ENHANCING BRAZIL'S REGULATORY FRAMEWORK FOR NETWORK INDUSTRIES: THE CASE OF ELECTRICITY, OIL AND GAS, AND WATER AND SANITATION (Economics Department Working Papers No 425)

This paper assesses Brazil's regulatory framework and agencies for several network industries (electricity, oil and gas, and water and sanitation). Private investment can be encouraged by tackling regulatory uncertainty in many areas. To this end, recent initiatives include a new regulatory model for the electricity sector, and new draft legislation on the role and structure of the regulatory agencies (currently in Congress). The overall approach to regulatory reform in network industries, particularly in electricity, is well thought out but the risk of regulatory failure should not be underestimated. Implementation will be the ultimate test of reform in this area. In natural gas, the dominance of Petrobras, the national oil company, throughout the industry has often been perceived as an obstacle to its development. Private investment in water and sanitation is constrained by a lack of clarity over the assignment of regulatory powers across different levels of government. These reforms are consistent with the government's agenda for growth, focusing on meeting the challenge of improving the business environment.

1. Introduction

2. Unifying the institutional framework for the regulatory agencies

3. Regulation of network industries

3.1. Electricity.

3.2. Natural gas

3.3. Oil

3.4. Water and sanitation

ANNEX 1. SELECTED REGULATORY AGENCIES: ANSWERS TO A QUESTIONNAIRE SUBMITTED TO THE BRAZILIAN AUTHORITIES