Analyzing Legal Framework Stability and Foreign Investment Incentives to Accelerate Green Energy Transitions in Developing South American Nations.

The transition toward sustainable energy in developing South American nations requires substantial capital deployment, yet political volatility and shifting legal frameworks present significant barriers to foreign direct investment (FDI). This study critically analyzes the relationship between regulatory stability, legal incentives, and the acceleration of green energy transitions across key emerging markets in South America. Through a comparative policy analysis, we evaluate the impact of tax exemptions, power purchase agreements (PPAs), land tenure laws, and international arbitration provisions on international investor confidence in utility-scale solar, wind, and green hydrogen projects. The findings reveal that while aggressive financial incentives attract short-term capital, long-term infrastructure commitment depends fundamentally on legal predictability, institutional autonomy, and clear de-risking mechanisms. Ultimately, this paper outlines a framework for balancing national regulatory sovereignty with investor protection, offering actionable recommendations for policymakers seeking to de-risk green energy markets and mobilize international finance to meet regional climate goals.

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Publication Details

Journal
Knowledge Commons (Lakehead University)
Published
2026-09-17
DOI
https://doi.org/10.17613/qfenx-7xg73
Primary Topic
Sustainable Finance and Green Bonds
Type
article
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Analyzing Legal Framework Stability and Foreign Investment Incentives to Accelerate Green Energy Transitions in Developing South American Nations.

Col. Dr. BIBIN PAPPEN BABU
Knowledge Commons (Lakehead University)
Sustainable Finance and Green Bonds
article

Analyzing Legal Framework Stability and Foreign Investment Incentives to Accelerate Green Energy Transitions in Developing South American Nations.

Col. Dr. BIBIN PAPPEN BABU
article en

Abstract

The transition toward sustainable energy in developing South American nations requires substantial capital deployment, yet political volatility and shifting legal frameworks present significant barriers to foreign direct investment (FDI). This study critically analyzes the relationship between regulatory stability, legal incentives, and the acceleration of green energy transitions across key emerging markets in South America. Through a comparative policy analysis, we evaluate the impact of tax exemptions, power purchase agreements (PPAs), land tenure laws, and international arbitration provisions on international investor confidence in utility-scale solar, wind, and green hydrogen projects. The findings reveal that while aggressive financial incentives attract short-term capital, long-term infrastructure commitment depends fundamentally on legal predictability, institutional autonomy, and clear de-risking mechanisms. Ultimately, this paper outlines a framework for balancing national regulatory sovereignty with investor protection, offering actionable recommendations for policymakers seeking to de-risk green energy markets and mobilize international finance to meet regional climate goals.

Knowledge Commons (Lakehead University)
UC San Diego Health System (US)
Openalex Percentile: Top 7%
Sustainable Finance and Green Bonds
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Analyzing Legal Framework Stability and Foreign Investment Incentives to Accelerate Green Energy Transitions in Developing South American Nations. — Col. Dr. BIBIN PAPPEN BABU · Knowledge Commons (Lakehead University) (2026) | TGRS Research Map | TGRS