 the higher capital costs in power generation that result from switching to nuclear power, renewables and distributed generation. INFRASTRUCTURE TO 2030: TELECOM, LAND TRANSPORT, WATER AND ELECTRICITY - ISBN 92-64-02398-4 - © OECD 2006 OUTLOOK FOR GLOBAL INVESTMENT IN ELECTRICITY INFRASTRUCTURE Investment needs will be driven by demand growth. But it is not certain that all of the investment needed will be forthcoming whatever the rate of demand growth, such that some part of demand might go unmet. The main uncertainties surrounding the adequacy of electricity investment worldwide relate to the impact of market reforms, environmental constraints and access to capital. In general, the effects of the first two on investment are most uncertain in OECD countries. Policy makers are seeking to address concerns about the adequacy and timeliness of investment in both capacity and systems to ensure system reliability and an adequate quality of service in those countries by establishing a market framework that sends efficient market signals to investors. Access to capital - a minor issue in the OECD - is perhaps the biggest uncertainty facing non-OECD countries, especially those in developing regions. They are increasingly looking to the private sector to fund at least part of the investment needed to finance electricity projects, mainly because of constraints on public funding. Yet, obtaining sufficient private sector capital in many cases will be difficult, due to poorly developed local financial markets and an unfavourable regulatory and investment climate. Overcoming these obstacles will require major improvements in governance and continued restructuring and reform in the electricity sector. A particularly pressing challenge is to reform tariff structures both to ensure that prices fully cover costs and to improve revenue collection. 1. Introduction This chapter assesses the impact of socioeconomic, policy and technological developments on the outlook for global investment in electricity supply infrastructure - power 