff reviews and adjustments apprved Regulating nrms and prcedures (service rules, dispute reslutin, market rules, etc.) Substantive independency and penness in decisin-making prcess Bucharest, February 4,

9 Privatizatin prcess (cntinued) Privatizatin phase: 1. Assessment f financial and technical perfrmance f cmpanies (due diligence) by EBRD, CANTOR, KPMG, 1999 distributin 2. Selectin f the investment bank, (CCF), Held cnferences and meetings with ptential investrs and internatinal mass-media in Lndn, Paris and Madrid (DP, MF, ANRE, CCF), Establishment f tender cmmissin, Develpment f tender dcuments, Annuncement f privatizatin bid, August Pre-selectin f bidders, Nvember Evaluatin f ffers and tender results, December Negtiatins, December 1999 February Signing f Agreement fr sale-purchase f shares fr 3 ut f 5 Discs, February 2000 Bucharest, February 4,

10 Main cnditins i and criteria i f privatizatin IPP Law: Sale f 100% share package 5 distributin cmpanies in 3 lts Sl Sale t ne investr 2l lts at mst Highest price fr share package Highest level f investments Investr s experience and financial strength Bucharest, February 4,

11 Rle f Regulatr (ANRE) Privatizatin carried ut by gvernment (Tender Cmmissin and DP) ANRE: Independent regulating authrity Nt a member f Tender Cmmissin Advisr t the gvernment, DP and investment bank Participatin in all Cmmissin meetings Participated and authred legal and nrmative prcedures fr bid selectin A principal participant in bid negtiatin prcess Bucharest, February 4,

12 Rle f Regulatr (cnt-ed) Main issues: 1. Tariff Methdlgy: Duratin (7 years I perid, nw -5 years) First year base csts and tariff (basic tariff) Established parameters and prcedure fr annual tariff review Base valuatin and calculatin f amrtizatin f existing fixed assets Amrtizatin perid Investment tand ratef return Recgnized wrking capital and rate f return n wrking capital Recgnized base-case distributin lsses with 7-year schedule f declining lsses Bucharest, February 4,

13 Rle f Regulatr (cntinued) 2. Licenses: Validity perid Cnditins Separatin f regulated and nn-regulated activities Infrmatin and reprting requirements Respnsibility: management bligatins Prcedure fr license cnditins amendment Suspensin and Withdrawal Exclusive distributin rights in the authrized territry Participatin in ther business activities Dispute reslutin Bucharest, February 4,

14 Rle f Regulatr (cnt-ed) 3. Investment plan: Investment tamunt, destinatin and purpse Prcedure fr amending the investment plan Investment depreciatin perid fr tariff recvery Rate f return n existing assets and n new investments recgnized in tariff Respnsibility fr failure t cmply with investment plan: penalties, sanctins, license impacts Additinal investments allwed in tariffs, subject t regulatry apprval Bucharest, February 4,

15 Rle f Regulatr (cntinued) 4. Other issues: Review and amendment f pwer market ktrules Allcatin methd fr transmissin lsses Main prvisins related t electricity supply and payments, cnsumer discnnectin (metering, billing and service rules) Cnsumer interests prtectin (Dispute Reslutin Prcedure) Open and nn-discriminatry netwrk access Netwrks extensin Bucharest, February 4,

16 Dnrs and technical assistance USAID WORLD BANK IMF EBRD Bucharest, February 4,

17 Main prblems, lessns learned Lack f experience by all participants Lack f knwledge n market ecnmy principles Cnflict f gals and purpse Plitical factrs: plitical changes, interference, prcess criticism External factrs: ecnmic crisis, imprt restrictins, fuel dependency and ther Natinal ecnmy status: stagnating ecnmy Dnr pressure: WB, EBRD, IMF Reneging f cntractual bligatins: Curt f Accunt, kv lines issue. Cnflict between ANRE authrity and Gvernment actins Bucharest, February 4,