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Privatization of electricity distribution in the Northeast of Brazil: The good, the bad, the ugly or the naïve?

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  • Silvestre, Bruno
  • Hall, Jeremy
  • Matos, Stelvia
  • Figueira, Luiz Augusto

Abstract

This paper analyzes the evolution of five electricity distribution companies in the Northeast of Brazil using technical and financial indicators. Three privatized and two public firms were analyzed between 1997 and 2008. The financial indicators are used as proxies for the capacity of the business to generate value for shareholders, while the technical indicators are used as proxies for service quality provided to consumers. We observed that the privatized firms had their financial indicators improved after privatization, increasing the value of the firm for the shareholders. However, there is no evidence that privatization affected the quality of service provided to consumers.

Suggested Citation

  • Silvestre, Bruno & Hall, Jeremy & Matos, Stelvia & Figueira, Luiz Augusto, 2010. "Privatization of electricity distribution in the Northeast of Brazil: The good, the bad, the ugly or the naïve?," Energy Policy, Elsevier, vol. 38(11), pages 7001-7013, November.
    • Handle: RePEc:eee:enepol:v:38:y:2010:i:11:p:7001-7013
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    3. Devkar, Ganesh A. & Mahalingam, Ashwin & Deep, Akash & Thillairajan, A., 2013. "Impact of Private Sector Participation on access and quality in provision of electricity, telecom and water services in developing countries: A systematic review," Utilities Policy, Elsevier, vol. 27(C), pages 65-81.
    4. Sylvia Gaylord & Kathleen J. Hancock, 2013. "Developing world: national energy strategies," Chapters, in: Hugh Dyer & Maria Julia Trombetta (ed.), International Handbook of Energy Security, chapter 10, pages 206-236, Edward Elgar Publishing.
    5. van Els, Rudi Henri & de Souza Vianna, João Nildo & Brasil, Antonio Cesar Pinho, 2012. "The Brazilian experience of rural electrification in the Amazon with decentralized generation – The need to change the paradigm from electrification to development," Renewable and Sustainable Energy Reviews, Elsevier, vol. 16(3), pages 1450-1461.
    6. Muller, Renan Bergonsi & Rego, Erik Eduardo, 2021. "Privatization of electricity distribution in Brazil: Long-term effects on service quality and financial indicators," Energy Policy, Elsevier, vol. 159(C).

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