Outward foreign direct investment from South Africa’s energy sector and the transfer of environmentally sound technologies to Uganda’s energy sector

Following the end of apartheid in 1994, outward foreign direct investment (OFDI) from South Africa has been on the increase. However, the content of South African OFDI has remained an understudied topic. This article explores whether intra-regional flows of FDI from emerging African countries carry environmentally sound technologies (ESTs) to developing African countries. It examines whether and how OFDI from South Africa’s energy sector transfers ESTs to Uganda through a firm-specific case study of Eskom Enterprises and its subsidiary, Eskom Uganda Ltd. It employs secondary data from literature sources and primary data from interviews.The research results indicate that OFDI can be a carrier of ESTs from emerging African countries to developing African countries. The case study demonstrates that OFDI from South Africa’s energy sector has transferred ESTs to Uganda’s energy sector. Explicit firm-specific policies and host-country environmental policies have promoted international standards certification and transfer of ESTs. Therefore, countries and transnational corporations (TNCs) can direct OFDI flows from emerging African countries to the transfer of ESTs, thereby helping to mitigate climate change effects and promote sustainable development. It is recommended that future studies be undertaken to focus on the transmission of ESTs by African TNCs targeting other sectors and countries.