Renewable energy investment and corporate dividend policy: An empirical investigation (Computational Finance & Economics)

Summary

• The study collects survey data from 400 shareholders of manufacturing companies in Nigeria to assess dividend policy as a renewable energy funding option.p.1
• Nigeria aims to reduce greenhouse gas emissions by 20% (and conditionally by 47%) by 2030, targeting net-zero emissions by 2060.p.2
• Global corporate dividends reached an all-time high of $1.66 trillion in 2023, while Nigerian corporations declared $204 billion.p.3
• The Green Climate Fund approved co-financing of $170.9 million (N70.69 billion) for the AfDB's LEAF program in July 2021.p.4
• The structural model shows that the evaluated exogenous constructs account for an R-square value of 0.042 (4.2%) of the variance in Renewable Energy Investment.p.10

Key insights

1. Nigeria's energy sector represents approximately 65% of the country's total greenhouse gas emissions.p.2
2. Global clean energy technology and infrastructure investments are projected to reach $2 trillion in 2024.p.2
3. Using 2.5% of the $204 billion in corporate dividends declared in Nigeria would fully bridge the nation's $5 billion annual ETP funding gap.p.3
4. Private equity is primarily deployed during the early development stages of renewable energy projects, whereas debt financing dominates stable, mass-deployment stages.p.4
5. Setting a dividend policy (SDP) positively and significantly impacts renewable energy investment, demonstrating that proper strategic alignment can optimize green investment policies.p.9
6. The direct relationship between general corporate dividend policy (CDP) and renewable energy investment is positive (beta = 0.074) but statistically insignificant (p-value = 0.190).p.9
7. The signalling explanation (TSE) construct records an importance value of 0.057 (5.7%) and a performance score of 74.359 in the IPMA framework.p.11