OECD Pacific -19.6 Transition economies -21.2 Russia -15.0 Developing countries 1 945 1 807 4 564 -12.3 China 1 686 -18.3 East Asia Indonesia -15.6 South Asia -17.5 India -19.3 Latin America Brazil -18.2 Middle East Africa World 4 306 1 164 2 793 8 263 -15.7 5. Critical uncertainties surrounding the adequacy of investment The main uncertainties surrounding the adequacy of electricity investment worldwide in the medium term relate to the impact of market reforms, environmental constraints and access to capital. The relative importance of these uncertainties varies among developed and developing countries. In general, the effects of market reforms and environmental constraints on investment are most uncertain in OECD countries, while access to capital - a minor issue in the OECD - is perhaps the biggest uncertainty facing developing countries. INFRASTRUCTURE TO 2030: TELECOM, LAND TRANSPORT, WATER AND ELECTRICITY - ISBN 92-64-02398-4 © OECD 2006 3. OUTLOOK FOR GLOBAL INVESTMENT IN ELECTRICITY INFRASTRUCTURE Impact of market reform Market liberalisation or reform is creating new challenges and uncertainties in the electricity sector in OECD countries and in many other parts the world. 2 There is no reason to believe that competitive electricity markets cannot provide incentives for timely and efficient investments (IEA, 2005b). The key requirements are effective competition through properly regulated third- party access to unbundled networks; cost-reflective pricing of network services; and market rules that ensure transparency and low transaction costs. In addition, there is the challenge of creating a smooth regulatory framework for transparent and clear approval processes of new generation plants and network infrastructure. At present, market players are investing in liberalised electricity markets, even without additional capacity measures. Market reforms are expected to bring major economic benefits through more efficient investment and industry operation. There are nonetheless growing concerns about the adequa