Privatization of Electricity

Abstract

Privatization of electricity is one of the most important policy prescriptions suggested by the World Bank and the IMF. The rationale is that the public sector electricity generating and distribution companies are both inefficient and unviable. The only alternative is to invite private sector to produce and distribute electricity. In fact such is the strength of faith in the private sector that no new loans for energy development of the developing countries are granted by the World Bank unless they will be in the private sector. The IMF is also putting pressure on the borrowing countries by suggesting the sale of public sector electricity generating and distribution companies in order to reduce public budget deficit and subsidies (https://www.globalpolicy.org/).