# _Institutions_

The story of Egypt’s utility restructuring is described in detail in the section on Egypts’s power sector reform strategy. In essence, in the long period through the 2014 Electricity Law’s adoption, much was done but little was achieved. Institutions were rearranged more than they were genuinely restructured. Incentives, performance, and behavior changed little.

The 2015 Electricity Law initiated a process of restructuring, with a long transition process. Eventually, sector companies will operate autonomously of the Ministry of Electricity and Renewable Energy and will be accountable to the regulator and to their owners for performance. More private participation is already happening in renewable energy and that may spread to conventional energy. The transmission company is being gradually made more autonomous in preparation for becoming an independent system operator within an eventually competitive wholesale electricity market. Of course, much of this depends on the sustainability of the gradual price and subsidy reform now underway.

Table 5. Utility restructuring index for Egypt and its comparators, 2015

||**Egypt**|**India, AP**|**India, Odisha**|**India, Raj**|**Morocco**|**Pakistan**|**International**<br>**benchmark**|
|---|---|---|---|---|---|---|---|
|**Utility Restructuring**|**31%**|**51%**|**62%**|**51%**|**0%**|**62%**|40%|
|_Vertical Unbundling_|0.40|0.80|0.80|0.80|0.00|0.80|55%|
|_Horizontal Unbundling_|0.22|0.22|0.44|0.22|0.00|0.44|24%|

Source: Rethinking power sector reforms, 2015 The commercial and operational efficiency of utilities may be a reflection of the corporate governance and management practices followed at the utility. To understand this relationship better, the corporate governance data for utilities in the rethinking power sector reform project were collected. The data reflect the practices followed in 2015. Given the structure of the power sector in 2015, all distribution companies follow exactly the same governance and management practices given their common ownership and nesting in a holding company. Thus, for this section we do not look at Cairo North and Alexandria separately.

Table 6: Utility governance of Alexandria and Cairo North with their comparators, 2015<sup>16</sup>

||Egypt|India,|Odisha|Indi|a,AP|Ind|ia,Raj|Pa|kistan|Morocco|International|
|---|---|---|---|---|---|---|---|---|---|---|---|
||EEHC(Discos)|WESCO|CESU|APSPDCL|APEPDCL|JVVNL|JDDVNL|LESCO|KE|ONEE|benchmark|
|**Overall Utility Governance**|**55%**|**68%**|**26%**|**52%**|**52%**|**63%**|**63%**|**52%**|**90%**|**53%**|63%|
|**Corporate Governance**|49%|86%|13%|47%|47%|67%|67%|56%|94%|35%|62%|
|_Accountability_|_42%_|_83%_|_25%_|_50%_|_50%_|_67%_|_67%_|_67%_|_100%_|_25%_|60%|
|_Autonomy (SOEs)_|_56%_|_89%_|_0%_|_44%_|_44%_|_67%_|_67%_|_44%_|_89%_|_44%_|63%|
|**Utility Management**|**61%**|**50%**|**40%**|**56%**|**56%**|**60%**|**60%**|**48%**|**86%**|**72%**|64%|
|_Financial Discipline_|_53%_|_43%_|_36%_|_53%_|_53%_|_64%_|_64%_|_50%_|_79%_|_64%_|59%|
|_Human Resource_|_71%_|_70%_|_40%_|_43%_|_43%_|_36%_|_36%_|_43%_|_86%_|_79%_|62%|
|_Information and Technology_|_60%_|_36%_|_43%_|_73%_|_73%_|_80%_|_79%_|_50%_|_93%_|_73%_|71%|

Note: Scores based on index developed for the Rethinking Power Sector Reform Project. For more details go to project website at http://www.esmap.org/rethinking_power_sector_reform

> 16 For the more detailed utility governance index, go to the annex.

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