Foreign direct investment and political stability as determinants of renewable energy consumption in the East African Community

Renewable energy is essential for sustainable development. It provides a cleaner alternative to conventional energy sources with minimal greenhouse gas emissions. This study investigates the impact of foreign direct investment (FDI), trade openness (TO), CO2 emissions, urban population (UP) and political stability (PS) on renewable energy consumption (REC) in the East African Community (EAC). It employs panel data techniques using annual data covering the period from 2013 to 2021. The findings reveal that both political stability and urban population growth have a negative and significant impact on renewable energy consumption in the EAC. Political instability deters investment in renewable energy projects, while rapid urbanization increases reliance on conventional energy sources—an effect compounded by inadequate renewable energy infrastructure and weak policy frameworks. CO2 emissions have a significant negative impact, stemming from fossil fuel dependence, underdeveloped renewable infrastructure, and ineffective renewable energy policies. However, FDI and TO have a positive but insignificantly influence REC in EAC. The novelty of this study lies in its integrated examination of foreign direct investment and political stability as determinants of renewable energy consumption in the East African Community, including fragile and conflict-affected states that are often overlooked in prior research. Policymakers should align climate and energy policies, set enforceable renewable energy targets, adopt carbon pricing, and invest in clean infrastructure. Decentralized urban energy solutions and risk mitigation tools, such as political risk insurance and investment guarantees, are also critical for expanding renewable energy in fragile contexts.