Determinants of international development investments in renewable energy in developing countries

International development organizations and financial institutions provide financing for renewable energy expansion in developing countries. The eligibility for and success of these investments depend to a great extent on the regulatory, economic and sociopolitical environment in the recipient countries. This research explores what role these characteristics of developing countries play in attracting investments from international devel-opment financing sources. The study uses panel data from 2010 to 2017 for 86 developing countries from different regions of the world. It also explores the heterogeneity of the drivers in countries of different levels of economic development. The study finds that the regulatory support for renewable energy plays a significant role, as do FITs, tendering and public investments. Lack of access to electricity or clean cooking energy, or low levels of renewables in the energy composition do not attract development funds. High energy dependence however has a positive impact. Policy instruments and country characteristics affect the inflows of loans and grants differ-ently. The findings have implications for policy makers in both the donor and recipient countries, regarding how development funds can be channeled more effectively to attain SDG 7 and climate goals in the developing countries.