India and ASEAN were the fastest growing recipients, with increases of 10 and 5 percent, respectively, and strong growth in project announcements, he said.
FDI inflows were higher in developing countries than in developed economies. Globally, FDI fell by 12% to $1.3 trillion in 2022 after a strong rebound in 2021 following the sharp decline due to the coronavirus pandemic, according to the report.
China, the world’s second largest host country for FDI, recorded a 5% increase. FDI in the Gulf region declined, but the number of project announcements increased by two-thirds.
“Inflows to many smaller developing countries have stagnated and FDI to least developed countries (LDCs) has declined,” he said.
Stressing the need to focus on investment in sustainable energy for all as “much of the growth in international investment in renewable energy has been concentrated in developed countries”, UNCTAD called for support urgent need for developing countries to close the gap by attracting massive investments in clean energy. The report also shows that the investment gap across all Sustainable Development Goal sectors has nearly doubled since 2015 to 2022,” he said.
On finance, the report calls for the de-risking of energy transition investments in developing countries through loans, guarantees, insurance instruments and public sector equity – through public-private partnerships and blended finance – and multilateral development banks. He also mentioned a “new climate-aligned negotiating model”.
According to the report, the investment gap across all Sustainable Development Goal sectors has grown to more than $4 trillion a year from $2.5 trillion in 2015.
The biggest gaps are in energy, water and transport infrastructure. This increase is the result of both under-investment and additional needs.