15 jan ifc_aimm

AIMM
Anticipated Impact Measurement and Monitoring
OECD PF4SDG Week
PRIVATE FINANCE FOR
SUSTAINABLE DEVELOPMENT
January 15, 2019

What is the Anticipated Impact Measurement &
Monitoring (AIMM) System?
January 2019 3
• Approach to estimate and monitor expected development impact of
IFC interventions
• Toolkit to help structure systematic development impact assessments
along two dimensions: project and market outcomes
• Link to IFC 3.0 strategy and creating markets: analytical backbone

What is AIMM?
January 2019 4
Part of complete identification and assessment cycle- End to End system
Diagnostics /
CPSDs
Inform sector
focus, project
selection; identify
country priorities
Project Rating
System
Drives project
selection and
design ex-ante
Results
Measurement /
Monitoring
Identifies
achievements and
lessons learned
Evaluation
Promotes learning
and accountability
ex-post
Monitoring /
Feedback

Why AIMM?
January 2019 5
• Paradigm shift in global agenda → development finance = moving from
billions to trillions; need system in place: framework to rigorously assess
project’s development impact to ensure value for money
1. Intensify focus on Development Impact in IFC Operations
2. Improve IFC Interventions: Deepen ability to select and design projects
– rigorous economic analysis and strengthen feed back loops
3. Provide Key Analytics for IFC 3.0 Strategy
4. Effectively Implement a Portfolio Approach

Conceptual Framework
January 2019 6
IFC Projects
Investment (IS)
Advisory (AS)
IS & AS
AIMM considers two dimensions:
Project Outcomes
“Direct and Indirect impact linked to the project”
Contribution to Market Creation
“Catalyzed changes in the market beyond those linked
to the project”
How do private sector operations
generate development impact?
How will AIMM assess IFC development
impact?

AIMM Framework
The AIMM framework provides a structure to identify project’s
relevant impact components and indicators
January 2019 7
Project Outcomes
Contribution to
market creation
 Stakeholders impacts
 Economy-wide impacts
 Environmental and social impacts
 Competitiveness
 Resilience
 Integration
 Inclusiveness
 Sustainability
PROJECT
Channels for market creation
1. Enabling frameworks
2. Actions that promote competition
3. Demonstration and replication
4. Capacity building

AIMM Rating Process
January 2019 8
Project Outcomes
Establish
Potential
Risk-Adjusted
Project Score
Likelihood
Adjustment
Establish
Potential
Risk-Adjusted
Market Score
Likelihood
Adjustment
AIMM
Score
1. Reflect Project’s Development Impact
(DI) Thesis
 Identify Relevant Impact
Components and Indicators
2. Establish Project’s Potential
Development Impact
 Provide Evidence-Based Rationale
for Potential Impacts Ratings
based on gap and intensity
analyses using benchmarks
3. Incorporate Risk in the
Impact Assessment
 Provide Evidence-Based Rationale
for Potential Impacts Likelihood
4. Provide a Measure of Project’s
Overall Development Impact
 Translate Potential/Likelihood
Ratings into Numerical Scores

AIMM Scoring – Example
 Project rated “Strong” with “Medium” likelihood of achievement along project dimension
 Project rated “Moderate” with “High” likelihood of achievement along market dimension
 AIMM score is 50, or Satisfactory
1. Project score: Strong  Medium = 40  75% = 30
2. Market score: Moderate  High = 20  90% = 18
3. Project + Market: = 30 + 20 = 50
…each rounded to nearest multiple of 5
1. AIMM Rating: Satisfactory
January 2019 9
Potential
Scores
Likelihood
Adjustments
AIMM Score
Ranges
Very Strong 75
Strong 40
Moderate 20
Marginal 0
High 90%
Medium 75%
Low 60%
Excellent > 85
Good 51-85
Satisfactory 31-50
Low ≤ 30

AIMM Principles
January 2019 10
• AIMM assessments…reflect evidence-based judgments based on substantiation of the relative
size of development gaps and intensity, using available quantitative and qualitative indicators
• AIMM assessment is not an assessment of projects’ strategic soundness or alignment
• Starting point: Define clearly project’s Development Impact Thesis
• Focus on the most relevant impact components, and core sector outcomes
• Measure incremental effects, relative to a no-project counterfactual
• Take into consideration potential negative effects
• Consider the full scope of project impact irrespective of the size of IFC's contribution
• Identify and avoid double counting
• Avoid biases due to project size through scaling and normalization
• Promote IFC priorities on inclusion (BoP, women, rural populations and other under-served groups, FCS)
• Use carbon pricing for high emitting projects

AIMM Cross-Cutting Issues
January 2019 11
• Inclusion issues related to under-served groups
 Gender
 BoP
• Economy-wide effects
 Multipliers Estimation Framework (see next slide)
• Environmental effects
 Emissions and Emissions Reductions
• Fragile and Conflict States
 FCS Lens

Estimation of Economy-wide Impacts
January 2019 12
Value Added & Employment Multipliers to estimate Indirect & Induced Effects
Growth in
Sector A
Direct
Effects
Sector A
increases output
and employs
more workers
to do so
Indirect
Effects
Sectors B,C, D,…
as suppliers of
Sector A
increase output
and hire more
workers
Induced
Effects
Hired Workers
of All Sectors
increase consumption
(…and thus, demand
for ALL sectors)
…driven by
investment and
increased demand
 The Sector Economics (Modeling team)
developed a multipliers framework to
support investment teams in estimating
the economic impacts of their projects
 The framework includes multipliers for:
̶ MAS: about 50 sub-sectors across
100 IFC client countries
̶ INR: specific models for power
generation, ports, airports and roads
̶ FIG: specific models for general banking,
SME finance and trade finance (ongoing
work on climate and housing finance)
̶ CTT: recent development for telecom
and PE funds.

Operationalizing AIMM:
Detailed Sector Frameworks
January 2019 13

AIMM Sector Frameworks Development
January 2019 14
Manufacturing,
Agribusiness & Services
Financial
Intermediaries
Infrastructure and
Natural Resources
Telecom, Media, Tech
and Venture Investing
Agribusiness SME Finance Power Private Equity Funds
Manufacturing Microfinance Airports Venture Capital
Health Housing Finance Ports Towers
Education Climate Finance Roads Mobile Operators
Tourism Trade Finance Water and Waste Broadband
Retail Capital Markets Oil and Gas Satellite
Property Distressed Assets Mining Data Centers
Insurance
- IFC is developing detailed frameworks for 29 sectors
- Most are advanced working drafts with defined impact components and indicators
- Work on further data collection and refining benchmarks will continue going forward

1. AIMM Sector Frameworks
…provide a multi-dimensional structure
to appropriately assess projects in a
given sector with clear development
impact thesis
January 2019 15

AIMM Framework – Project Outcomes Dimension
January 2019 16
A Menu to Identify Relevant Impact Components
 Stakeholders Effects
… on customers: include impacts on accessibility, affordability, product/services diversity and quality
… on suppliers: purchases from local suppliers, suppliers technology and standards
… on employees: technical and business skills, fatalities
… on the local community: monetary and non-monetary impacts
… on the government: net fiscal benefits
 Economy-wide Effects
Value Added and Employment Multipliers: quantity and quality of jobs
External Impacts: foreign exchange effects on balance of payments
 Environmental & Social Effects
Emissions, carbon footprint
Hazardous waste

January 2019 17
Example – Power
PROJECT OUTCOMES
COMPONENTS AND SUB-COMPONENTS
STAKEHOLDERS IMPACTS
Impact on customers
Access impacts
Energy delivered to off-taker(s) during the reporting period (GWh)
New customers reached, #
Share of new users from underserved groups,%
Affordability impacts
Average cost of generation (US cents /kWh)
Average end user tariffs (US cents /kWh)
Quality impacts
Frequency of power outages measured as SAIFI - total number of customer interruptions / total number of customers served
Average length of power outages measured as SAIDI - sum of all customer interruption durations / total number of customers served
System losses including technical and commercial, % of output
Impact on suppliers
Goods and services sourced domestically (USD/year)
Impact on employees
Direct jobs created
Change in wages and other benefits (Local job quality) (ILOSTAT)
Improvement in employees' skills measured in terms of training outlays($) and number of employees who received training
Share of direct full-time women employed, (%)
Share of women in management positions, (%)
Number of fatal occupational injuries (#) (per million man hours)
Number of non-fatal occupational injuries (#) (per million man hours) (lost time incidence, severity rate)
Impact on the community
Infrastructure improvement in local community
Money spent by the client towards local communities (% of revenue spent)
Livelihoods
Jobs created in project area
Impact on the government
Net Payment to Government ($)
VALUE-ADDED, EMPLOYMENT, AND ECONOMIC RATE OF RETURN
Livelihoods
Value added multiplier
Employment multiplier
ENVIRONMENTAL IMPACTS
Efficacy of GHG reductions
GHG emission savings
Climate benefits from tailored solutions
Climate resilience of investment
Effects on biodiversity
Quality impacts
Frequency of power outages measured as SAIFI - total number of customer interruptions / total number of customers s
Average length of power outages measured as SAIDI - sum of all customer interruption durations / total number of cus
System losses including technical and commercial, % of output
Impact on suppliers
Goods and services sourced domestically (USD/year)
Impact on employees
Direct jobs created
Change in wages and other benefits (Local job quality) (ILOSTAT)
Improvement in employees' skills measured in terms of training outlays($) and number of employees who received tr
Share of direct full-time women employed, (%)
Livelihoods
Value added multiplier
Employment multiplier
Efficacy of GHG reductions
GHG emission savings
Climate benefits from tailored solutions
Climate resilience of investment
Effects on biodiversity

January 2019 18
Example – SME Financing
STAKEHOLDERS IMPACTS
Impact on customers (SMEs)
Change in Accessibility
Increase in volume of SME lending
Of which to underserved SMEs/groups **
Of which to priority sectors for economic development***
Increase in number of SMEs reached
Of which to underserved SMEs/groups**
Of which to priority sectors for economic development***
Introduce alternate delivery channels to reach SMEs (digital channels, agent banking)****
Change in Affordability
Change in loan terms available to SMEs
Lengthen loan maturities
More flexible collateral requirements
Improvement in loan application process (e.g. credit scoring systems, loan documentation)
Quality - Offering/expansion of financial and non-financial services for SMEs
Non-Financial Services (e.g. training, consulting)
Expanded financial services (beyond traditional loans e.g. factoring, insurance)
Impact on (FI) employees
Improve employees skills related to SME and other banking practices
Improve gender workforce participation and managerial/board representation
ECONOMY-WIDE IMPACTS
Impact on value-added
Impact on employment
Refer to Climate Finance framework for projects related to climate-smart SMEs

AIMM Framework – Contribution to Market Creation
January 2019 19
A Menu to Identify Relevant Catalyzed Impact Components
 Competitiveness
Market structure and functioning
 Integration
Within and across market connectivity and integration
 Inclusiveness
Market focus on under-served groups
 Resilience
Capacity to face shocks
 Sustainability
Environmental and Social

January 2019 20
Example – Power
COMPETITIVENESS (Market structure and functioning)
Impact on Market Structure
Impact through change in Product Offering and Innovation
Impact through Regulatory Changes and Prices
INTEGRATION (With external and other domestic sectors; incl. capital mobilization at scale)
Cross-Border and Domestic Links
Trade and Supply Chains
Financial Integration
RESILIENCE (Capacity to face shocks)
Diversification of Electricity Generation Mix
Cost-recovery
Resilience and quality of electricity supply (including availability and access to products and services to withstand
shocks/stresses, including climate change related)
Energy Sector Regulations and Reforms
INCLUSIVENESS (Market-wide focus and access for underserved groups, such as sme, women, others)
Inclusive Business Models Targeting Underserved Populations
SUSTAINABILITY (Environmental and social sustainability)
Sector specific sustainabilty impacts related to climate
Adoption of ESG sustainability practices by firms operating in the market
Conducive legal/regulatory environment for ESG
Broad-based capacity for supporting ESG practices (institutions)

January 2019 21
Example – SME Financing
COMPETITIVENESS (Market structure and functioning)
Market Structure
Change in concentration structure (overall market share, private market share) in SME financing market
Product Differentiation/Innovation
Change in product terms (pricing, maturities, collateral)
Improve efficiency of serving SMEs through product offerings and processes (e.g. loan processing, credit assessment, changes in systems, marketing, bank staff training etc.)
Introduction of alternative delivery channels (e.g. agent banking, online banking/fintech)
Change in offering of expanded financial products and services (e.g. leasing, factoring etc.), or non financial services (e.g. consulting, networking/access to market opportunities, knowledge sharing)
Market Regulation
Market-wide adoption and implementation of regulations related to functioning of SME credit markets (e.g. secured transaction laws, movable collateral registry, credit bureau, clearer/more secure legal rights to creditors)
INTEGRATION (With external and other domestic sectors; incl. capital mobilization at scale)
Financial Integration
Introduction of replicable instruments to raise funds for SME banking (e.g. B3T2 lending) and integration with local and international capital markets/investors (e.g. through SME loan securitization, local capital market development, SME board, capacity to provide swaps)
Promote data harmonization, standardization and dissemination
Spatial Integration
Improving FI reach including to remote borrowers via increased geographic presence of branches and/or use of technology (e.g. ATMs/branches or agent banking in rural areas)
Trade and Supply Chains
Integrating SMEs into domestic and/or global supply and/or value chains
RESILIENCE (Capacity to face shocks)
Market Financial Stability
Increase lending to sectors that help diversify the economy
Introduction and market-wide adoption of local currency lending
Decline in systemic asset quality risk (e.g. decrease in NPLs and/or LGDs)
Improve information, data availability and reporting on the SME sector
Adopt prudent banking risk management (e.g. employing asset-liability management avoiding currency/tenor mismatches and adequate capital cushion)
Market Regulation
Market-wide adoption and implementation of legal/regulatory frameworks relating to resilience of the SME finance market
INCLUSIVENESS (Market-wide focus and access for underserved groups)
Market-wide adoption of business models including product and/or processes to reach underserved SMEs/groups, and increase awareness of these groups
Market-enabling frameworks/standards supporting inclusive businesses/interactions with underserved SMEs/groups
SUSTAINABILITY (Environmental and social sustainability)
Refer to Climate Finance framework for projects related to climate-smart SMEs

…provide a systematic evidence-based
approach (Gap & Intensity measurements)
to assess development impact potential
January 2019 22

Rating Project Outcomes Potential using AIMM Sector Frameworks
January 2019 23
Project
Outcomes
…create 7,5000
permanent jobs
Strong?
…from impact claims …to evidence-based judgements
on impact extent and context

AIMM Sector Framework: Project Outcome Potential
January 2019 24
Evidence-based Gaps and Intensity – for each relevant impact component
Two fundamental questions to assess Development Impact Potential
1. What is the relative size of the development impact gap or challenge the project is
addressing?
In other words, are the resources being invested where they are needed the most across the
developing world?
2. What is the relative magnitude of the intensity with which the project will address
this gap?
In other words, what is the “value for money” of the resources being invested?

Project Outcome Potential – Development Gaps
January 2019 25
Example: SME Financing – Access
Indicator Source
SME Finance Gap (% of GDP) MSME FINANCE GAP DATABASE
% SMEs Credit Constrained ENTERPRISE SURVEY
% SMEs identifying financing as a major or severe obstacle ENTERPRISE SURVEY
Percent of firms with a bank loan/line of credit (%) ENTERPRISE SURVEY
SME Finance Supply (% of GDP) MSME FINANCE GAP DATABASE
Private Credit (% of GDP) WDI
SME Finance Gap (% current supply) MSME FINANCE GAP DATABASE
WSME Finance gap (% of GDP) MSME FINANCE GAP DATABASE
Difference between % financial access for men and women*** FINDEX
Difference between % borrowed to start, operate, or expand a farm
or business for men and women
FINDEX
Agri Finance gap ranking (IFC proxy)**** IFC CALCULATIONS
Mobile money account (% age 15+)
FINDEX
Small medium enterprise finance gap expressed as % of total SME financing supply
Small medium enterprise finance gap expressed as % of GDP
Percentage of SMEs that are credit constrained (partly+fully)
Percentage of SMEs that identify financing as a major or severe obstacle
Percentage of SMEs with a bank loan or line of credit
Domestic credit from banks as % of GDP
Diffference between the estimated existing supply of agricultural financing and a proxy for demand (Agri
value-added as % of GDP)
[Borrowed to start, operate, or expand a farm or business, male (% age 15+) minus Borrowed to start,
operate, or expand a farm or business, female (% age 15+)
SME current volume as % of GDP
Description
Percentage of population age 15 and above that has a mobile money account
Women-owned small medium enterprise finance gap expressed as % of GDP
Financial institution account,male(% age 15+) minus Financial institution account,female(% age 15+)

Project Outcome Potential – Development Gaps
January 2019 26
Example: SME Financing Gap
For each Quantitative Indicator (with sufficient data), benchmark groupings are
generated through a 2-step approach:
i. Define preliminary groupings through a statistical-based approach
ii. Adjust groupings as necessary in consultation with industry experts

Project Outcome Potential – Intensity Indicators
January 2019 27
Example: SME Financing – Access *
* Similar set of indicators are used for underserved SMEs/groups (Women-owned, Rural, etc) and priority sectors (when relevant)
Indicator
Volume of SME loans ($)
Number of SME loans (#)
Indicator Description: Outstanding portfolio of loans for financing SMEs (number of loans)
Indicator Calculation: Using baseline and target portfolio, project indicator measured as:
1.% 5-Year growth
2. 5-Year change expressed as % of total SMEs in the country
3. Change attributable to IFC's investment (per $1M IFC Investment)
Description
Indicator Description: Outstanding portfolio of loans for financing SMEs (in USD or equivalent)
Indicator Calculation: Using baseline and target portfolio, project indicator measured as:
1.% 5-Year growth *
4. 5-Year change expressed as % of SME financing in the country
3. % Change in SME share of client total loan portfolio (5-year)
4. 5-Year change per $1M IFC Investment*

Rating Project Outcomes Potential
January 2019 28
Project Outcomes Gap Intensity
low medium large
very
large
below
average
average
above
average
signif.
above
average
Increase access to finance to SMEs
…project impact #2
…project impact #3
Project Outcomes Potential Marginal Moderate Strong
Very
Strong
a) Use benchmarking to judge relative development gap and intensity
c) Generate final project outcomes judgement
b) Follow guidance to aggregate judgements
(incl. Core vs Non-Core outcomes)
Impact Intensity
Gap Addressed
Low Medium Large Very Large
Sign Above Avg Strong Strong Very Strong Very Strong
Above Average Moderate Strong Strong Very Strong
Average Moderate Moderate Strong Very Strong
Below Average Marginal Moderate Moderate Strong

AIMM Sector Frameworks Detailed Approach
January 2019 29
SME Financing Framework – Snapshot of Project Outcomes Dimension
Impact
Components
Access,
Affordability
...
Indicator
Definitions
Gap Indicators
Intensity Indicators
Benchmarks
Indicators Source

Rating Contribution to Market Creation Potential using AIMM
Sector Frameworks
January 2019 30
Contribution
to Market
Creation …increase integration
with through replication
of financial instrument
…foster resilience
through diversified
energy mix
Strong?
…from impact claims …to evidence-based judgements on
market stage and expected movement

AIMM Sector Framework - Contribution to Market Creation
Potential
January 2019 31
Evidence-based Market Development Gaps and Catalytic Movements
1. The development impact gap for market creation is defined by the current market
stage within a market typology
In other words, what’s the current state of the market in the country/region of interest
relevant to a specific market attribute?
2. The “intensity” in this case is assessed through the expected systemic change in the
market, with respect to a specific market attribute
In other words, what’s the expected movement of the market along the market typology
(typology captures both horizontal and vertical movements in a market)?

AIMM Framework Structure – Development Gaps
January 2019 32
Example: Power – Market Structure (within Competitiveness) Typology
Highly Underdeveloped Market Underdeveloped market Moderately developed market Highly developed market
The sector is dominated by a vertically integrated utility that
controls all lines of activity in the sector (generation, transmission,
distribution and supply/retail). The company is not sensitive to
customer needs and may lack incentives to improve service or
engage in technology innovation. The company is most likely 100%
state owned.
The government exercises direct regulatory and financial oversight
of the utility company. Sector suffers from poor accountability with
taxpayers bearing most investment risks. Different arms of the
government are engaged in forecasting, planning, building,
investing and operating as well as managing the sector and setting
& collecting retail tariffs.
Below data points used within the above sectoral context to determine
level of gap:
(1) Share of private generation output in total capacity is 0%.
Electricity market is undergoing market restructuring with attempts
to clarify and redefine roles of market players and market rules.
Market still has command and control method of planning and
managing the sector that results in inefficiencies due to inability to
capture complex interdependencies in the market. There is some
level of cost-based (but often politically influenced) tariffs.
The state-owned vertically integrated company is being
corporatized to legally and account separate from the government
and institute financial discipline. Very minimal IPP participation -
mainly in small scale renewable generation.
level of gap:
(1) Share of private companies in total capacity is less than 5%.
Electricity sector is being liberalized with introduction of
competition to some segments of the market (generation and
retail) to facilitate competitive entry and reduce
market power.
Vertical separation of competitive segments (generation, retail)
from regulated segments (distribution, transmission) achieved
either through structural (through divestiture) or functional (with
strong internal "Chinese walls" separating affiliates within the
same corporation).
Horizontal restructuring of the generation segment is ongoing to
create an adequate number of competing generators to mitigate
market power and to ensure wholesale market is able to achieve
competitive performance results. Barriers to market entry in
generation are being removed so that new entrants have no cost
disadvantages compared to the incumbent companies.
Transmission network is open and accessible to all under
transparent and non-discriminatory prices. The grid is managed by
an independent operator that maintains reliability, manages
transmission congestion, operates various markets to facilitate
trade, liquidity and risk management.
There is an independent system operator to direct the safe,
reliable, and economic operation of the interconnected electricity
system,
determine the order of dispatch, and make arrangements for
expanding and enhancing the transmission system.
IPPs participation in generation increasing. Several new generators
have entered the market in the last 2 years. State has privatized
some of the generation assets.
Electricity sector is fully liberalized with free entry in generation,
distribution, and supply/retail. Wholesale market exists with day-
ahead and intraday markets. Balancing market and ancillary
markets fully functional.
There are several companies competing in generation and
supply/retail. There is active IPP participation as much as
realistically possible taking into consideration country's market
size. There are no barriers to entry. State may control some
generation such as large hydro or nuclear assets.
level of gap:
(1) Share of private companies in total capacity is close to 60-70%.
The Typology is a description of the different stages of a market in a specific sector, supported by available quantitative and qualitative indicators

Rating Contribution to Market Creation Potential
January 2019 33
a) Use market typology to describe current market stage and potential movement
c) Generate final contribution to market creation judgement
b) Follow guidance to aggregate judgements
Contribution to Market Creation Current Market Stage
Highly
under-
developed
Under-
developed
Moderately
developed
Highly
developed
…increase competitiveness through…
…foster integration by…
Market
Movement
Current Market Stage
Highly developed
market
Moderately
developed market
Underdeveloped
market
Highly under-
developed market
Highly
Significant
Strong/Very
Strong*
Very Strong Very Strong Very Strong
Significant Moderate/Strong Strong Strong/Very
Strong
Very Strong
Meaningful Marginal/Modera
te
Moderate Moderate/Strong Strong
Marginal Marginal Marginal Marginal Marginal
Contribution to Market
Creation Potential
Marginal Moderate Strong
Very
Strong

Marginal Moderate
Stron
g
Very strong
A ma rgi n a l p ro je ct i s
o n e th a t tri gge rs …
A mo d e ra te p ro je ct i s o n e th a t
tri gge rs …
A
s tro n g
p ro je c
t i s
o n e
th a t
tri gge r
s …
A ve ry s tro n g p ro je ct i s o n e th a t tri gge rs …
Rating component Marginal Moderate Strong Very strong
COMPETITIVENESS Ch a n ge i n a n a re a wi th s tro n g ma rk e t co n d i ti o n s Ch a n ge i n a n a re a wi th a ve ra ge ma rk e t co n d i ti o n s Ab o ve a ve ra ge ch a n ge i n a n a re a wi th we a k ma rk e t co n d i ti o n s
S i gn i fi ca n tl y a b o ve a ve ra ge ch a n ge i n a n a re a wi th we a k ma rk e t
co n d i ti o n s
Market element Highly Underdeveloped Market Underdeveloped market Moderately developed market Highly developed market Market creation indicators Frequency of measurement
Impact on Market
Structure
Th e s e cto r i s d o mi n a te d b y a ve rti ca l l y i n te gra te d u ti l i ty th a t
co n tro l s a l l l i n e s o f a cti vi ty i n th e s e cto r (ge n e ra ti o n , tra n s mi s s i o n ,
d i s tri b u ti o n a n d s u p p l y/re ta i l ). Th e co mp a n y i s n o t s e n s i ti ve to
cu s to me r n e e d s a n d ma y l a ck i n ce n ti ve s to i mp ro ve s e rvi ce o r
e n ga ge i n te ch n o l o gy i n n o va ti o n . Th e co mp a n y i s mo s t l i k e l y 100%
s ta te o wn e d .
Th e go ve rn me n t e xe rci s e s d i re ct re gu l a to ry a n d fi n a n ci a l o ve rs i gh t
o f th e u ti l i ty co mp a n y. S e cto r s u ffe rs fro m p o o r a cco u n ta b i l i ty wi th
ta xp a ye rs b e a ri n g mo s t i n ve s tme n t ri s k s . D i ffe re n t a rms o f th e
go ve rn me n t a re e n ga ge d i n fo re ca s ti n g, p l a n n i n g, b u i l d i n g,
i n ve s ti n g a n d o p e ra ti n g a s we l l a s ma n a gi n g th e s e cto r a n d s e tti n g
& co l l e cti n g re ta i l ta ri ffs .
B elow data points used within the above sectoral context to determ ine
level of gap:
(1) S h a re o f p ri va te ge n e ra ti o n o u tp u t i n to ta l ca p a ci ty i s 0%.
El e ctri ci ty ma rk e t i s u n d e rgo i n g ma rk e t re s tru ctu ri n g wi th a tte mp ts
to cl a ri fy a n d re d e fi n e ro l e s o f ma rk e t p l a ye rs a n d ma rk e t ru l e s .
Ma rk e t s ti l l h a s co mma n d a n d co n tro l me th o d o f p l a n n i n g a n d
ma n a gi n g th e s e cto r th a t re s u l ts i n i n e ffi ci e n ci e s d u e to i n a b i l i ty to
ca p tu re co mp l e x i n te rd e p e n d e n ci e s i n th e ma rk e t. Th e re i s s o me
l e ve l o f co s t-b a s e d (b u t o fte n p o l i ti ca l l y i n fl u e n ce d ) ta ri ffs .
Th e s ta te -o wn e d ve rti ca l l y i n te gra te d co mp a n y i s b e i n g
co rp o ra ti ze d to l e ga l l y a n d a cco u n t s e p a ra te fro m th e go ve rn me n t
a n d i n s ti tu te fi n a n ci a l d i s ci p l i n e . Ve ry mi n i ma l I PP p a rti ci p a ti o n -
ma i n l y i n s ma l l s ca l e re n e wa b l e ge n e ra ti o n .
level of gap:
(1) S h a re o f p ri va te co mp a n i e s i n to ta l ca p a ci ty i s l e s s th a n 5%.
El e ctri ci ty s e cto r i s b e i n g l i b e ra l i ze d wi th i n tro d u cti o n o f
co mp e ti ti o n to s o me s e gme n ts o f th e ma rk e t (ge n e ra ti o n a n d
re ta i l ) to fa ci l i ta te co mp e ti ti ve e n try a n d re d u ce
ma rk e t p o we r.
Ve rti ca l s e p a ra ti o n o f co mp e ti ti ve s e gme n ts (ge n e ra ti o n , re ta i l )
fro m re gu l a te d s e gme n ts (d i s tri b u ti o n , tra n s mi s s i o n ) a ch i e ve d
e i th e r th ro u gh s tru ctu ra l (th ro u gh d i ve s ti tu re ) o r fu n cti o n a l (wi th
s tro n g i n te rn a l "Ch i n e s e wa l l s " s e p a ra ti n g a ffi l i a te s wi th i n th e
s a me co rp o ra ti o n ).
H o ri zo n ta l re s tru ctu ri n g o f th e ge n e ra ti o n s e gme n t i s o n go i n g to
cre a te a n a d e q u a te n u mb e r o f co mp e ti n g ge n e ra to rs to mi ti ga te
ma rk e t p o we r a n d to e n s u re wh o l e s a l e ma rk e t i s a b l e to a ch i e ve
co mp e ti ti ve p e rfo rma n ce re s u l ts . B a rri e rs to ma rk e t e n try i n
ge n e ra ti o n a re b e i n g re mo ve d s o th a t n e w e n tra n ts h a ve n o co s t
d i s a d va n ta ge s co mp a re d to th e i n cu mb e n t co mp a n i e s .
Tra n s mi s s i o n n e two rk i s o p e n a n d a cce s s i b l e to a l l u n d e r
tra n s p a re n t a n d n o n -d i s cri mi n a to ry p ri ce s . Th e gri d i s ma n a ge d b y
a n i n d e p e n d e n t o p e ra to r th a t ma i n ta i n s re l i a b i l i ty, ma n a ge s
tra n s mi s s i o n co n ge s ti o n , o p e ra te s va ri o u s ma rk e ts to fa ci l i ta te
tra d e , l i q u i d i ty a n d ri s k ma n a ge me n t.
Th e re i s a n i n d e p e n d e n t s ys te m o p e ra to r to d i re ct th e s a fe ,
re l i a b l e , a n d e co n o mi c o p e ra ti o n o f th e i n te rco n n e cte d e l e ctri ci ty
s ys te m,
d e te rmi n e th e o rd e r o f d i s p a tch , a n d ma k e a rra n ge me n ts fo r
e xp a n d i n g a n d e n h a n ci n g th e tra n s mi s s i o n s ys te m.
I PPs p a rti ci p a ti o n i n ge n e ra ti o n i n cre a s i n g. S e ve ra l n e w ge n e ra to rs
h a ve e n te re d th e ma rk e t i n th e l a s t 2 ye a rs . S ta te h a s p ri va ti ze d
s o me o f th e ge n e ra ti o n a s s e ts .
El e ctri ci ty s e cto r i s fu l l y l i b e ra l i ze d wi th fre e e n try i n ge n e ra ti o n ,
d i s tri b u ti o n , a n d s u p p l y/re ta i l . Wh o l e s a l e ma rk e t e xi s ts wi th d a y-
a h e a d a n d i n tra d a y ma rk e ts . B a l a n ci n g ma rk e t a n d a n ci l l a ry
ma rk e ts fu l l y fu n cti o n a l .
Th e re a re s e ve ra l co mp a n i e s co mp e ti n g i n ge n e ra ti o n a n d
s u p p l y/re ta i l . Th e re i s a cti ve I PP p a rti ci p a ti o n a s mu ch a s
re a l i s ti ca l l y p o s s i b l e ta k i n g i n to co n s i d e ra ti o n co u n try's ma rk e t
s i ze . Th e re a re n o b a rri e rs to e n try. S ta te ma y co n tro l s o me
ge n e ra ti o n s u ch a s l a rge h yd ro o r n u cl e a r a s s e ts .
level of gap:
(1) S h a re o f p ri va te co mp a n i e s i n to ta l ca p a ci ty i s cl o s e to 60-70%.
(1) Number of generation
companies
(2) Number of IPPs
(2) Share of private companies in
total capacity
3-5 Years Unless Otherwise
Specified by Project
Impact through change
in Product Offering and
Innovation
El e ctri ci ty ge n e ra ti o n i s ma d e u p a l l th e rma l p l a n ts wi th l o w-l e ve l
o f e ffi ci e n cy.
B elow data points used within the sectoral context to determ ine level of
gap:
R E s h a re i n ge n e ra ti o n mi x i s n e a rl y ze ro wh i l e th e co u n try h a s
e co n o mi ca l l y vi a b l e R E p o te n ti a l .
El e ctri ci ty ge n e ra ti o n h i gh l y u n d e ve l o p e d . Ma i n l y ma d e u p o f o l d
th e rma l p l a n ts wi th l o w-l e ve l o f e ffi ci e n cy. S i gn i fi ca n t n u mb e r o f
p l a n ts re a ch i n g e n d o f l i fe ti me s .
R e n e wa b l e e n e rgy ge n e ra ti o n h i gh l y u n d e ve l o p e d . Ma i n l y l a rge -
h yd ro typ e R E p ro je cts i f a n y.
gap:
No n -h yd ro R E s h a re i n ge n e ra ti o n i s mi n i ma l l e s s th a n 1%.
El e ctri ci ty ge n e ra ti o n s e cto r i n d e ve l o p me n t p h a s e wi th a fe w h i gh -
e ffi ci e n cy th e rma l p l a n ts a l re a d y o p e ra ti n g.
R e n e wa b l e e n e rgy ge n e ra ti o n i n d e ve l o p me n t p h a s e wi th s o me
wi n d , s o l a r, b i o ma s s , h yd ro , ge o th e rma l p ro je cts . Te ch n o l o gy u s e d
i s ge tti n g cl o s e r to B AT.
gap:
No n -h yd ro R E s h a re i n ge n e ra ti o n i s i n cre a s i n g a p p ro xi ma te l y
b e twe e n 1 a n d 5%.
El e ctri ci ty ge n e ra ti o n s e cto r we l l d e ve l o p e d , i n te rms o f te ch n o l o gy,
wi th mo s t p l a n ts B AT h i gh -e ffi ci e n cy.
R e n e wa b l e e n e rgy ge n e ra ti o n we l l d e ve l o p e d , s o me wi n d /s o l a r
p ro je cts ca n co mp e te wi th co n ve n ti o n a l ge n e ra ti o n .
gap:
R E s h a re i n ge n e ra ti o n mi x e xcl u d i n g h yd ro i s mo re th a n 5%.
(1) Number of companies adopting
new technologies
(2) Share of Wind, solar, biomass,
PV, geothermal in the generation
mix
Impact through
Regulatory Changes
and Prices
Li b e ra l i za ti o n o f th e s e cto r h a s n o t s ta rte d . Th e re i s n o cl e a r
re gu l a ti o n o f th e s e cto r. S ta te -o wn e d u ti l i ty i s n o t re gu l a te d b a s e d
o n p e rfo rma n ce i mp ro ve me n ts a n d ma y b e u s e d b y th e go ve rn me n t
a s p a rt o f th e p o l i ti ca l a ge n d a fo r p a tro n a ge e mp l o yme n t,
ma cro e co n o mi c a n d re d i s tri b u ti ve p o l i ci e s , to fa vo r d o me s ti c
s u p p l i e rs o f fu e l a n d e q u i p me n t a n d to fu n n e l re ve n u e to
go ve rn me n t b u d ge ts o u ts i d e o f th e ta x s ys te m.
Th e re i s n o a cco u n t u n b u n d l i n g b e twe e n th e ge n e ra ti o n a rm a n d
o th e r p a rts o f th e u ti l i ty.
Th e re i s n o cl e a r p a s s -th ro u gh me ch a n i s m o f wh o l e s a l e co s ts o f
ge n e ra ti o n to th e e n d -u s e r ta ri ff.
Th e re i s n o R E s u p p o rt me ch a n i s m.
R e gu l a ti o n o f th e s e cto r i s d e ve l o p i n g wi th th e s e cto r b e i n g
re gu l a te d b y a go ve rn me n t mi n i s try o r a n e n e rgy a ge n cy u n d e r th e
go ve rn a n ce o f a n En e rgy La w.
Th e e l e ctri ci ty ma rk e t i s ce n tra l l y ma n a ge d b y a s ys te m o p e ra to r
th a t p u rch a s e s e l e ctri ci ty th ro u gh l o n g te rm PPAs . Th e PPAs a re n o n -
tra n s p a re n t a n d ma n y a re n o t co mp e ti ti ve l y a wa rd e d .
R E s u p p o rt me ch a n i s m i s i n p l a ce (F i T/F i P/a u cti o n typ e ) a n d a fe w
p ro je cts h a ve s ta rte d o p e ra ti n g u n d e r th e s ys te m.
Th e ge n e ra ti o n s e cto r h a s b e e n p a rti a l l y l i b e ra l i ze d a n d s e ve ra l
I PPs a re co mp e ti n g i n th e ma rk e t. Th e ce n tra l i ze d s ys te m o p e ra to r's
p u rch a s e d e ci s i o n s ta k e i n to co n s i d e ra ti o n co mp e ti n g o ffe rs fro m
I PPs . A ma rk e t fo r b i l a te ra l co n tra cti n g b e twe e n I PPs a n d l a rge
i n d u s tri a l cu s to me rs i s s ta rti n g to fo rm.
Th e re i s go o d a p p l i ca ti o n o f re gu l a to ry ru l e s a n d s u p p o rti n g
n e two rk i n s ti tu ti o n s to p ro mo te e ffi ci e n t a cce s s to th e tra n s mi s s i o n
n e two rk b y wh o l e s a l e b u ye rs a n d s e l l e r i n cl u d i n g me ch a n i s ms to
e ffi ci e n tl y a l l o ca te s ca rce tra n s mi s s i o n ca p a ci ty.
Th e re ta i l ta ri ffs a re u n b u n d l e d to s e p a ra te p ri ce s fo r co mp e ti ti ve
re ta i l s u p p l y a cti vi ti e s fro m th e re gu l a te d n e two rk (tra n s mi s s i o n
a n d d i s tri b u ti o n ) ch a rge s . Cro s s -s u b s i d i e s fro m i n d u s tri a l
cu s to me rs to h o u s e h o l d s a re b e i n g gra d u a l l y re d u ce d a s p ri ce s fo r
h o u s e h o l d s a re re a l i gn e d wi th u n d e rl yi n g co s ts .
Li b e ra l i za ti o n o f th e d i s tri b u ti o n a n d s u p p l y/re ta i l i s a d va n ci n g,
wi th b a rri e rs to e n try b e i n g re mo ve d .
R E s u p p o rt me ch a n i s m i s i n p l a ce (F i T/F i P/a u cti o n typ e ) a n d
s u b s ta n ti a l n u mb e r o f p ro je cts h a ve a l re a d y b e e n o p e ra ti n g u n d e r
th e s ys te m.
F u l l y-l i b e ra l i ze d s e cto r wi th fre e e n try i n ge n e ra ti o n , d i s tri b u ti o n ,
a n d s u p p l y/re ta i l e n s u re d u n d e r a tra n s p a re n t re gu l a ti o n a n d
i mp l e me n te d th ro u gh a n i n d e p e n d e n t e n e rgy re gu l a to r.
Wh o l e s a l e ma rk e t e xi s ts wi th d a y-a h e a d a n d i n tra d a y ma rk e ts .
B a l a n ci n g ma rk e t a n d a n ci l l a ry ma rk e ts fu l l y fu n cti o n a l .
R e gu l a to ry ru l e s p ro mo te e ffi ci e n t
a cce s s to th e tra n s mi s s i o n n e two rk a n d p ro vi d e s i gn a l s fo r th e
e ffi ci e n t l o ca ti o n o f ge n e ra ti o n fa ci l i ti e s .
R E s e gme n t i s co mp e ti ti ve wi th s o me te ch n o l o gy s u ch a s wi n d /s o l a r
s e l l i n g o n d a y a h e a d o r i n tra d a y ma rk e ts . H yd ro ge n e ra to rs a cti ve l y
s e l l i n g o n b a l a n ci n g ma rk e t. Oth e r l e s s d e ve l o p e d te ch n o l o gy typ e s
ma y s ti l l re l y o n a s u p p o rt me ch a n i s m wh i ch i s co mp e ti ti ve (i .e .
a u cti o n s ).
(1) Market based tariff structures
adopted and Share of output sold on
day-ahead market and on balancing
market
(2) Number of IPPs contracted
through competitive mechanism e.g.
auctions
INTEGRATION Ch a n ge i n a n a re a wi th s tro n g ma rk e t co n d i ti o n s Ch a n ge i n a n a re a wi th a ve ra ge ma rk e t co n d i ti o n s Ab o ve a ve ra ge ch a n ge i n a n a re a wi th we a k ma rk e t co n d i ti o n s
co n d i ti o n s
Market element No market Underdeveloped market Moderately developed market Highly developed market Market creation indicators Frequency of measurement
Spatial Integration:
Trade & D omestic
Links
(1) Th e co u n try h a s n o i n te rco n n e cti o n ca p a ci ty wi th n e i gh b o ri n g
co u n tri e s . I f th e re i s i n te rco n n e cti o n ca p a ci ty i t i s o n l y u s e d i n ca s e
o f e xtre me e ve n ts o r i f u s e d e l e ctri ci ty i s tra d e d th ro u gh l o n g te rm
n o n -tra n s p a re n t PPAs . Th e co u n try d o e s n o t e xp o rt e l e ctri ci ty.
(2) Ma jo ri ty o f th e co u n try i s n o t co n n e cte d to th e e l e ctri ci ty n e two rk .
(1) Th e co u n try i s co n n e cte d to o n e n e i gh b o ri n g co u n try n e two rk
wi th wh i ch i t s p o ra d i ca l l y tra d e s .
(2) Co u n try h a s s i gn i fi ca n t n u mb e r o f a re a s th a t d o n o t h a ve
e l e ctri ci ty co ve ra ge wh e re d i s tri b u te d ge n e ra ti o n co u l d b e a
s o l u ti o n b u t h a s n o t b e e n p u rs u e d .
(1) Th e co u n try i s co n n e cte d to mo s t n e i gh b o ri n g n e two rk s wi th
a cti ve tra d i n g o ccu rri n g. A re gi o n a l e xch a n ge e s ta b l i s h e d o r
p a rti ci p a ti o n i n re gi o n a l a u cti o n o ffi ce .
(2) Th e re a re s o me p a rts o f th e co u n try n o t co n n e cte d to th e gri d
wh e re d i s tri b u te d ge n e ra ti o n co u l d b e a re a s o n a b l e s o l u ti o n a s i t
h a s b e e n p u rs u e d i n s o me p a rts o f th e co u n try.
(1) Th e co u n try i s co n n e cte d to a l l n e i gh b o ri n g n e two rk s a n d h a s
ma rk e t co u p l i n g.
(2) 100% e l e ctri ci ty co ve ra ge a ch i e ve d e i th e r th ro u gh d i re ct
co n n e cti o n to th e n e two rk o r th ro u gh d i s tri b u te d ge n e ra ti o n .
(1) Number of ex port partners
(2) Output trading mechanisms:
• Output traded through a regional
ex change
• Number of PPAs where the pricing
terms of the PPA are index ed to a
market price and transparently
reported
(3) D omestic integration:
• Number of people benefitting
from access to new/better energy
infrastructure
• Increase in electricity supply to an
isolated region that currently has no
or an unreliable supply of electricity
5 -10 Years Unless Otherwise
Impact on D omestic
supply chain
(Preparation &
D evelopment)
No l o ca l ca p a ci ty i n p ro je ct d e ve l o p me n t o r EPC co n tra cti n g fo r
p o we r ge n e ra ti o n p ro je cts .
Th e p o we r s e cto r i s ve rti ca l l y i n te gra te d a n d ch a ra cte ri ze d b y
l i mi te d l i n k a ge s to th e l o ca l e co n o my. Th e re i s l i mi te d l o ca l
ca p a ci ty i n p ro je ct d e ve l o p me n t o r EPC co n tra cti n g fo r p o we r
ge n e ra ti o n p ro je cts .
Th e p o we r s e cto r h a s s o me l i n k a ge s to th e d o me s ti c e co n o my
i n cl u d i n g a d e ve l o p e d b u t i n co mp l e te s u p p l y ch a i n a n d s o me l e ve l
o f l o ca l p ro je ct s p o n s o rs h i p a n d l i n k a ge s to l o ca l EPC co n tra cto rs i n
p o we r ge n e ra ti o n p ro je cts .
Po we r ge n e ra ti o n i s fu l l y i n te gra te d i n to th e d o me s ti c e co n o my,
wi th a we l l -d e ve l o p e d l o ca l s u p p l y ch a i n a s we l l a s l o ca l EPC
ca p a ci ty.
(1) Adoption or use of wholesale
approaches such as platform
companies to increase pool of
bankable projects in the local
market
(2) Number of local EPC contractors
in the power sector
F inancial Integration
Al l e n e rgy p ro je cts re l y o n s ta te fi n a n ci n g, s ta te b u d ge ta ry s u p p o rt
o r l o a n s fro m s ta te b a n k s .
No i n n o va ti ve fi n a n ci a l i n s tru me n ts to ma n a ge re l a te d ES G ri s k s o r
p ro mo te a d a p ta ti o n (i .e . i n s u ra n ce o r gre e n b o n d s ).
Mo s t e n e rgy p ro je cts re l y o n s ta te fi n a n ci n g, s ta te b u d ge ta ry
s u p p o rt o r l o a n s fro m s ta te b a n k s . Mi n i ma l l o a n s to co rp o ra te s a re
a va i l a b l e fro m p ri va te b a n k s o r o th e r i n te rme d i a ry i n ve s to rs .
Pro je ct fi n a n ci n g i s a va i l a b l e b y co mme rci a l b a n k s a n d e n e rgy
p ro je cts p ri ma ri l y re l y o n b a n k l e n d i n g. H o we ve r, i n s ti tu ti o n a l
i n ve s to rs h a ve l i mi te d o r n o a cce s s to p ro je ct fi n a n ce . Th e re i s a
n a s ce n t b o n d ma rk e t wi th s o me co rp o ra te s fi n a n ci n g th ro u gh
i s s u a n ce o f b o n d s b u t s ti l l l i mi te d s ca l e .
En e rgy p ro je cts fi n a n ce d th ro u gh a mi x o f fi n a n ci n g i n s tru me n ts a n d
i n ve s to rs .
Pe n s i o n fu n d s a n d o th e r i n s ti tu ti o n a l i n ve s to rs a re a cti ve .
F i n a n ci n g i n s tru me n ts fo r e n e rgy p ro je cts s u ch a s co rp o ra te b o n d s ,
gre e n b o n d s , a n d co mme rci a l l o a n s a re e a s i l y u ti l i ze d a n d
re co gn i ze d i n th e ma rk e t.
S to ck ma rk e t i s l i q u i d .
Replication of financial structure in
the local capital market, Yes/No.
D ocument.
RESILIENCE Ch a n ge i n a n a re a wi th s tro n g ma rk e t co n d i ti o n s Ch a n ge i n a n a re a wi th a ve ra ge ma rk e t co n d i ti o n s Ab o ve a ve ra ge ch a n ge i n a n a re a wi th we a k ma rk e t co n d i ti o n s
co n d i ti o n s
D iversification of
Electricity Generation
Mix
El e ctri ci ty ge n e ra ti o n i s a l mo s t fu l l y d o mi n a te d (mo re th a n 90%
b a s e l o a d ) b y o n e ge n e ra ti o n s o u rce (e .g. co a l , l a rge h yd ro ) th a t i s
s u s ce p ti b l e to s u p p l y ri s k s (e .g. h yd ro l o gy, cl i ma te ri s k , fu e l s o u rce
ri s k ).
El e ctri ci ty ge n e ra ti o n mi x d o mi n a te d b y o n e o r two s o u rce s o f
e n e rgy (s h a re o f th e l a rge s t ge n e ra ti o n typ e i s mo re th a n 40%) th a t
h a ve s u p p l y ri s k s . S e cto r ma y b e e xp o s e d to s i gn i fi ca n t ri s k s o r
p o te n ti a l s h o ck s i n i ts e l e ctri ci ty ge n e ra ti o n wi th n o s tra te gy o r
a wa re n e s s o n h o w to ma n a ge th e s e ri s k s . Th e e l e ctri ci ty s yte m i s
vu l n e ra b l e to cl i ma te ch a n ge .
El e ctri ci ty ge n e ra ti o n i s b e i n g d i ve rs i fi e d . Th e s h a re o f th e l a rge s t
ge n e ra ti o n s o u rce i s l e s s th a n 40%. S e cto r ma y b e e xp o s e d to s o me
ri s k s o r p o te n ti a l s h o ck s i n i ts e l e ctri ci ty ge n e ra ti o n . I t h a s s ta rte d
to d e ve l o p & i mp l e me n t a s tra te gy to a d d re s s th e s e ri s k s . Th e
e l e ctri ci ty s ys te m i s l a rge l y re s i l i e n t to cl i ma te s h o ck s a n d s tre s s e s
Th e e l e ctri ci ty ge n e ra ti o n i s we l l d i ve rs i fi e d wi th a mi x o f
ge n e ra ti o n typ e s a n d fu e l s (i n cl u d i n g R E a n d i mp o rts ). Th e s h a re o f
th e l a rge s t ge n e ra ti o n typ e i s l e s s th a n 30%. Co u n try ma y b e
e xp o s e d to s o me ri s k s o r p o te n ti a l s h o ck s i n i ts e l e ctri ci ty
ge n e ra ti o n . B u t th e co u n try h a s go o d a wa re n e s s o f th e s e ri s k s wi th
cl e a r s tra te gy to mi ti ga te th e m. El e ctri ci ty s ys te m i s o ve ra l l re s i l i e n t
to cl i ma te s h o ck s a n d s tre s s e s .
(1) Reduction in share of the
dominant generation source
(2) Level of climate vulnerability in
the mix (energy generation mix ,
transport, financial sources, water
sources)
(3) Share of RE in electricity
generation
(4) Share of imported electricity
Cost-recovery
(1) Th e s e cto r fu l l y re l i a n t o n go ve rn me n t s u b s i d i e s . En d -u s e r ta ri ffs
co mp l e te l y d e ta ch e d fro m s ys te m co s ts .
(2) Th e re a re n o PPA s tru ctu re s .
(1) Th e co s t o f ge n e ra ti o n i s h i gh d u e to u s a ge o f re n ta l u n i ts o r l o w-
e ffi ci e n cy h i gh co s t p l a n ts . Th e s e cto r h e a vi l y re l i a n t o n go ve rn me n t
s u b s i d i e s to a l l e vi a te th e s e co s ts i n th e s ys te m th a t a re n o t
re co ve re d th ro u gh th e ta ri ff.
(2) PPAs a re n o t b a n k a b l e . No n -cre d i t wo rth y o ff-ta k e rs . G e n e ra to rs
h a ve d i ffi cu l ty re ce i vi n g p a yme n t fro m o ff-ta k e rs wi th h i gh l e ve l o f
a rre a rs .
(1) Th e co s t o f ge n e ra ti o n i s re a s o n a b l e wi th s o me h i gh -co s t l o w
e ffi ci e n cy p l a n ts ru n n i n g o cca s i o n a l l y to me e t s e a s o n a l p e a k
d e ma n d . Th e l e ve l o f s u b s i d y i n th e s e cto r h a s b e e n d e cre a s i n g b u t
s o me s u b s i d i e s re ma i n to o ffs e t th e co s t o f th e e xp e n s i ve
i n e ffi ci e n t p l a n ts . No re n ta l H F O u s e d .
(2) I mp ro ve d b a n k a b l e PPA s tru ctu re s a re i n p l a ce . Off-ta k e rs a re
o ve ra l l cre d i t-wo rth y wi th go o d h i s to ri c p a yme n t d i s ci p l i n e .
B
(1) F u l l co s t re co ve ry i s i n p l a ce wi th ge n e ra ti o n co s ts fu l l y
re co ve re d . No re l i a n ce o n go ve rn me n t s u b s i d i e s .
(2) PPAs a re fu l l y b a n k a b l e . Off-ta k e rs a re cre d i t-wo rth y. No i s s u e s
wi th p a yme n t o r l a te p a yme n t to ge n e ra to rs .
(1) State budget allocated to
subsidizing energy sector and/or
sole off-taker
(2) Number of bankable PPA
structures adopted in sector
Resilience and quality
of electricity supply
(including availability
and access to products
and services to
withstand
shocks/stresses,
including climate
change related)
Un a va i l a b i l i ty o f p ro d u cts a n d s e rvi ce s (i n cl u d i n g fi n a n ci a l
i n s tru me n ts ) a n d i n a d e q u a te co ve ra ge to s o l ve cl i ma te
vu l n e ra b i l i ti e s . Th e co u n try e xp e ri e n ce s h i gl y fre q u e n t p o we r
o u ta ge s [i n d i ca ti ve b e n ch ma rk : > 13 o u ta ge s p e r mo n th ].
G e n e ra ti o n p l a n ts s u s ce p ti b l e to h i gh cl i ma te ch a n ge ri s k s . F i rms
d o n o t i n co rp o ra te re s i l i e n ce co n s i d e ra ti o n s , (e .g. cl i ma te
i n fo rma ti o n re l e va n t fo r th e i r o p e ra ti o n s a n d re s i l i e n ce me a s u re s ,
i n th e i r b u s i n e s s p l a n n i n g a n d o p e ra ti o n s ).
S e cto r h a s e xte n s i ve b a s e l o a d ca p a ci ty s h o rta ge . El e ctri ci ty
d i s ru p ti o n s o ccu r re gu l a rl y d u e to s h o rta ge i n ge n e ra ti o n ca p a ci ty.
Th e co u n try e xp e ri e n ce s fre q u e n t p o we r o u ta ge s [i n d i ca ti ve
b e n ch ma rk : b e twe e n 6 a n d 13 o u ta ge s p e r mo n th ]. Co u n try h a s to
i mp o rt e xp e n s i ve e l e ctri ci ty to ma k e u p th e s u p p l y s h o rtfa l l ,
s o me ti me s th i s i s i n s u ffi ci e n t re s u l ti n g i n ro l l i n g b l a ck o u ts . Th e
i mp o rts p l a ce h e a vy b u rd e n o n s ta te b u d ge t a n d /o r co n s u me r
ta ri ffs .
G e n e ra ti o n p l a n ts s u s ce p ti b l e to h i gh cl i ma te ch a n ge ri s k s wi th
l i mi te d co n s i d e ra ti o n ta k e n to th e s e ri s k s i n d e s i gn i n g n e w
p ro je cts .
Th e re i s s o me s h o rta ge i n ca p a ci ty, co u n try ma y n e e d to i mp o rt
e l e ctri ci ty a t mu ch h i gh e r co s t d u ri n g s o me p e a k h o u rs /s e a s o n s .
Occa s i o n a l o ccu rre n ce o f b l a ck o u ts /s e rvi ce d i s ru p ti o n s d u e to
ca p a ci ty s h o rta ge u n a b l e to me e t e n e rgy d e ma n d d u ri n g p e a k h o u rs
o r s e a s o n s . [i n d i ca ti ve b e n ch ma rk : b e twe e n 2 to 6 p e r o u ta ge s
mo n th ]
G e n e ra ti o n p l a n ts s u s ce p ti b l e to cl i ma te ch a n ge ri s k s wh i ch a re
b e i n g i n co rp o ra te d i n to n e w p ro je ct d e s i gn s o r re h a b i l i ta ti o n o f
e xi s ti n g ge n e ra ti o n p l a n ts .
Th e re a re n o ca p a ci ty s h o rta ge s . An y p e a k d e ma n d /s u p p l y
d i s cre p a n ci e s a re e ffi ci e n tl y h a n d l e d wi th o u t u n p l a n n e d
d i s ru p ti o n s to s u p p l y th ro u gh va ri e ty o f o p ti o n s i n cl u d i n g:
re wa rd i n g p e a k ca p a ci ty th ro u gh a ca p a ci ty ma rk e t; a cti ve d e ma n d -
re s p o n s e b y co n s u me rs ; re ta i l ta ri ffs th a t e n co u ra ge d e ma n d -
re s p o n s e ; re a s o n a b l e s to ra ge a va i l a b l e (i .e . p u mp e d h yd ro ).
[i n d i ca ti ve b e n ch ma rk : < 2 o u ta ge s p e r mo n th ]
S ta k e h o l d e rs h a ve go o d a wa re n e s s o f p o te n ti a l cl i ma te ch a n ge
ri s k s to ge n e ra ti o n . Th e s e co n s i d e ra ti o n s a re re gu l a rl y i n co rp o ra te d
i n to p ro je ct d e s i gn .
Reduction in number and duration of
electricity outages beyond the
project
Number of services, coverage and
penetration of products, and
services compared to resilience
needs
(e.g. engineering, information,
construction, structures (barriers),
tools, monitoring equipment,
emergency warning system of
conflict, financial products)
# of firms adopting resilience
measures
Energy Sector
Regulations and
Reforms
(1) No En e rgy La w i s p re s e n t.
(2) Th e re i s n o cl e a r mi n i s try re s p o n s i b l e fo r re gu l a ti o n o f th e
s e cto r.
(3) No vo l u n ta ry o r co mp u l s o ry s ta n d a rd s e xi s t to mi ti ga te p o te n ti a l
s h o ck s i n cl u d i n g cl i ma te ri s k s . No co n d u ci ve l e ga l /re gu l a to ry
e n vi ro n me n t fra me wo rk to s u p p o rt re s i l i e n ce , i n cl u d i n g cl i ma te
ch a n ge re l a te d .
(1) An En e rgy l a w e xi s ts b u t i t i s i n a d e q u a te to s u p p o rt a fu l l -s ca l e
re s tru ctu ri n g o f th e s e cto r, i n cl u d i n g ve rti ca l u n b u n d l i n g th ro u gh
a cco u n t s e p a ra ti o n a n d s e t-u p o f a re gu l a to r.
(2) Th e re i s n o e n e rgy re gu l a to r. A go ve rn me n t mi n i s try re gu l a te s
th e s e cto r.
(3) No vo l u n ta ry o r co mp u l s o ry s ta n d a rd s e xi s t to mi ti ga te p o te n ti a l
s h o ck s i n cl u d i n g cl i ma te ri s k s b u t th e re i s s o me u s a ge o f
i n te rn a ti o n a l b e s t p ra cti ce s b y i n d i vi d u a l fi rms . No co n d u ci ve
l e ga l /re gu l a to ry e n vi ro n me n t fra me wo rk to s u p p o rt re s i l i e n ce ,
i n cl u d i n g cl i ma te ch a n ge re l a te d .
(1) An En e rgy l a w e xi s ts b u t h a s s o me ga p s e .g. i t i s mi s s i n g
go ve rn a n ce o f wh o l e s a l e ma rk e t, i n te rco n n e cto rs , s wi tch i n g o f
s u p p l i e rs .
(2) An e n e rgy re gu l a to r i s i n p l a ce a n d i t i s mo s tl y i n d e p e n d e n t.
Mo s t e l e me n ts o f i n s ti tu ti o n a l , fi n a n ci a l , ma n a ge ri a l , a n d d e ci s i o n
ma k i n g i n d e p e n d e n ce a re p re s e n t. Th e re gu l a to r ma y h a ve s o me
s ta ff ca p a ci ty s h o rta ge s .
(3) S o me vo l u n ta ry o r co mp u l s o ry s ta n d a rd s e xi s t to mi ti ga te
p o te n ti a l s h o ck s i n cl u d i n g cl i ma te ri s k s , b u t e n fo rce me n t ma y b e
l i mi te d .
(1) An En e rgy La w i s e n fo rce d wh i ch p ro vi d e s th e a d e q u a te l e ga l
fra me wo rk to s u p p o rt a fu l l -s ca l e re s tru ctu ri n g o f th e s e cto r,
i n cl u d i n g ve rti ca l u n b u n d l i n g th ro u gh a cco u n t s e p a ra ti o n a n d s e t-
u p o f a re gu l a to r.
(2) A fu l l y i n d e p e n d e n t e n e rgy re gu l a to r i s i n p l a ce ch a ra cte ri ze d b y
h i gh s ta n d a rd s o f a cco u n ta b i l i ty a n d tra n s p a re n cy. Th e re gu l a to r
h a s th e te ch n i ca l a b i l i ty to s e t ta ri ffs , a n d th i rd p a rty a cce s s ch a rge s
a n d s u p p o rt co mp e ti ti o n . Th e re gu l a to r h a s i n s ti tu ti o n a l , fi n a n ci a l ,
ma n a ge ri a l , a n d d e ci s i o n ma k i n g i n d e p e n d e n ce . Th e re gu l a to r h a s
s u ffi ci e n t s ta ff a n d ca p a ci ty to ca rry o u t i ts ta s k s .
(3) Cl i ma te re s i l i e n ce i n cl u d e d i n th e l e ga l / re gu l a to ry fra me wo rk
a n d a cti ve l y e n fo rce d th ro u gh ca p a b l e i n s ti tu ti o n .
(1) Adoption of Energy Law: Yes or
no
(2) Enhancement in capacity and
skills of the energy regulator to
implement energy regulation
(D ocument)
(3) Inclusion of relevant resilience
measures in codes, Laws, Standards,
and/or Regulatory framework
(comparison vis-à-vis IF C's
recommendations in “Enabling
Environment for Private Sector
Adaptation”)
INCLUSIVENESS Ch a n ge i n a n a re a wi th s tro n g ma rk e t co n d i ti o n s Ch a n ge i n a n a re a wi th a ve ra ge ma rk e t co n d i ti o n s Ab o ve a ve ra ge ch a n ge i n a n a re a wi th we a k ma rk e t co n d i ti o n s
co n d i ti o n s
Inclusive Business
Models Targeting
Underserved
Populations
Ma jo ri ty o f th e u n d e rs e rve d p o p u l a ti o n s d o n o t h a ve e l e ctri ci ty
co ve ra ge . El e ctri fi ca ti o n ra te s e xtre me l y l o w fo r ru ra l a n d
u n d e rs e rve d re gi o n s wi th wi d e d i s p a ri ti e s co mp a re d to re s t o f th e
co u n try.
B u s i n e s s ca s e fo r i n cl u s i ve b u s i n e s s p ra cti ce s n o t ma d e a n d fi rms
d o n o t i n co rp o ra te i n cl u s i ve n e s s co n s i d e ra ti o n s i n th e i r
o p e ra ti o n s .
gap:
R u ra l e l e ctri fi ca ti o n ra te i s b e l o w 20%.
Co u n try h a s s i gn i fi ca n t n u mb e r o f a re a s wi th u n d e rs e rve d
p o p u l a ti o n s th a t d o n o t h a ve e l e ctri ci ty co ve ra ge wh e re d i s tri b u te d
ge n e ra ti o n co u l d b e a s o l u ti o n b u t h a s n o t b e e n p u rs u e d .
El e ctri fi ca ti o n ra te s a re l o w a n d th e re i s a re s i gn i fi ca n t ma rk e t-
wi d e d i s p a ri ti e s i n e l e ctri ci ty a cce s s wi th i n co u n try (ru ra l ve rs u s
u rb a n ; l o w ve rs u s mi d d l e /h i gh i n co me ; re gi o n a l ).
Th e co s t o f e l e ctri ci ty i s co n s i d e re d h i gh a n d re s tri cti ve fo r gri d
co n n e cte d l o w i n co me u s e rs ; o ff-gri d s o l u ti o n s a re u n a ffo rd a b l e fo r
u n d e rs e rve d gro u p s .
gap:
R u ra l e l e ctri fi ca ti o n ra te i s b e twe e n 20% a n d 75%.
Th e re a re s o me p a rts o f th e co u n try wi th B o P p o p u l a ti o n s n o t
co n n e cte d to th e gri d wh e re d i s tri b u te d ge n e ra ti o n co u l d b e a
re a s o n a b l e s o l u ti o n a s i t h a s b e e n p u rs u e d i n s o me p a rts o f th e
co u n try.
El e ctri fi ca ti o n ra te s a re h i gh ; b u t th e re a re i s o l a te d o r l o ca ti o n
s p e ci fi c ga p s i n e l e ctri ci ty a cce s s wi th i n co u n try (u n d e rs e rve d a re a s
a re re mo te , ca n n o t b e s e rve d co s t-e ffe cti ve l y th ro u gh gri d
e xte n s i o n , a re l o ca te d i n a fra gi l e p a rt o f co u n try)
Th e co s t o f e l e ctri ci ty d e cre a s i n g wi th i mp ro ve d a ffo rd a b i l i ty fo r
l o we r i n co me gro u p s . Ta ri ff s tru ctu re s to i mp ro ve a ffo rd a b i l i ty fo r
l o we r i n co me h o u s e h o l d s (e .g. p re -p a yme n t me te rs , b l o ck ta ri ffs )
b e i n g u ti l i ze d .
gap:
R u ra l e l e ctri fi ca ti o n ra te i s b e twe e n 75% a n d 97%.
100% e l e ctri ci ty co ve ra ge a ch i e ve d fo r a l l p o p u l a ti o n i n cl u d i n g B o P
e i th e r th ro u gh d i re ct co n n e cti o n to th e n e two rk o r th ro u gh
d i s tri b u te d ge n e ra ti o n .
Affo rd a b l e (p o te n ti a l l y s u b s i d i ze d ) o ff-gri d s o l u ti o n s a re a va i l a b l e
ta rge ti n g l o w-i n co me gro u p s . Ne w re gu l a ti o n p ro mo ti n g
a cce s s /a ffo rd a b i l i ty fo r u n d e rs e rve d gro u p s a re a va i l a b l e .
gap:
R u ra l e l e ctri fi ca ti o n ra te i s mo re th a n 97%.
(1) Number of companies with
inclusive business models
(2) Electrification Rate of BoP
populations
(3) Share of output provided through
distributed generation
SUSTAINABILITY Ch a n ge i n a n a re a wi th s tro n g ma rk e t co n d i ti o n s Ch a n ge i n a n a re a wi th a ve ra ge ma rk e t co n d i ti o n s Ab o ve a ve ra ge ch a n ge i n a n a re a wi th we a k ma rk e t co n d i ti o n s
co n d i ti o n s
Sector specific
sustainabilty impacts
related to climate
Co u n try i n th e to p 20 i n te rms o f h i gh e n e rgy i n te n s i ty. El e ctri ci ty
s e cto r h a s s i gn i fi ca n t CO2 e mi s s i o n s d u e to d o mi n a n ce o f th e rma l
ge n e ra ti o n wi th l i mi te d o r n o R E ge n e ra ti o n . Co u n try’s e l e ctri ci ty
a s s e ts h a ve h i gh wa te r u s a ge i n e ffi ci e n ci e s e s p e ci a l l y i f co u n try i s
wa te r s tre s s e d . Co u n try’s e l e ctri ci ty s e cto r h a s th e h i gh e s t CO2
e mi s s i o n s .
El e ctri ci ty s e cto r h a s s i gn i fi ca n t s co p e to i mp ro ve e n e rgy e ffi ci e n cy
b u t n o i n ve s tme n ts a re b e i n g ma d e to i mp ro ve e ffi ci e n cy o f p l a n ts .
level of gap:
(1) Co u n try's CO2 e mi s s i o n s a cco u n ti n g fo r mo re th a n 6 me tri c to n s
p e r ca p i ta .
Co u n try h a s h i gh e n e rgy i n te n s i ty. El e ctri ci ty s e cto r h a s s i gn i fi ca n t
CO2 e mi s s i o n s (ma jo ri ty co mi n g fro m co a l o r d i e s e l ge n e ra ti o n )
wh e re th e re i s a ro l e fo r R E s o u rce s to b e d e ve l o p e d to re d u ce
ca rb o n fo o tp ri n t o f th e e l e ctri ci ty s e cto r. S o me R E p ro je ct s ta rti n g to
b e d e ve l o p e d b u t th e re i s l a rge ga p b e twe e n cu rre n t R E l e ve l s a n d
th e co u n try's n a ti o n a l ta rge t. Co u n try’s e l e ctri ci ty s e cto r h a s h i gh
CO2 e mi s s i o n s .
El e ctri ci ty ge n e ra ti o n te ch n o l o gy a n d e n vi ro n me n ta l ma n a ge me n t
p ra cti ce s o f e xi s ti n g ge n e ra to rs s i gn i fi ca n tl y b e h i n d b e s t p ra cti ce .
El e ctri ci ty s e cto r h a s s i gn i fi ca n t s co p e to i mp ro ve e n e rgy e ffi ci e n cy
wi th s o me s ma l l s ca l e i n ve s tme n ts b e i n g ma d e to i mp ro ve
e ffi ci e n cy o f p l a n ts .
level of gap:
(1) Co u n try's CO2 e mi s s i o n s a cco u n ti n g fo r b e twe e n 2.5 a n d 6 me tri c
to n s p e r ca p i ta .
Co u n try h a s d e cre a s i n g e n e rgy i n te n s i ty. El e ctri ci ty s e cto r i s
re d u ci n g ca rb o n fo o tp ri n t wi th re n e wa b l e e n e rgy a s s e ts b e i n g
d e ve l o p e d . Co u n try’s e l e ctri ci ty s e cto r h a s mo d e ra te CO2 e mi s s i o n s .
S i gn i fi ca n t i n ve s tme n ts a n d re gu l a ti o n o ccu ri n g i n th e e l e ctri ci ty
s e cto r to i mp ro ve e n e rgy e ffi ci e n cy.
level of gap:
(1) Co u n try's CO2 e mi s s i o n s a cco u n ti n g fo r b e twe e n 1 a n d 2.4 me tri c
to n s p e r ca p i ta .
Co u n try h a s l o w l e ve l o f G H G e mi s s i o n s . El e ctri ci ty s e cto r i s ma jo ri ty
n o t ca rb o n e mi tti n g wi th mi x o f R E, n u cl e a r a n d CCS . Me tri c to n s o f
CO2 e mi s s i o n s a re l e s s th a n 1 me tri c to n s p e r ca p i ta .
Li mi te d s co p e fo r e n e rgy e ffi ci e n cy i mp ro ve me n t i n th e e l e ctri ci ty
s e cto r.
level of gap:
(1) Co u n try's CO2 e mi s s i o n s a cco u n ti n g fo r l e s s th a n 1 me tri c to n s
p e r ca p i ta .
• Reduction in electricity sector CO2
emissions
• Reduction in electricity sector
energy intensity
• Introduction of innovative climate
mitigation or adaptation measures
Adoption of ESG
sustainability practices
by firms operating in
the market
No a d o p ti o n o f ES G s ta n d a rd s i n th e ma rk e t.
Li mi te d u n d e rs ta n d i n g o f th e b u s i n e s s ca s e fo r s u s ta i n a b l e a n d
tra n s p a re n t b u s i n e s s p ra cti ce s .
No u n d e rs ta n d i n g o f co l l e cti ve ri s k s a n d o p p o rtu n i ti e s to ma n a ge
n a tu ra l a n d s o ci a l re s o u rce s a cro s s p a rtn e rs .
Li mi te d u p ta k e o f ES G p ra cti ce s s i n th e ma rk e t (o n l y b y to p fi rms i n
th e ma rk e t). Ma jo ri ty o f fi rms d o n o t h a ve ES MS , a n d ma jo ri ty h a ve
we a k go ve rn a n ce s ys te ms (b e l o w l e ve l 1 o n CG /ES G ma tri x).
A fe w l a rge fi rms u n d e rs ta n d th e b u s i n e s s ca s e fo r s u s ta i n a b i l i ty
a n d tra n s p a re n cy
F e w fi rms u n d e rs ta n d co l l e cti ve ri s k s a n d o p p o rtu n i ti e s to ma n a ge
n a tu ra l a n d s o ci a l re s o u rce s a cro s s p a rtn e rs
La rge r fi rms s h a ve a d o p te d s o me ES G s ta n d a rd s a n d p ra cti ce s (e .g
h a ve ES MS a n d s ta ff o n b o a rd );
La rge r fi rms h a ve d e ve l o p i n g go ve rn a n ce s ys te ms (l e ve l 2 o n ES G
p ro gre s s i o n ma tri x)
La rge r fi rms i n th e i n d u s try u n d e rs ta n d th e b u s i n e s s ca s e fo r
s u s ta i n a b l e / tra n s p a re n t b u s i n e s s p ra cti ce s a ve ra ge
Th e to p fi rms u n d e rs ta n d co l l e cti ve ri s k s a n d o p p o rtu n i ti e s to
ma n a ge n a tu ra l a n d s o ci a l re s o u rce s a cro s s p a rtn e rs
ES G s ta n d a rd s a n d p ra cti ce s a d o p te d b y ma jo ri ty o f fi rms a n d
d e ci s i o n ma k i n g e ffe cti ve o n a l l l e ve l s o f th e fi rm, i n cl u d i n g
d i s cl o s u re
S i gn i fi ca n t n u mb e r o f fi rms h a ve ro b u s t go ve rn a n ce s ys te m (l e ve l 4
o n ES G p ro gre s s i o n ma tri x)
Le a d e rs i n th e ma rk e t u s e i n n o va ti ve a p p ro a ch e s s u ch a s n a tu ra l
ca p i ta l a n d b ro a d e r co n te xtu a l ri s k s a n d s h o ck s fro m cl i ma te ,
s o ci a l , s ta b i l i ty
S tro n g u n d e rs ta n d i n g o f b u s i n e s s ca s e fo r s u s ta i n a b l e / tra n s p a re n t
b u s i n e s s p ra cti ce s h i gh
A fe w fi rms u n d e rs ta n d co l l e cti ve ri s k s a n d o p p o rtu n i ti e s to
ma n a ge n a tu ra l a n d s o ci a l re s o u rce s a cro s s p a rtn e rs
• # of firms using ESG standards,
including cg practices (e.g. IF RS (#))
• Level of firms on the ESG
progression matrix (1-4)
• % of firms adopting emerging
approaches (collective risk, natural
capital)
Conducive
legal/regulatory
environment for ESG
No vo l u n ta ry o r co mp u l s o ry s ta n d a rd s e xi s t, n o l e ga l re q u i re me n ts
fo r p ri va te s e cto r re l a te d to ES G i n p o we r s e cto r.
S B N n o t p re s e n t
S e l f-re gu l a ti o n p ro mo te d th ro u gh l e a d i n g co mp a n i e s th a t i n fl u e n ce
o th e rs to u s e ES G s ta n d a rd s re l e va n t to th e p o we r i n d u s try
R e gu l a ti o n s /l a ws , a re e n fo rce d (re a l a n d fi n a n ci a l s e cto r) a s
re l e va n t to i n d u s try s p e ci fi c ES ri s k s (Extre me ri s k 0-2.5 o r H i gh ri s k
2.5-5) o r n o d a ta
Ve ri fi ca ti o n me ch a n i s ms d o n o t e xi s t
S B N n o t p re s e n t, o r a t fo rma ti ve s ta ge
Vo l u n ta ry ES G i n d u s try fra me wo rk s e xi s t wi th a n u mb e r a d o p ti n g
fi rms . S ta n d a rd s i n p o we r s e cto r p a rti a l l y a l i gn e d to i n tl b e s t
p ra cti ce s I F C S ta n d a rd s / OECD Pri n ci p l e s . , a s re l e va n t
re l e va n t to i n d u s try s p e ci fi c ES ri s k s (Me d i u m ri s k 5-7.5)
Ve ri fi ca ti o n me ch a n i s m b e i n g d e ve l o p e d
R e l e va n t n a ti o n a l b o d i e s p a rt o f S B N, mo vi n g fro m e me rgi n g to
e s ta b l i s h e d
Le ga l fra me wo rk s e xi s t fo r s ta n d a rd s i n p o we r s e cto r th a t a re
a l i gn e d wi th i n te rn a ti o n a l b e s t p ra cti ce s , i n cl u d e s ES G l a ws a n d
re gu l a ti o n , co d e s , l i s ti n g ru l e s , re p o rti n g re q u i re me n ts , ES G i n d i ce s .
re l e va n t to i n d u s try s p e ci fi c ES ri s k s . (Lo w ri s k 7.5-10)
Ve ri fi ca ti o n me ch a n i s m a re u s e d i n th e i n d u s try
Co u n try a ch i e ve d ma tu re s ta tu s o f S B N i mp l e me n ta ti o n , a s re l e va n t
• D iagnostic of ESG standard
alignment of laws/regulations and
• Environmental Regulatory Index : 1-
10) Maplecroft
• Review of voluntary standards,
verification mechanisms
• SBN Annual Progress Report,
National Assessments
Broad-based capacity
for supporting ESG
practices (institutions)
No l o ca l s e rvi ce p ro vi d e rs to d e l i ve r ES G s e rvi ce s to p ri va te s e cto r.
No p ri va te s e cto r d e ma n d fo r ES G s e rvi ce s .
No s u p p o rti n g to o l s , fo r e xa mp l e ge o s p a ti a l to o l s , d a ta , a va i l a b l e
fo r th e ma rk e t
0-19% PCMT
No i n d u s try s p e ci fi c n e two rk s to jo i n tl y a d d re s s ES ch a l l e n ge s
Li mi te d l o ca l s e rvi ce p ro vi d e rs d e l i ve r l o w to mi d -l e ve l ES G s e rvi ce s ,
a n d o n l y wi th i n te rn a ti o n a l s u p p o rt.
Li mi te d s u p p o rti n g to o l s , d a ta fo r th e ma rk e t (ge o s p a ti a l ,
co n te xtu a l i za ti o n to l o ca l s e tti n g e tc.)
40-59% o n PCMT.
Exa mp l e s o f i n d u s try s p e ci fi c n e two rk s to jo i n tl y a d d re s s ES
ch a l l e n ge s (e .g. cu mu l a ti ve i mp a cts o n b i o d i ve rs i ty, e n vi ro n me n ta l
fl o ws ))
Mo d e ra te l o ca l s e rvi ce p ro vi d e rs d e l i ve r mi d to h i gh - l e ve l ES G
s e rvi ce s , n e e d o f i n te rn a ti o n a l s u p p o rt fo r co mp l e x ES G i s s u e s
S o me u s e o f s u p p o rti n g to o l s , d a ta s u ch a s ge o s p a ti a l to o l s .
60-80% o n PCMT.
I n d u s try s p e ci fi c n e two rk s to jo i n tl y a d d re s s ch a l l e n ge s a re
ma tu re d , i n cl u d i n g b ro a d e r me mb e rs h i p a n d i n fl u e n ci n g b e h a vi o rs
S p e ctru m o f l o ca l s e rvi ce p ro vi d e rs d e l i ve ry b ro a d ra n ge o f q u a l i ty
ES G s e rvi ce s i n cl u d i n g th o s e s e rvi ce s b e yo n d a d o p te d s ta n d a rd s
(n a tu ra l ca p i ta l ).
R o b u s t p ri va te s e cto r d e ma n d mo s tl y s e rvi ce d th ro u gh l o ca l
p ro vi d e rs
80-100% o n PCMT
Ne ce s s a ry p l a tfo rms i n p l a ce to a d d re s s ch a l l e n ge s a cro s s
co mp e ti to rs o r wi th i n i n d u s try (e .g. me ch a n i s ms fo r co n ti n u a l
mo n i to ri n g o f cu mu l a ti ve i mp a cts )
Sample of skill set (possible to add
to enterprise survey? )
PCMT: Partner Capacity
Measurement Tool (PCMT).
Industry diagnostic for related
roundtables, established industry
platforms
Sustainability impacts are…
SUSTAINABILITY
Rating
Description
Market
typology
(Stages of
the
market)
The market typol ogy defi nes the state of the market the project i s enteri ng i nto. The market creation i ndi cators are the me asured and moni tored evi dence that the market creation cl ai m wi l l be assessed by. Indi cators provi de evi dence of the project's abi l i ty to i nfl uence outcome s beyond the project, generating market creation outcome s.
Development channels
Wi l l th e p ro je ct tri gge r s e cto r/ma rk e t
wi d e i mp a ct o n a d o p ti o n o f En e rgy
Effi ci e n cy, Cl i ma te Mi ti ga ti o n & Cl i ma te
Ad a p ta ti o n Me a s u re s o r Pro ce s s e s ?
Wh a t i s th e l e ve l o f a d o p ti o n o f
i n te rn a ti o n a l l y re co gn i ze d b e s t
p ra cti ce s (ES G ) re l e va n t to th e s e cto r
a cro s s fi rms ?
Wh a t i s th e s tre n gth o f th e l e ga l /
re gu l a to ry fra me wo rk re l a te d to ES G
i s s u e s re l e va n t to th e s e cto r p o we r
s e cto r a n d th e q u a l i ty o f e n fo rce me n t o f
re gu l a ti o n s ?
Are th e re s u ffi ci e n t s k i l l , to o l s /d a ta ,
a n d l o ca l s e rvi ce p ro vi d e rs (e .g.
co n s u l ta n ts , fi rms , a ca d e mi a ) to s u p p o rt
fi rms i n ES G p ra cti ce s re l e va n t to th e
s e cto r?
Mo s tl y a p p l i ca b l e to p ro je cts wi th WB G
o r I F C a d vi s o ry co mp o n e n ts ta rge ti n g
ES G s e rvi ce p ro vi s i o n i n th e l o ca l
ma rk e t.
Inclusiveness impacts are…
INCLUSIVENESS
Rating
Description
Market
typology
(Stages of
the
market)
Wi l l th e p ro je ct i n tro d u ce i n cl u s i ve
b u s i n e s s mo d e l s ta rge ti n g u n d e rs e rve d
gro u p s ?
Integration impacts are…
INTEGRATION
Rating
Description
Market
typology
(Stages of
the
market)
Wi l l th e p ro je ct i mp ro ve s p a ti a l
i n te gra ti o n ?
D o e s th e p ro je ct s u p p o rt d e ve l o p me n t
o f l o ca l s e cto r s u p p l y ch a i n ?
Wi l l th e p ro je ct s u p p o rt fi n a n ci a l
i n te gra ti o n ?
Resilience impacts are…
RESILIENCE
Rating
Description
Market
typology
(Stages of
the
market)
Wi l l th e p ro je ct co n tri b u te to
d i ve rs i fi ca ti o n o f p o we r ge n e ra ti o n
s o u rce s ?
Wi l l th e p ro je ct i mp ro ve th e co s t
re co ve ry o f th e e l e ctri ci ty s ys te m?
D o e s th e p ro je ct l e a d to s ys te mi c
i mp ro ve me n t i n q u a l i ty a n d re s i l i e n ce
o f e l e ctri ci ty s u p p l y b e yo n d p ro je ct-l e ve l
o u tco me s ?
Wi l l th e p ro je ct s u p p o rt th e
o p e ra ti o n a l i za ti o n , i mp l e me n ta ti o n
a n d /o r d e ve l o p me n t o f e n e rgy s e cto r
re fo rms to i mp ro ve e n e rgy s e cto r
e ffi ci e n cy a n d e ffe cti ve n e s s i n cl u d i n g
cl i ma te ch a n ge re l a te d ?
MARKET CREATION OUTCOME DEVELOPMENT CHANNELS
MARKET CREATION OUTCOME
A market creation outcome is…
Demonstrate a clear channel through which the intervention delivers the identified market outcome. Potential channels include:
1. Putti ng i n pl ace enabl i ng frame works. Thi s may i ncl ude: pol i cy/regul atory reforms; pl atforms or fi nanci al i nnovations.
2. Taki ng actions that contri bute to promoting competition and tri gger other market pl ayers to up thei r game .
3. Demonstration and repl i cation effects, and more general l y the spi l l over of i deas. Thi s may i ncl ude: i nnovation; i mproved manageme nt and effi ci enci es.
4. Bui l di ng capaci ty and ski l l s that open the market to new opportuni ties.
Competitiveness impacts are…
COMPETITIVENESS
Rating
Description
H o w e ffe cti ve l y d o e s th e p ro je ct
i n cre a s e co n s u me r we l fa re b y
i n cre a s i n g co mp e ti ti ve n e s s .
Market
typology
(Stages of
the
market)
Wi l l th e p ro je ct s u p p o rt i mp ro ve me n t i n
ma rk e t s tru ctu re ?
D o e s th e p ro je ct i n cre a s e :
(1) u s a ge o f n e w te ch n o l o gy o r p ro d u ct
wi th re p l i ca ti o n p o te n ti a l i n to th e
s p e ci fi c e n e rgy ma rk e t s e gme n t,
(2) s h a re o f th e re n e wa b l e e n e rgy
ge n e ra ti o n (e xcl u d i n g h yd ro )?
Wi l l th e p ro je ct l e a d to i mp ro ve me n t i n
re gu l a ti o n a n d p ri ci n g me ch a n i s ms to
i mp ro ve co mp e ti ti ve n e s s i n th e s e cto r?
AIMM Sector Frameworks Detailed Approach
January 2019 34
Power Framework – Contribution to Market Creation Dimension
Market
Attributes
Competitiveness,
Integration
...
Market
Element
Market Typologies
(by element)
Market Indicators
and Frequency

…provide structured guidance on
assessing relevant risks to achieving
projects’ development impact potential
January 2019 35

Assigning Likelihood for Impacts
January 2019 36
Project
Outcomes
Contribution
to Market
Creation
Operational risks (complexity, sponsor, design, E&S
and integrity)
Sector risks (regulation, institutions, etc.)
Macro risks (growth, BOP,
fiscal, debt, exchange rate, inflation
issues
Sector risks
Macro risks
Policy / Political risks
(political economy & governance,
political unrest, instability, conflicts)
Low?
Medium?
High?
follow risk assessment practice to
identify and substantiate rationale
…to judge likelihood assessment
of potential impacts

Rating Project Impact Likelihood
January 2019 37
Project Impact Likelihood Assessment
(separate for project outcomes and
contribution to market creation)
Extent of the risk
below
average
average
above
average
Operational risks (project only)
Sector risks
Macro risks
Policy / Political risks (market only)
Impact Potential – Likelihood Low Medium High
…by identifying and substantiating different types of risks
Likelihood judgement

4. The AIMM Framework
…translates development impact
assessments into rating & scores for
project’s dimensions & overall impact
January 2019 38

From Qualitative Ratings to Numerical Score
Establish Potential
• Very Strong (75)
• Strong (40)
• Moderate (20)
• Marginal (0)
Assign Likelihood
• High (90%)
• Medium (75%)
• Low (60%)
Locate score range
• ≥ 85 = Excellent
• 51-85 = Good
• 31-50 = Satisfactory
• ≤ 30 = Low
January 2019 39
Project Outcomes
Establish
Potential
Risk-Adjusted
Project Score
Assign
Likelihood
Establish
Potential
Risk-Adjusted
Market Score
Assign
Likelihood
AIMM
Score
AIMM Scores follow a 0-100 Scale

Discussion and Q&A
January 2019 40

15 jan ifc_aimm

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