This paper examines the difficulties in developing energy policy in the Third World. It emphasises that, despite the significant environmental impact of energy it is difficult to develop energy policy. Most significant decisions in the energy field are taken by Ministries of Finance not Ministries of Energy or Environment. The role of energy in production is examined together with the emerging nature of energy markets, with particular reference to the provision of electricity. The nature of energy institutions themselves are examined, including the minimalist role for government.