Work

Foreign direct investment can enhance the development of clean energy in countries with critical materials

Year: 2025

Type: article

Abstract: Foreign direct investment is a critical material extraction and revenue generation tool, but its role in reducing clean energy vulnerability is often overlooked. Here, we use the clean energy vulnerability index and explore how foreign direct investment mitigates energy shortages in countries abundant in critical materials such as bauxite, cobalt, nickel, manganese, and platinum. We found that from 2016 to 2021, foreign direct investment controlled large portions of critical materials in vulnerable countries, with 56% of bauxite, 59% of cobalt and nickel, 52% of manganese, and 57% of platinum. Redirecting 40% of foreign direct investment-controlled production towards the deployment of clean energy could reduce energy vulnerability in the Democratic Republic of Congo, Indonesia, South Africa, and Guinea. The foreign investment redirection could enhance global energy transition equity, offering a strategic pathway for aligning with sustainable energy goals. Redirecting 40 percent of foreign direct investment towards the deployment of clean energy could reduce energy vulnerability in the Democratic Republic of Congo, Indonesia, South Africa, and Guinea, according to an analysis that uses the clean energy vulnerability index and materials production data.

Source: Communications Earth & Environment

DOI: 10.1038/s43247-025-02319-9

Authors: Jean Pierre Namahoro, Wu Qiaosheng, Deyun Wang, Zhou Na

Institution: China University of Geosciences

Language: English

Topic: Global Energy Security and Policy

Subfield: General Energy

Field: Energy

Domain: Physical Sciences

SDGs: Industry, innovation and infrastructure, Affordable and clean energy, Climate action, Decent work and economic growth

Open Access status: gold

Estimated APC paid: $3,490