New Research Findings
According to fDi Intelligence’s 2024 Annual Report, there were 16,427 global greenfield foreign direct investment (FDI) projects worth $1,337 billion in 2023, a 1.1% decrease in project numbers and a 4.4% increase in capital from 2022.? The three largest categories are renewable energy ($348 billion), electronic components ($114.7 bn), and coal, oil and gas ($93.9 bn).
Capital intensive sectors such as renewables, batteries, oil and gas, communications, and semiconductors dominate the top 10 largest sectors by capital investment. It signifies a new paradigm of FDI projects that require large amounts of capital and relatively low labor. These projects also tend to be riskier.
Geographically, in 2023, FDI activity also grew in the Asia-Pacific region and the Middle East while fell in Europe and North America. Chinese outbound FDI hit an al-time high, but the destinations of the investment showed diversion away from the West and into the developing world and nearshoring hubs.
SEZ project developments
- Spain: HVAC system manufacturer Hispacold is moving its operations to the Port of Seville’s free trade zone, an investment of about €4 million. (June 25, Sustainable Bus)
- Jamaica: The Multilateral Cooperation Center for Development Finance approved US $550,000 in financing for CAF’s partnership with the Jamaica Special Economic Zone Authority. The partnership supports the Jamaica Logistics Hub Initiative and the development of the Caymanas SEZ. (June 24, CAF)
- Indonesia: Indonesia’s Communications and Information (Kominfo) Ministry planned to build a second National Data Center in Nongsa Digital Park, a Special Economic Zone (SEZ) located in Batam, Riau Islands. Four other foreign investors, from Singaore, Hong Kong, China, and New Zealand, also intend to build data centers on the island. (July 1, Temp.co)
Africa
Tanzania
- The Export Processing Zones Authority (EPZA) has received increased capital investments and export earnings. In the last ten years, EPZA has received over $2 billion in capital injections and $2.5 billion in export earnings. The announcement was made during a visit to the Benjamin William Mkapa Special Economic Zone by Guinea Bissau’s President and the EPZA Director. (June 24, Daily News).
Nigeria
- A recent seminar aimed to strengthen Nigeria-China collaboration on SEZs. The Nigeria Customs Service, Nigeria Export Processing Zones Authority, Consulate General of the People’s Republic of China in Lagos, and Tianjin Economic-technological Development Area all took part in the seminar, during which Chinese experts shared best practices from China’s development journey. (June 25, The Guardian Nigeria).
- The Lagos Free Trade Zone has generated N115 billion (approx. US $76 million) in revenue for the Customs Service in the last six months, a substantial increase compared to 2023. (June 27, Nairametrics).
Ghana
- The Ghana Shippers’ Authority wants a demurrage-free port. At a meeting of the Southern Zonal Shipper Committee, participants voiced frustration over port delays, high demurrage fees, inefficiencies in cargo handling, and slow bureaucracy. (June 27, Graphic Business).
Asia and Pacific
Cambodia
- Delegations of Cambodian and Korean officials, led by Cambodian Deputy Prime Minister Sun Chanthol and Ambassador of Korea in Cambodia Park Jung-Wook held a discussion for the establishment the Cambodia-Korea Special Economic Zone. The Cam-Kor SEZ was first proposed during a meeting between Prime Minister Hun Manet and President Yoon Suk Yeol in May. During the meeting, Chanthol requested collaboration from Korea for pushing more investors to the Cam-Kor SEZ and for allowing the Cambodia delegation to tap investors in Korea. (June 25, Khmer Times)
- The Royal Group Phnom Penh SEZ has raised $9.96 million in capital from its green bond listing at the Cambodia Securities Market (CSX) to build a wastewater treatment plant and its infrastructure. The bond, named “PPSP Green Bond”, was publicly listed at the Cambodia Securities market on June 28. The bond is public-guaranteed by the Credit Guarantee & Investment Facility of the Asian Development Bank. The issuance and listing of the green bonds have also received technical assistance, financial support and enhancement on investment support through the “Cambodia Sustainable Bond Accelerator (CSBA)” program, led by UN ESCAP. (June 29, Khmer Times)
Vietnam
- The National Assembly formally approved the establishment of the Da Nang Free Trade Zone, to be located near the Lien Chieu Seaport currently under development. The resolution will come into effect on January 1, 2025. Investment projects in the FTZ will enjoy preferential policies similar to those located in economic zones, contrary to the initial proposal of the Da Nang city government, which sought a new FTZ model that offers additional incentives to economic zones, grants greater policy and regulatory discretion to the municipal government, and pilots a sandbox for trading blockchain assets. (June 26, Vietnam Net)
China
- Warehouses and industrial parks in China are facing a slowdown in business activity, with vacancy rates climbing from around 2% in 2021 to 19.2% in the first quarter this year. Heightened geopolitical tensions prompted offshoring among foreign manufacturers and slowed down cross-border trade, reducing businesses’ need for storage facilities. Multinational science and technology companies located in industrial parks are also shifting out of China following a disappointing post-pandemic recovery. The downturn puts downward pressure on rents, and multiple Singapore-listed real estate investment trusts (REITs) experienced underperformance compared to the broader stock market. (June 27, Bloomberg)
Azerbaijan
- From June 27-28, the Azerbaijani Ministry of Economy organized the "New Opportunities for Entrepreneurs: Let's Build Karabagh Together" event as a part of the Great Return Program. The program is a comprehensive initiative aimed at the reconstruction of the Karabakh region and the return of internally displaced persons to the border region following the cease-fire of the Armenia Azerbaijan conflict. A part of this program includes developing modern trade and logistic centers and economic zones in the border region. Investments are supported by favorable conditions such as residency status for investors and certain tax exemptions. (June 30, Azer News)
Americas
Peru
- During her visit to China, Peruvian President Dina Boluarte announced that her government is considering a decree to designate the Chancay mega-port, built by Cosco Shipping, as a special economic zone. This would provide tax incentives to companies that invest in the area and stimulate economic growth. The move is part of a broader strategy to establish Peru as the leading logistics hub in the South Pacific. Boluarte emphasized that the initiative is in line with the goals of economic growth, social benefits and respect for the environment. (June 27, El Comercio)
Uruguay
- PTP Group has announced an $80 million investment in a new port and free trade zone at Punta Arenal in Soriano, Uruguay, with $40 million for port infrastructure and another $40 million for storage facilities. The project, located on a 266-hectare site to be acquired in 2021, aims to create a logistics terminal on the Paraná-Paraguay waterway with a 600-meter dock for Panamax vessels and Mississippi-sized barges. The development will include terminals for various bulk and containerized goods. The project is expected to handle more than 5 million tons of cargo annually, boosting regional logistics and trade. (June 24, Portal Portuario)
Ecuador
- Ecuador's President Daniel Noboa is preparing for an official visit to Qatar, as revealed by Minister Sonsoles García, following a meeting with the Qatari ambassador. The visit aims to enhance economic cooperation and bolster Qatari investments in Ecuador’s free zones. The two countries discussed increasing trade and investment, particularly in sectors like mining, energy, and agriculture. Qatar has shown significant interest in Ecuador’s free zones, with potential growth in exports of products such as bananas, roses, and cacao. In 2022, Ecuador's exports to Qatar totaled USD 22.1 million, highlighting strong trade ties. (June 14, America Economia)
Trinidad & Tobago
- Trinidad and Tobago's Minister of Commerce Paula Gopee-Scoon has announced the proclamation of the Special Economic Zones regime, which will replace the existing Free Zones regime, with the aim of attracting local and foreign investment. The announcement was made during the signing of a MoU with the Unit Trust Corporation to advance the ScaleUp TT initiative to support SMEs. Underscoring the importance of SMEs to the economy, Gopee-Scoon highlighted various programs to support business growth and development, such as the SME Long-term Loan Guarantee Scheme and the Export Booster Initiative. (June 30, Daily Express)
Middle East
Saudi Arabia
- Consulting firm TMF Group has acquired some divisions of Proven, a Saudi Arabia-based outsourcing company. Following this acquisition, TMF Group is offering services to firms looking to establish a presence in Saudi Arabian SEZs and recently released an explainer on Saudi Arabia’s SEZ regime. (25 June, Mondaq)
Oman
- Tourism projects worth over OMR2 million (approximately US $5.2 million) are underway in the Duqm Special Economic Zone. Investments in roads, water infrastructure, and electricity are being made. (29 June, Times of Oman)
