Restrictions versus return

Independent power project developers continue to face a variety of challenges and issues as global power markets mature. Topping the list of concerns is dealing with non-US utilities that are trying to cope with private developers entering the utilities` markets. For developing nations, whose utilities are predominantly state-owned, giving up control of generation to foreign companies can be a difficult challenge. For US developers, part of the solution lies in patience and persistence. Being able to demonstrate the ability to work within the boundaries of the countries` laws and work with the hosts are crucial. Another issue facing developers is the restriction placed on rate of return. Few in the power generation industry are unfamiliar with the Chinese situation, though recently the government revised its policy when developers balked at the prospect of a cap on returns. Nations which have imposed restrictions have come to realize that if outside investment is going to come in, investors need to earn an adequate return.