Investment policy - MC Edited

Investment Policy

References

Investment policy plays a massive role in fostering clean energy investments. At its core are instruments promoting equal treatment of foreign and domestic investors. Contract enforcement measures as well as policy steps fostering stable and reliable access to land are also key to alleviate the political, regulatory and financial risks commonly encountered in emerging and developing economies.

Click below to learn about policy levers and discover associated case studies:

Intellectual property rights for clean energy technologies

Equal treatment of foreign and domestic investors in clean energy

Contract enforcement and land rights

This includes:

Intellectual property rights for clean energy technologies

• Setting up ‘fast-track’ processes for patenting clean energy technologies

Policy measures taken by the government to protect intellectual property rights and facilitate patenting of innovations in clean energy.

Equal treatment of foreign and domestic investors in clean energy

This includes:

• Lifting restrictions on FDI in the electricity sector and for clean energy technologies

• Careful use of local content requirements (LCRs)

• Measures ensuring repatriation of profits from international investors

Restrictions on foreign direct investment (FDI) are likely to result in sub-optimal flows of investment for clean energy. Emphasis should be given to assess the extent of foreign ownership restrictions in clean energy, carefully leveraging local content requirements (LCRs), as well as ensuring capital repatriation for international investors.

Contract enforcement and land rights

This includes:

• Steps to ensure that contracts between clean energy producers and their partners are enforced

• Judgements made publicly available

Policy steps ensuring that contracts between clean energy producers and their partners are enforced, public availability of judgements as well as facilitates process for registration, permitting and access to land for renewable energy deployment.

• One-stop-shops for property registration

• Facilitating co-ordination between the different institutions involved in the property registration process

• Linking agencies electronically for permitting processes

References

• IRENA. (2016). Unlocking Renewable Energy Investment: The Role of Risk Mitigation and Structured Finance.
• Ministry of International Cooperation, Arab Republic of Egypt. (2022). Sharm El Sheikh Guidebook for Just Financing.
• OECD. (2015). Policy Guidance for Investment in Clean Energy Infrastructure.
• RES4Africa and PwC. (2021). Assessing Investment Risk in Renewable Energy.
• UBS. (2023). Risks and Rewards for Renewable Energy Investors.
• UNDP. (2013). Derisking Renewable Energy Investment.

• Convergence. (2023). State of Blended Finance.
• Friedemann, P.; Egli, F.; Steffen B.; Schmidt, T. (2019). How Do Policies Mobilize Private Finance for Renewable Energy?—A Systematic Review with an Investor Perspective.
• GFANZ. (2021). Actions to Mobilize Capital to Emerging Markets and Developing Economies.
• Group of Experts on Energy Efficiency, United Nations Economic Commission for Europe. (2022). Leveraging Financial Mechanisms for Increased Investment in Energy Efficiency.
• IEA. (2023). Scaling up Private Finance for Clean Energy in Emerging and Developing Economies.