_Exogenous factors:_ General economic reform efforts saw many countries that implemented structural adjustment programs in the 1990s also liberalize their power sectors to allow private sector engagement. The depth of reforms reflects contextual differences (e.g., market size, policy environment). Deep reforms were often driven by bold policies sometimes adopted in the face of a macro crisis. Some of the deepest reforms were triggered by economic crises that propelled countries to implement bold reforms, or by regionalization, for example, EU accession requirements for the previously centralized economies in central and eastern Europe. In the case of Türkiye, market transformation can be linked to the country’s planned accession into the EU, which included a set of the EU’s electricity directives, dating back to 1996. However, it was the major macro crisis of 2000/01, which left the government with a large debt overhang, that provided the impetus for radical reforms. Argentina’s two-phased reform was also triggered by macro and political crises (Wolfram, Shelef, and Gertler 2012).

# **_3.3 Common Trends_**

The mapping of power market structures highlights several common features across countries that transitioned between market structures. These include the following: _Long lead time:_ Transition from VIU into SBM occurred within a time frame of 15.7 years on average. As part of the transition, countries implemented a series of reform measures including unbundling the VIU. In many cases it took several years for any IPPs to enter the market following these reforms. The move from SBM to WRC took on average 9.7 years. Türkiye, for example, took 13 years to develop a fully functional wholesale market, gradually introducing key building blocks, including the temporary balancing and settlement mechanism that enabled the introduction of merchant plants within three years of launching reforms. On average it took countries 6 years to transition from partial retail competition to full retail competition. Romania had the longest transition. It took 21 years for retail competition to be operational for all Romanian consumers. Retail competition in Romania started in 2000 when the government allowed market opening to the largest industrial power consumers (Indre, Indre, and Conecini 2001). In July 2005 retail market was further expanded, allowing all industrial consumers to choose their power supplier. At the time, there were 8.6 million power consumers in Romania, of which 8 million were residential and 600,000 were industrial consumers (Mihaela and Bădileanu 2014). Thus, only 7% of the total consumers were able to choose their suppliers. The majority of the consumers remained under regulated tariffs until 2021. In January 2021, the government fully liberalized the retail market with the aim of enhancing competition between suppliers on the market and the increasing availability of bundled energy products (Botezatu Estrade Partners 2021).

Lead times also reflect hurdles faced by countries in the transition process, with numerous documented instances of countries transitioning to a new structure but having difficulties fully operationalizing this new structure. A common example is countries that changed market structure from VIU to SBM but operationalization was delayed due to no IPP entry. Ethiopia in 2013 initiated reforms to attract private sector investment to increase generation capacity amid demand growth and significant load shedding. The government partially unbundled the VIU separating distribution and created an institutional framework for establishing IPPs in the sector. There were two tendering rounds to procure 1,000 MW of electricity from IPP projects; the first tender for two solar photovoltaic (PV) projects led to the signing of a PPA that was hailed as one of the cheapest tariff rates in Sub-Saharan Africa, at US$2.526 cents/kilowatt hour (kWh) over 25 years (Ayele et al. 2021). However, none of the projects have yet become operational due to a range of macroeconomic issues including risk of foreign currency availability.

_Strong regulators:_ Based on the Global Power Market Structures database, majority of countries established an energy regulator between 1991 and 2010 (Table 3). During this period 125 countries transitioned 20