market design & regulatory

there is no No One-Size-Fits-All solution for well functioning markets

Our team members possess first-hand experience navigating market challenges. We’ve crafted a multidisciplinary approach tailored to address our clients’ unique constraints, ensuring effective solutions that meet their needs. 

Market Organisation

Defining market structures and mechanisms with a purpose

We support clients in designing the right mechanism; whether you aim at optimizing costs, increasing service provision, developing greener assets, or incentivizing private sector participation.

​Our Approach

– Technical, economic and financial diagnostic, including demand projections and past financial performance evaluation
– Regulatory benchmarks
– Stakeholder consultation

The Outcome

– Proposed organization, including implementation roadmap, timeline, costs and monitoring and evaluation framework
– Investment and financing incentives
– Capacity building

Projects

Utilities’ financial / operational performance

The right service at the right cost

In the electricity and water sectors, cost cutting is not always the right path to cost of service optimization.

​Our Approach

– We analyse the past operational and financial performance of the operator.
– We benchmark with the performance of similar operators, while accounting for the specificities of each company in the benchmark
– We interview professionals from all departments in the company: planning, bill collection, financial officers, technical staff, etc.

The Outcome

– We identify future development options : developing new assets, regional integration, enhancing day to day operation, developing smart systems, etc.
– We code these into a combined financial-operational model, considering both their costs and their benefits.
– The most impactful measures are discussed with the operator and an implementation pathway is co-constructed

tariff design

Tariffs designed to meet the challenges of the economy

Tariffs may be designed to:

– Face higher investments needs or cash management issues in lower investment phases of the cycle.
– Give the right incentives to operators to enhance quality of service and develop projects in line with the sector’s policies.
– Incentivize energy efficiency or limit peak power demand.
– Enhance access to water and electricity for lower income households.
– Enable the development of job creating industries.

When assisting you in designing the right tariffs to meet your challenges, we leverage:

– Regulatory benchmarks and stakeholder consultations
– financial theory (CAPM model) and economic theory
– financial modelling and economic forecasts

Contracting of public services

Contract types, quality indicators, M&E frameworks

Contracting public service provision to the private sector is a tricky exercise:

– How to select the right contract for the service : Concessions, management contracts or operation and maintenance?
– How to define the perimeter of the private sector participation?

We advise you on:

– Risk allocation considering technical specificities of the service, investment needs, market appetite and contracting capacities.
– The definition of service fees and associated incentives.
– Quality indicators considering existing and planned metering systems.
– Data reporting.
– Monitoring and evaluation frameworks.