Energy Transition and Investment Protection in the Global South: The Case of Mozambique

Climate change objectives call for a complete and urgent phasing out of fossil fuels, but countries adopting direct and indirect measures to achieve this objective are likely to breach their obligations under International Investment Law and the contracts they entered with foreign investors. In case of such breaches, investors, especially the carbon majors, have not hesitated to file claims under the relevant Investor-state Dispute Settlement systems (ISDS). The growing number of investor-state litigations and the staggering percentage of fossil fuel related claims have attracted the attention of many scholars who are pointing out the obstacles that such a regime can place (and is actually doing so) to achieving carbon neutrality. This debate is particularly heated in lower-income countries that are heavily dependent on foreign capital influx. Adopting a Global South perspective, this research review Mozambique’s investment regime with the objective of determining the risk of investor-state disputes in the booming fossil fuel industry.