The largest number of cross-border investments are understandably between the countries of the EU as a result of their economic integration. Amongst other countries, the flows from the United States to Canada, Japan to the United States, and the United States to the United Kingdom are quite significant. Overall Italy (1,034), United Kingdom (808) and United States (784) receive the maximum number of international investments, whereas Germany is the biggest originator of investments (1,193 investments across 54 countries) followed by United States (862 investments across 54 countries) and France (496 investments across 42 countries).

Approximately 70% of cross-border flows of finance into solar energy are directed at projects in developed countries. The conducive environment in developed countries consisting of mature institutions, developed energy markets, policy support and lower project risks, is likely to make them attractive destinations for foreign investments. Financial flows to solar projects in developing countries are driven largely by developed countries (53%) followed by international institutions (22%) such as development finance institutions, international climate funds and the like. Although these are spread across 93 countries, over half the transactions are directed at just 7 countries – Chile, India, Egypt, China, Mexico, Brazil and Jordan. The most significant financial flows between developing countries are South Korea – Chile, China – Thailand, Taiwan – China, Saudi Arabia – Egypt and Russia – Ukraine. In terms of origination, China (138), South Korea (54) and Singapore (44) are the most prominent developing countries that invest in solar projects in other developing countries.

International institutions play a significant role in directing international solar finance as it fits suitably with their objectives relating to climate change mitigation and adaptation, supporting development initiatives and improving energy access, among others. As may be expected, about 95% of their investments are in developing countries, largely consistent with the objectives of such organisations.  Solar projects in Egypt (18%), India (10%), Jordan (9%), Mexico (6%) and Chile (5%) are the largest recipients of investments by international institutions where these financial flows support the development of domestic solar energy.

Our forthcoming paper on solar energy finance will provide further insights on both domestic and international flows of finance in solar energy. It will examine the heterogeneous actors involved in these markets and the dynamics of their relationships across countries.