Beginning in the 1980s, governments around the world introduced market reforms to their electricity supply industries in order to create competition in the production and supply of electricity. A standard textbook approach relied on empowering an independent electricity regulator while unbundling the often state-owned monopoly into several shareholder-owned generation businesses and separate transmission and distribution businesses.

However, in most developing economies, such as South Africa, state-owned enterprises have remained dominant in generation, transmission and, often, distribution of electricity, even after reforms. Absent robust structural changes, the reform process must go beyond the standard textbook approach with a more expansive regulatory oversight of the sector. The aim of this report is to take the lessons learned from electricity supply industries market reforms elsewhere to provide guidance on the necessary attributes and capabilities of a strong regulatory framework for an effective competitive market where continued state ownership of the electricity supply industry prevails. 

This report also includes an annex, highlighting key information from the report, and a supplementary table, Coordinating Oversight Responsibilities in an Electricity Market with State-owned Enterprises.