The Geneva summit between Ronald Reagan and Mikhail Gorbachev signaled the beginning of the end of the Cold War. With a diminished threat of East-West confrontation, countries throughout the world gradually reoriented their priorities (em away from politico-military security and toward economic development. To paraphrase Woodrow Wilson, the end of the Cold War had made the world "safe for capitalism."Now, 10 years later, with a few notable exceptions in the Balkans and elsewhere, evidence abounds to support that appraisal, from Argentina to Prague to Manila. And in no industrial sector is this new "liberation theology" more evident than in infrastructure development (em especially power generation.
In Asia for example, more power has been generated and consumed in the past five years than in the previous 15. Still, as power developers from Bombay to Budapest to Beijing will attest, the introduction of free-market principles in the power sectors of the world remains more a goal than a reality. The learning curve is steep (em both for governments and independent power (IPP) developers (em and success by no means assured. In this article I will try (em as one who entered this fray as a developer seven years ago (em to assess the future of the global IPP market, comment on the factors that account for the success of a few IPP developers and the failure of others, and identify countries with sensible policies that equitably share risks and rewards with investors, and thus present the most attractive climate for independent power projects in the years ahead.