Enhancing Effective Regulation of Water and Energy Infrastructure and Utility Services: Interim Pacific Report

This report was prepared by Castalia Advisory to the Asian Development Bank. The provision of water and energy infrastructure and services in the Pacific is poor when compared with other small island states. Many people, especially the rural poor, lack access to adequate water and energy services, and many water and energy utilities provide ineffective and inefficient service. Moreover, the environmental effects of energy and water services appear unsustainable in many instances, with the near exhaustion of the water resources on many islands and on-going dependence on diesel generation for electricity. Poor performance in these sectors is constraining economic development in the Pacific, and could be frustrating productive investments in other sectors of the economy. Pacific island governments have acknowledged that regulation has a role to play in improving sector outcomes through previous regulatory reform. However, sector reforms have not achieved their primary objective of ensuring the provision of infrastructure services consistent with the quality levels demanded by consumers and at affordable prices. Equity and environmental objectives appear to have slipped even further.