FDI and Renewable Energy Adoption in Developing Countries
1 Aim of the Study
This study aims to investigate whether net Foreign Direct Investment (FDI) inflows stimulate the renewable energy transition or entrench carbon lock-in across Sudan, Egypt, Ethiopia, Kenya, and Uganda over 2000–2025.
2 Problem Definition
Developing economies face a structural trilemma: expanding industrial capacity while transitioning away from fossil fuels under constrained domestic capital budgets. This study evaluates whether incoming foreign capital acts as an eco-technology conduit (Pollution Halo) or exploits regional regulatory asymmetries (Pollution Haven).
4 Study Variables and Data Sources
The study employs annual time series macroeconomics data covering the period 2000 to 2025. All series are sourced directly from the World Bank World Development Indicators (WDI). The model specifies renewable energy consumption as the dependent variable, evaluated against foreign direct investment, official development assistance, industrial output, economic growth, and trade openness.
3 Social Implication of the Study
Following the perspective of Paulo Freire’s, international climate finance frequently reproduces the banking model of education. Climate finance practices treat the Global South communities as passive recipient accounts rather than sovereign entities Furthermore, unconditional debt-driven capital often embodies Freirean false generosity, perpetuating financial extraction while shifting environmental externalities to marginalized populations. Developing critical consciousness demands empirical scrutiny of these capital flows to transform raw economic metrics into actionable tools for democratic energy governance.