Green Fdi and Energy Self-Sufficiency in Eswatini an Econometric Assessment of Environmental Transition

Abstract

This study investigates the role of green foreign direct investment (FDI) in driving environmental sustainability and facilitating the green transition in Eswatini, an emerging economy characterized by limited industrial capacity, high dependence on imported energy, and growing vulnerability to climate change. Using econometric analysis in R, the study examines the relationship between inflows of green FDI and key environmental indicators such as carbon emissions, renewable energy adoption, and energy efficiency performance. The findings demonstrate that although Eswatini receives relatively modest levels of FDI compared to larger economies in Southern Africa, targeted green investments in sectors such as renewable energy, sustainable agriculture, and water management have a statistically significant and positive effect on improving environmental performance. The analysis further reveals that the country’s reliance on hydroelectricity, coupled with rising interest in solar and biomass energy, positions Eswatini as a potential hub for clean energy development in the region. However, the study also identifies structural challenges, including weak institutional frameworks, limited financial incentives, and infrastructural constraints, which impede the ability of green FDI to fully accelerate the country’s transition toward sustainability. The research concludes that strengthening regulatory policies, creating investment-friendly frameworks, and enhancing regional partnerships are critical to attracting green FDI and ensuring its alignment with Eswatini’s long-term development goals. By providing both scientific evidence and policy insights, this study contributes to the discourse on sustainable development in small emerging economies and highlights pathways through which Eswatini can leverage green FDI to balance economic growth with environmental stewardship.