Attracting Foreign Investments for Green Energy Projects in Subsaharn Africa: Climate Change Policy & Innovation in International Legal Compliance
Lewis, Leslyn Ann
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Sub-Saharan Africa must confront the dual problem of development coupled with the complexities surrounding climate change. The regions stagnated growth has been historically attributed to many factors, but the predominant thought from an international law perspective is that if the region modernizes its legal and regulatory structures this will engender the confidence of foreign investors. With this acknowledgement came the demand on developing nations to modernize local legal and regulatory systems initially focusing on globally harmonized intellectual property rights and then more recently their energy regulatory infrastructures and processes to attract foreign investments. Several international organizations and institutions including the WTO, World Bank and the UN have recommended energy policies to hasten sustainable development in the sub-Saharan region. The recommended policies have been implemented by many sub-Saharan African nations with little change in attracting foreign investors to fund these projects. Despite international commitments, sub-Saharan African nations have not been the beneficiaries of these initiatives, while countries like China, India and Mexico have received an influx of foreign investments within the green energy sector. Two main issues arise from the lack of foreign investments. First, do flexibilities need to be built into international trade and climate change Agreements to encourage developing countries down a sustainable development path? The second issue is whether there are local and regional factors that affect a countrys ability to attract foreign direct investments (FDI), particularly those focused at climate change abatement projects? Sub-Saharan African countries like Ghana, West Africa have implemented new energy policies like the Feed-In Tariff (FIT) model, but still have not enjoyed increase foreign investments in renewable energy projects. Will the energy sector mimic the pharmaceutical sector where promises of investments were made if countries harmonized their laws, but failed to deliver rewards for these modernization initiatives? Or are there lessons to be learnt regarding local practices, policies and structures that must be modified in order to attract foreign investments. This thesis will examine the local factors beyond modernization efforts within the energy sector that may negatively impact on foreign investors willingness to undertake green energy projects within the region within the context of international trade and climate change Agreements. It will use Ghana as a case study to explore some of the issues and regional concerns that explain the reluctance of foreign investors to initiate green energy projects.