regional investors are becoming more prominent in the electricity sectors, especially in Asia. But maintaining the momentum of the growth in financing from this source will take time and appropriate policies. Today, private participation in the electricity sector remains relatively low across developing countries. It is generally highest in power generation and lowest in transmission and distribution, which are usually regarded as a public service (Table 3.10). Participation also tends to be highest in the better-off countries. The role of the private sector is significantly larger in Latin America than in any other part of the developing world. The Middle East and South Asia have been much less successful or interested in attracting private capital. The ease of financing for electricity projects will continue to vary widely, according to the country in which the investment is made, the risk-return INFRASTRUCTURE TO 2030: TELECOM, LAND TRANSPORT, WATER AND ELECTRICITY - ISBN 92-64-02398-4 - © OECD 2006 3. OUTLOOK FOR GLOBAL INVESTMENT IN ELECTRICITY INFRASTRUCTURE Table 3.10. Share of countries with private participation in the electricity sector by developing region, 2004 (% of sample) Country Power generation Transmission and distribution Sub-Saharan Africa East Asia and Pacific Eastern Europe and Central Asia Latin America and Caribbean Middle East and North Africa South Asia Other countries Total developing regions Source: Estache and Goicoechea (2004). profile of individual projects, and whether the investment is in generation, transmission or distribution: In OECD countries, electricity companies will most likely remain relatively highly leveraged, i.e. they will keep their high debt-to-equity ratios. Returns on investment could fall as competition develops, which could drive up borrowing especially for the most leveraged firms and for power generation companies. Transmission and distribution will remain a relatively low-risk business, with returns remaining protected to a large degree by regulators. The co