The Accelerated Transition to Renewable Energy

The COVID-19 pandemic has catalyzed the global shift toward net-zero emissions, making renewable energy a prime focus for foreign direct investment (FDI). As industries and countries race to reduce their carbon footprints, the timing is ideal for investment in renewable energy and alternative power sources. This sector has matured significantly, attracting increasing interest from global investors.

Surge in FDI in Renewables

According to GlobalData’s FDI Projects Database, FDI into greenfield renewables and alternative power projects grew by 40% from 2019 to 2021, rising from 444 projects worldwide in 2019 to 789 in 2021. Provisional data for 2022 indicates that this upward trend continues, with 811 projects recorded between January and October. This growth highlights the sector’s evolution over the past decade, with technologies like wind and solar gaining a firm foothold in investor portfolios. Of the 2,606 greenfield projects between 2019 and 2022, 38% were in photovoltaic solar power, and 37% were in onshore wind power.

European Leadership in Renewable FDI

European investors have been the driving force behind cross-border investments in renewables and alternative power. Between 2019 and 2022, European countries dominated the top ten investor rankings, with the UK slightly surpassing Germany in 2022. France, Italy, and Spain consistently followed, ahead of the US. While the US and Canada are the only non-European countries in the top ten, the US has consistently been the top destination for greenfield renewables and alternative power FDI, attracting up to 80 projects annually since 2019.

Diverse Global Destinations for Renewable FDI

The top destinations for renewable energy FDI are more geographically diverse. Brazil, Australia, and Chile ranked mid-tier in 2022, attracting significant project numbers, further illustrating the global momentum toward renewable energy investment.