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Egypt among top 10 developing economies by int’l investment in renewable energy
Egypt is among the top 10 developing countries with the highest levels of international investment in renewable energy, investment in renewables represents between one tenth and one third of total foreign direct investments (FDI), according to a recent report by the UNCTAD.
The top 10 countries also include Brazil, Vietnam, Chile, India, Kazakhstan, Taiwan, Mexico, Indonesia, and Morocco, the World Investment Report 2023 said.
The report shows that more than 30 developing countries still haven’t registered a large international investment project in renewables.
While developing countries need about $1.7 trillion each year in renewable energy investments – including for power grids, transmission lines and storage – they only attracted about $544 billion in 2022.
The cost of capital is a key barrier to energy investments in developing countries, which are seen as riskier. Partnerships between international investors, the public sector and multilateral financial institutions can greatly reduce the cost of capital.
Bringing in international investors, for example, lowers the spread on debt finance by 8%. Adding multilateral development banks (MDBs) lowers it by 10%. And combining the two with governments in public-private partnerships reduces it by 40%.
Although most developing countries have set targets for transitioning to sustainable energy sources, only one third of them have turned the targets into information on investment requirements.
The report highlights the importance of lowering the cost of capital for clean energy investments in developing countries and supporting them more in their investment planning and project preparation.