INVESTING in the development of China's energy-starved infrastructure looks as sure a thing as any investment in China. The money for projects is stacking up. George Soros is involved in two funds: a US$2.5 billion global infrastructure fund and Peregrine's $1 billion closed-ended fund. American Insurance Group, advised by two former World Bank officials, has conceived a $1.2 billion closed-ended fund and attracted $250 million from the Singapore Government in the process. These funds are likely to invest in a mixed bag of direct investments with hopes for future listings, by providing project finance as part of packages involving supranational bodies such as the Asian Development Bank and through buying listed and unlisted securities. However, successful investment in infrastructure projects in China seems to be less evident. Naturally, Hong Kong investors are leading the way. Li Ka-shing has made big investments in mainland ports and is now becoming involved in power projects, mainly through Yiu Wing International. Also there is Gordon Wu Ying-sheung's Consolidated Electric Power Asia (CEPA), which is involved in a number of projects in power generation. Hopewell Holdings, Mr Wu's other vehicle, is also involved in China power projects, including the second and third phases of Shajiao power station in Guangdong province. Major listed companies are getting involved. CITIC Pacific is leading investors towards a slice of a $4 billion project in Pudong and China Light and Power Co has been researching projects in Shandong province for almost a year. But the investments announced so far amount to only a tiny fraction of China's demands. The problem is not shortage of cash - the world is queuing up to invest - and the problem is not shortage of projects. The problem seems to be the absence of a streamlined system for deciding priorities and giving approvals. David Renton, London partner of law firm McKenna and Co, is advising China on how to organise its projects. He fears that before China has produced such a system, much of the cash being raised for infrastructure funds will be committing itself elsewhere in the region. ''The key thing for infrastructure funds is to identify the deals that are likely to happen,'' he said. ''You have got to find the projects with enough government support at various levels to get pushed through the consent process.'' Even with a smooth pitch, the consent process can be arduous, as developers and buyers fight over the rate of return and settle terms. ''Six months would be very quick; the consent process takes 12 to 24 months,'' he said. And if the wrong project is backed, then the whole process has been wasted. He fears that factionalism could derail some projects as provincial officials squabble over competing projects while others could be lost as the Central Planning Council comes to its own decisions about where foreign currency can be released. All this meant that projects seemed to require more permission and consent at a national level, said Mr Renton. ''That's okay for the Three Gorges project, but you simply can't do that for every 600 MW power project,'' he said. Economist Marc Faber, although insisting he is ultimately bullish, also believes that foreign money might quickly find new homes. Rising US interest rates represent a risk-free earnings source for US investors and once the stampede starts, it is likely to continue. The rising yields for US government bonds will likely lead to infrastructure investors demanding a higher return. ''Some governments might be unwilling to give them that,'' said Mr Faber. Another problem he has seen in other parts of the world and foresees locally is the political control of charges. With China struggling against high inflation, forcing power companies to keep their charges down could seem an easy way to keep industrial prices and inflation down, he warned. The charges were also an easy target for tax, he added. Mr Renton hopes that by designing a streamlined infrastructure projects agency, able to decide at what government level consents for different types of projects will need, China will be able to harness the funds which undoubtedly want to invest. ''At the moment, the Chinese are to a large extent relying on foreign investors to come forward with proposals,'' he said. ''We are suggesting a central organisation where national priorities are set.''