Transmission grid financing

This Working Paper covers success factors and key learnings from different transmission grid financing models. It also presents a toolkit for policymakers that aims to provide guidance in the selection of suitable financing models in their respective country context, and in the preparation of necessary implementation modalities. The paper unpacks public investment, minority private investment, public private partnerships, merchant lines and privatisation models, and finds independent transmission projects that are implemented through competitive bidding processes a promising option for power system expansion in emerging markets and developing economies. In the annex's country case studies, the paper draws lessons to support policymakers, power utilities and electricity regulators in unlocking much needed investment in power transmission grids, for grid modernisation, stability and decarbonisation. While the main focus of the paper is on emerging markets and developing economies, the insights and practical toolkit also have relevance for advanced economies.