Investing in sustainable infrastructure: new directions for international business research

In the global economy today, there is both a supply-side push of large amounts of stimulus funding being directed at infrastructure investment and a corresponding demand-pull, with nearly all of the countries in the world committing themselves to the Sustainable Development Goals and to the transition to a net zero economy. In the energy sector, the pressure to rapidly increase the proportion of renewable capacity, primarily wind and solar, has created unprecedented opportunities for investment, but it also raises concerns about the availability of project finance investors to execute all of these projects, particularly in developing countries. We discuss three areas of future research that address the causes and remedies for such capacity constraints, namely, the structuring of project finance investment, demonstration effects, and the role of technological complementarities and leapfrogging in developing countries.