This note asserts that Eastern Europeand Central Asia is attracting more investment toinfrastructure projects with private participation than anyother developing region except Latin America. Members of theEuropean Union (EU) and countries seeking membership accountfor most of the investment. The Russian Federation isemerging as a leader both in attracting private activity andin sponsoring projects in neighboring countries.Telecommunications and energy are the leading sectors. Butnew regulatory challenges are emerging as a result ofexclusivity periods in telecommunications and greater marketconcentration and vertical reintegration in energy.