According to the provisions of Law 48-15 on the regulation of the electricity sector and the creation of the National Electricity Regulatory Authority (ANRE), three objectives must be met to implement the accounting separation of ONEE’s activities.

First, it is necessary to define and approve the precise classification of the National Office of Electricity and Drinking Water’s various activities, such as electricity production, transmission, and distribution, as well as any other potential activities. Additionally, the rules for properly allocating assets, liabilities, revenues, and expenses among these activities must be validated. Finally, principles must be established to govern the financial relationships between these activities once they have been separated for accounting purposes.

The accounting separation of ONEE’s activities is an essential prerequisite for reassuring future investors

A reform preceding the liberalization of the various activities in the electricity sector, which is ultimately expected to open up to competition: accounting separation is an essential prerequisite for reassuring future investors.

“This is a major undertaking that has been carried out between ONEE and ANRE. It was a colossal task to define the boundaries of each area—production, distribution, and transmission. Regarding the latter, the law requires that the transmission segment be managed by an independent legal entity. This necessitates the accounting separation of activities,” explained a public administration official contacted by TelQuel.

Preventing the risk of cross-subsidization

The challenge lies in the coherent separation of ONEE’s activities, which were previously intertwined, to prevent any risk of cross-subsidization between regulated activities and those open to competition. This is a complex task that requires time and meticulous attention, which explains the extension of the initially allotted deadlines.

For now, no date has been announced for the effective accounting separation of activities, reveals an expert contacted by TelQuel. The expert explains that, with the “support of specialized firms, ONEE and ANRE are working to establish the framework and rules to separate the accounts. The goal is to produce distinct opening balance sheets for each activity within a few months.”

Avoiding redundancies

And to add that if the issue has been under discussion for several years, it is because “the situation presents significant constraints. To begin with, the different activities share the same buildings and, in some cases, the same resources.” This is “part of” the reason for the delay in finalizing a framework for the accounting separation of ONEE’s activities.

However, the project is on the right track, the expert assures: “From a technical standpoint, the main challenge is to define the principles on which the separation should be based while avoiding redundancies and ensuring that each segment maintains its own financial balance.”

“This requires defining appropriate allocation keys to assign shared or common resources to each activity in the correct proportions. As ONEE and ANRE continue their work, new allocation methods will likely be established progressively,” the expert concludes.

Written in French by Amine Belghazi, edited in English by Eric Nielson