“Low-carbon FDI is significant and its potential huge,” says the United Nations Conference on Trade and Development (UNCTAD) in its latest report, released on Thursday.

The World Investment Report-2010,  had a special focus on ‘investing in a low-carbon economy’. It estimates that ‘FDI flows into three key low-carbon business areas -- renewables, recycling, and low-carbon technology -- will amount to 'roughly $90 billion.’ However, the report gives no country-specific data.

The report also mentioned that new players are emerging in the low-carbon foreign investment. According to report, “A quarter of the Greenfield investments in alternative/renewable power generation were in developing economies including India and Pakistan.”

The report said that areas where such foreign investments can have major and direct emission-reducing impacts include power and industry sectors, transport, buildings, waste management, forestry and agriculture sector.

It also said the South Asia was the first to bottom out from the current downturn in terms of attracting FDI inflows. India remained in the list of top ten countries in 2009 to have the highest FDIs in the world. “India climbed four notches to be ranked the ninth most attractive investment destination in 2009 with a total foreign direct investment inflow of $34.61 billion,” the Geneva based UN body said in the report.

Among the largest FDI recipients China rose to second place after the United States in 2009.

“The global FDI flows are expected to recover slightly this year.” The Report said the global FDI flows are expected to pick up to over 1.2 trillion U.S. dollars in 2010, rise further to over 1. 3 trillion dollars in 2011, and head towards more than 1.6 trillion dollars in 2012.

Read the report