Abstract

The global transition towards sustainable energy has significantly influenced patterns of foreign direct investment (FDI), especially in renewable energy sectors. This paper examines the evolving trends of FDI in renewable energy, with a focus on solar, wind, hydro, and bioenergy markets. Over the past decade, the renewable energy sector has emerged as a key destination for international capital, driven by global climate commitments, supportive policy frameworks, and the decreasing cost of clean energy technologies.
The study analyzes FDI flows across developed and developing economies, highlighting the increasing participation of emerging markets as both recipients and sources of green investment. Particular attention is given to how regulatory stability, government incentives, infrastructure readiness, and market size affect investor confidence and capital inflows. Case studies from countries such as India, Brazil, and Germany provide insights into successful investment attraction strategies and public-private partnerships.
The paper also discusses challenges hindering FDI growth in renewable energy, including policy uncertainty, grid integration issues, and financing gaps, particularly in low-income nations. Despite these challenges, the global FDI landscape is shifting towards cleaner and more sustainable investments, with multinational enterprises (MNEs) and institutional investors playing an increasingly active role.
This research contributes to the understanding of FDI as a tool for accelerating renewable energy deployment and achieving long-term environmental and economic sustainability. It offers policy recommendations to foster a favorable investment climate, enhance energy infrastructure, and ensure inclusive growth through green technology transfer.