 Good afternoon, I'm very happy to be here my first time in Vietnam Thank you so much for the kind invitation by you when you wider particular to China here and I will talk today about Brazilian case study the institutional reform of the Brazilian power sector and The implications it had for transformation inclusion and sustainability Actually this Presentation is draws extensively from previous research work done in Collaboration with the overseas development Institute from the UK and together with our British friends We examined the Sustainability of Brazilian energy system as a whole so I focus here only on electricity and Particularly because as the previous speaker has already mentioned access to Affordable reliable and clean electricity is a key requirement of sustainable development so this Reform of Brazilian power sector has as its main Target increasing the economic efficiency of supply through market transportation this was done in the early 90s following the extensive debate all over the world about privatization of power sectors and was particularly inspired by the UK case These were the times where there was also strongly a political debate and a lot of neoliberals reform all over the globe following touch a reason and economics, so In the case of Brazil this reform actually led to has led to undesirable social effects and also environmental negative environment impacts and Eventually also the economic sustainability was jeopardized by a power shortage and this led the following government to Take a reform of the reform so I think this lessons of that can be learned from this experience of Energy regulation Interesting in terms of Discussing how to get to the right balance between state and market in the energy sector so the reform was done between 1984 in the 98 the first government of the Fernando Cardoso administration in Brazil and Before the reform what we get was a few state-owned Companies there was a holder Electrobras and it was a vertically bundled Industry that means that generation transmission and distribution where actually Now I can't see it's even worse. Okay. Thank you All right now maybe Better for you to follow so you have here and left column the pre-reform situation and Of course, there were problems with this kind of industry There was a financial crisis The state was not any longer able to supply to provide the financial resource to the investment in the huge Hydro power plants with long term construction and return on investment periods so the The previous situation that allowed this state-owned at system to endure and actually led to Brazil will have in striking high renewable share In the overall energy and electricity generation For for instance in 1999 at Brazil had 90% 90% of all electricity was generated through hydro power and This situation was made feasible by a mix of Public funding and also soft loans from International agents 60 to 40 percent, but this was not any longer Feasible giving the size of the system and also a lot of Conditionalities and constraints on the soft loans from agents like the World Bank Because of environmental concerns in building large hydro power plants so the government also was in a The Brazilian economy as a whole after the Monetary over the foreign debt and the public finances were facing a very difficult period so they needed to privatize to sell Some actives so the reform was as in other countries led to the privatization of The transmission and the distribution the generation they had not the time to do it there was the vertical unbuddling of the industry and There was a federal power regulatory Board that was created and they did to have a Competitive generation banning the monopolies attracting foreign investor and private funding and We've moved from centralized planning with a whole List of projects to indicative planning. So This situation Actually As in other countries Was following more or less the the model of the UK reform the problem isn't in Brazil with the Overwhelming role by hydropower there was actually a failure to generate incentives for the private sector to Take this investment in large hydropower plants because even if the electricity price would go up To recover the sums spent in acquisition of the state-owned Utilities the problems that the risk a Version of the private sector for long-term projects Also the environmental Certains over getting violent license Made that actually the supply capacity has not followed and we had a power crisis in imposing 20% cuts on households by the end of last century so In during this period there was also the negative performance that hydropower Share was decreased from 90% to 80% It was done too fast this reform just in five years against 15 years even in the UK And of course electricity price increase have put on a heavy heavier burden financial burden low-income class where the share of Electricity expenses increased dramatically compared to the household income So we have some figures in Brazil. There was already good access to electricity urban areas in Before the reform it was 68% in rural areas to us increase not so much but to 74 so overall Average electrification has a slowly increased from 92 to 95% Also is more increase of more than 10% in average household electricity consumption, but More than 80% of increase in the tariffs and then connection fees as well. So We've the political context Changed after two terms to four years terms of the Cardozo administration the Lula government for eight years Also to four years terms Did the reform of the previous reform stop privatization? Of course have no renationalization of distribution Which was kept private, but the generation Was still in the hands of state-owned companies is still today and there was the creation of a federal Planning agents EP as a research and planning arm of the Ministry of Energy who actually Got back to normative planning determines according to the Demand prospects that the privatized utilities have to give the government have to say how much power they Need in the next five years and they are bound to have contracted the Generation to meet that demand and the government takes care of what Plants have to be Built and where so the hydropower potential of river basins can be fully Explored because when in hand of the private sector sometimes sites that could generate say 1,000 megawatt We're just equipped with 200 megawatts and they were flooding all the Possibility to have the 800 megawatts just to give you an example So there was a kind of predatory use of natural resources by the private sector so this hydropower potential now is being tapped and There was a key Key Feature of this new planning is that the tendering is based for The project already decided by the government already with the environment to license the environment to permit that so the risk For the private sector is considerably lower. It is a reverse auction. That means that The the winner is the consortium that actually will build that project and Will have the Lower electricity price to the consumer so the model privileges the modesty of the electricity prices and The National Development Bank has been very key together with the state owner power generation utilities to make it feasible a public private partnership to fund this large rise of power plants but also Made possible a fast increase of wind power in Brazil as in other places and Hydro has stabilized at 80% which already an achievement In the last ten years so this actually in overall energy consumption Brazil taking also the fuel the heat demand Brazil had in Nearly half 49% of overall and energy consumption would come from renewables mainly hydropower and ethanol and baguettes from sugar cane and also renewable charcoal from eucalyptus Plantations now from 90 90 to 2000 this share of renewables dropped from 49 to 41 percent partly due to lack of investment in hydropower And from 90 from the year 2000 2010 after this reform of the reform it was back from 41 Increased again to 45% of overall energy in the country is renewable so there was also Improvement in the social impacts because of stronger role of the federal regulatory board in Requiring specified the number of new electricity connections So universal access to every household in the country is target for next year 2015 and the program to do that was replayed from the Replaced from the previous light for a light in the countryside the name of the previous program to extending electricity access to this light for all and a brief comparison of the two programs Shows how the new program has channel more resources significant models sources near Point 37% of the GDP against point 25% and Connected to point million households So now the excess of a brutal households that was increased from 68 to 74 percent in the previous program Now has reached 90 percent. So Electricity access in Brazil next year May be very close to 100 percent to all the households So Finally the lessons learn and policy recommendation that we can draw from this case is Mainly the danger of automatically Translating translating international regulatory trends for managing public utilities to a national context We have to address domestic Circumstances specificities for in the case of Brazil the natural resource Endowment in hydro power resources for instance and of course we have to manage Concerns about extension of electricity assets and afford the ability which is a key part of access of course and The adaptive policy learning and the change the reform of the reform is also interesting aspect so There was a kind of back-and-forth. So actually Didn't go back to the previous situation But it's more like a compromise in the middle way with greater state-led planning but a mixed Economy of provision and particularly much more room for the private investment in Generation which is absolutely key for the expansion of the system so I think that is also important to check the Impacts on the environment particularly the share of renewables and also the social impacts as Electric access. So this kind of report must take these concerns aboard and actually provide a specific programs targets to Take care of the possible Negative impacts on low-income classes. Thank you