The liberalization and privatization of power sectors have been proceeding around the world since the 1990s, starting with Chile in 1982 and spreading to Asian Countries. Although some differences in degrees of liberalization and of privatization exist, the countries aim to reduce electricity tariffs and increase private investments by separation of generation, transmission, and distribution, introduction of competition, and efficient management of power utilities. However, it needs to be noted that framework of the power sector has shifted from “Development of the power sector anchored on the government guarantee” to “That of reasonable and fair risk sharing by each stakeholder”. Until now, in the Asian power markets, each country's public power utilities have guaranteed electricity purchase backed by the government's guarantee, eventually relieving electric power IPPs from investment risks in the market. However, the government's guarantee is going to be ceased due to financial difficulties of the government. In this sense, it is meaningful to study the experiences of Central and South America, where public utilities have already been privatized. Power business has already been operated with private investor's own risks.The lessons we could learn from experiences of the countries proceeded in power sector reforms in Europe, North, Central & South America are that the government should assume its responsibility in stabilizing the macro economy including exchange rate, and should design framework to facilitate competition among private investors in the area where market principle cannot be applied to, such in the field as transmission investment and rural electrification and prepare regulatory framework, including the reasonable transfer of price risks to end consumers, the reinforcement and gradual increase of electricity tariffs, grid code, market rules, establishment of supervisory organizations, setting up of incentives to facilitate investments in generation and transmission and so on.
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