PSIA in Policy Dialogue: Energy sector reforms

in Serbia

Caterina Ruggeri LaderchiECSPE

Ongoing reforms in the energy sector◦ Energy sector reform program under EU market

principles launched in 2004◦ Independent regulator + move towards cost

recovery through regular pattern of increases South Eastern Europe Energy Community

◦ External commitments to raise tariffs and protect vulnerable consumers

◦ Countries prepare action plans on protecting the poor

Political sensitivity of tariff increases in a crisis context

Context

Series of analytical products New engagement with different actors Very good multi-sectoral collaboration Opportunity to make substantive impact by

providing input into secondary legislation defining◦ Vulnerable groups◦ Practical measures to ensure energy affordability

Ongoing PSIA process

Poor households most affected by reforms• High reliance on electricity, and high share of electricity expenditures in

consumption• Debt arrears as a major issue• Often little ability to manage energy consumption

Vulnerability to price increases:◦ High shares of energy poverty: Elderly households, especially if single;

Single parent households and households with infants; Households dependent on transfers and social insurance

◦ Elderly in particular little flexibility in their budgets to adjust expenditures and already consuming little energy

Policy performance• Earmarked assistance to poor households – small program and low take up• Need to address low take up of regular social assistance• Scope for extending double metering• Scope for thinking of energy efficiency

Emerging findings

One way to look at processQuantitative analysis

• Electricity expenditure patterns

• Electricity consumption patterns

• Distribution of subsidies

• Welfare impact of price increases

• Poverty impact

Focus groups with poor consumers

Engagement with inter-ministerial working group

Range of policy

options

Request

Another way to look at process

Press clipping

Possible DPL PSIA

Initial analysi

s

Technical discussion with Regulator

Request from technical

working group

Social map

Social protection

options

Energy agenda items

Multi-sectoral dialogue

HD(Energy)

Focus groups with poor users

Legislative developments:• Reform of social assistance• Consumer protection law

• Draft energy law Secondary legislation will define

vulnerable categories

Targeting criteria

Operational support

for implement

ation

Ongoing WB engagement in dialogue and development of project pipeline

Timeliness (luck?) Serious external commitment created:

◦ Demand◦ Institutional counterpart

Outputs easy to tailor to requests Broadening dialogue with additional tools Overall PSIA part of a broader engagement

with the country team◦ Strength of sectoral dialogue

What is working well

Multi-sectoral and decentralized team Evolving nature of the engagement

◦ Dynamic environment◦ In terms of WB work: managing transitions

between different phases of the dialogue Tension between institutional arrangements

and need to broaden audiences◦ Persuasive role that analytical work has to play

What has required attention