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Investing in sustainable energy for all!
UNCTAD has published the World Investment Report 2023 on the ever-widening annual investment gap faced by developing countries in order to reach the Sustainable Development Goals (SDG) by 2030.
In the report, it was announced that the Sustainable Development Goals (SDG) were accepted and this difference, which was 2.5 billion USD in 2015, now reaches approximately 4 billion USD per year. It was stated that developing countries need approximately $1.7 billion in renewable energy investments each year, but only $544 billion in clean energy in 2022 attracts Foreign Direct Investment (FDI).
In the international FDI 2022 report last year, the impact of the 12% decline and the trends between investment policy and the capital market on the Sustainable Development Goals, especially clean energy, was clearly seen. It was also noted in the report that most of the money was diverted to developed countries, as investments in renewable energy have nearly tripled since 2015. In this context, the report proposes a compact arrangement that identifies priority actions ranging from financing mechanisms to investment policies to ensure sustainable energy for all.
Despite the decline in Foreign Direct Investment, project announcements reached bright spots.
The report also states that after a strong recovery in 2021, the main reason why FDI fell by 12% in 2022 to $1.3 billion; overlapping global crises, the war in Ukraine, high food and energy prices, and rising public debt.
While the decline experienced was 37% in FDI and around 378 billion dollars, it is seen that developed economies were most affected by this situation. On the other hand, while flows to developing and less developed countries have decreased, it is stated that they have increased (unevenly) by 4% in a few large and developing countries that have attracted the most investment.
Announcements of greenfield investment projects increased by 15% in 2022, while many regions and sectors showed growth.
Industries tackling supply chain challenges, including electronics, automotive and machinery, have seen an increase in projects, while investments in the digital economy sector have slowed. On the other hand, an increase was observed in international investment capacity for renewable energy production, including solar and wind energies. Therefore, the projects announced especially in battery production tripled in 2022 and reached 100 billion dollars.
The report noted that large oil companies are gradually selling their fossil fuel assets to small operators (mostly non-public private equity firms and lower disclosure requirements) at a rate of approximately $15 billion per year.
YASED Undertakes the UNCTAD World Investment Report 2023 Türkiye Launch
YASED President Engin Aksoy delivered the opening speech of the UNCTAD World Investment Report 2023 Turkey launch hosted by YASED. Later, Amelia U. Santos-Paulino from UNCTAD's Investment Research Division shared the relevant details of the World Investment Report 2023.
Santos-Paulino provided some important information in this year's report, "Investing in Sustainable Energy for All". Emphasizing that international investments, especially in the field of renewable energy, have tripled since 2015, Santos-Paulino underlined that much more investment is needed. During the presentation, Santos-Paulino stated that within the scope of the World Investment Report, International Direct Investment (FDI) flows are categorized on the basis of projects as greenfield investment, international project financing agreements, and cross-border mergers and acquisitions. She also emphasized that the 15 percent increase in the number of greenfield investment projects is a promising development for the future.
