The Dominican Republic has seen a boom in foreign investment in the energy sector in the first quarter of 2023, with figures that could exceed US$1 billion by the close of the year, leading the growth of foreign investment in the country.
According to the Central Bank, foreign direct investment in energy for the first quarter of 2023 amounted to US$272.5 million, showing a significant growth of 82.15% compared to the same period in 2022. This increase represents the highest investment recorded for a first quarter since 2010.
Projections based on current data suggest that if this investment trend continues, the Dominican energy sector could surpass the US$1 billion barrier by the end of 2023. These figures are supported by the existence of several projects in early stages of construction, including renewable sources and conventional thermal plants.
The United Nations Conference on Trade and Development (UNCTAD) World Investment Report 2023 has highlighted the Dominican Republic as an example of successful energy transition.
Investments in the sector
“The growth observed is a reflection of the confidence of foreign investors in the current government management and the electricity sector,” the UNCTAD report states. During the 2021-2022 period, foreign direct investment in energy amounted to US$1,031.60 million, surpassing the cumulative total in the 2016-2020 period, which was US$965.30 million. In just two years, it has surpassed the foreign direct investment received during four years.
The UNCTAD report concludes that the Dominican energy sector led the reception of foreign direct investment in the first quarter of 2023, followed by tourism and the trade and industry sector. Energy investment accounted for 25.47% of the total received, while tourism contributed 25.42% and trade and industry, 17.09%.