Mediating Effect of Investor Confidence in-Between Factors Influencing Renewable Energy Investment: A Review and Proposed Model

Abstract

This review article discusses the various applications of the renewable energy investment factors for Pakistan, along with the mediators of investor confidence. Since the country is mostly experiencing energy shortages and more dependence on fossil fuels, it is urgent to switch to renewable energy for sustainable development. Even though the country abundantly offers natural renewables such as solar, wind, and hydropower, investments in these resources have not increased much. The researchers studied the effects of important factors influencing investment decisions such as government incentives, regulatory frameworks, access to financing, political stability, and stakeholder engagement. Apart from the government incentives, which are tax exemptions and subsidies necessary to create an investment-friendly environment, policy inconsistency and bureaucratic hurdles in policy enforcement usually frighten away potential investors. In the same way, a comprehensive regulatory framework becomes an excellent template for minimizing uncertainties and risks regarding renewable energy project planning and development. The study also contributed to formulating effective innovative financing avenues such as green bonds and Sukuk to further open up new investment opportunities. Political stability is another essential determinant, given that it defines investor confidence. This means that political unrest denies many potential investors a chance to invest in the economy. It also looked at how investor confidence mediates the increased investment in renewable energy when investor perceptions of safety and opportunity are improved. It proposes a comprehensive model linking these elements to show how they interact to influence investment levels. This research intends to enlighten the policymakers and stakeholders concerned with the most pertinent conditions for inducing investment in the renewable energy sector. The research findings sought to widen debate on the conception of sustainable energy solutions and translate it into practical, actionable recommendations that would enhance investment strategies driving economic growth and environmental sustainability in Pakistan.