| Project Detail |
The TA is structured with a sequential program of tasks. The TA includes four outputs: (i) calculating the real cost of electricity supply (power generation, transmission, and distribution); (ii) designing a new tariff structure for power generation, transmission, and distribution, with differentiating tariffs for different customers and different generation sources (hydro, solar, water, gas) in existence and in development, to replace the current single tariff for all customers and thereby allow cross-subsidization between customer classes; (iii) developing a financial recovery road map for gradual increase in tariff, to achieve a full cost recovery level by 2022; and (iv) undertaking a public information campaign on tariff reform, case studies of good practices in other countries, and institutional strengthening. Such a road map will take into consideration an increase in operational efficiency, targeting subsidies from the government to benefit poorer segment of consumers selected using a suitable rationale. In parallel, a detailed review of the existing policy, legal, and regulatory framework will be undertaken and recommendations will be provided to the government for consideration. The TA will refer to international best practice in cost recovery tariff design in the power sector, and assess the potential application and benefits specific to Azerbaijans power sector. |
