The UK had the third-most announced greenfield foreign direct investment (FDI) projects between January 2022 and September 2025, according to a new report. Around two-thirds of announced FDI projects during this period were in the clean energy and AI sectors.
The US came first, followed by India, which had the same number of announced projects as the UK. Adjusted for inflation, flows into the UK during this nearly four-year period averaged $85bn (£63.29bn) a year, a 40% increase over pre-pandemic levels, according to the McKinsey report ‘Welcome to the UK: How can FDI help reignite the country’s growth’.
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Megadeals – projects with a value of $1bn or more – were also a major feature of announced FDI projects. These can be explained by the high capital intensity of the clean energy and AI sectors, which drove flows. Less than ten megadeals now account for around 40% of inward greenfield FDI in the UK.
In the energy sector, the UK still faces a difficult situation, as it has the highest energy prices in the OECD. The report suggests that the challenge does not just lie in increasing supply, as updating existing networks to improve storage, transmission and distribution infrastructure is necessary to address structural challenges.
Despite these obstacles, announcements of greenfield FDI clean energy projects have soared, rising 80% from an average of $21bn per year between 2015 and 2019 to $37bn between 2022 and 2025. While announced FDI projects in fossil fuels have fallen by roughly 80%, projects in wind energy have almost doubled.
Regulatory and structural obstacles make executing these clean energy projects a challenge. Wind projects, which make up three-fifths of total announced FDI, face grid connection difficulties, high interest rates, inflation spikes, labour shortages, planning delays and supply chain bottlenecks. The report notes that these factors mean “the pipeline of announced projects may be at greater risk than in other sectors”.
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By GlobalDataThe analysis comes in the midst of a record wind power auction by the UK Government. German utility firm RWE secured 7GW of the 8.4GW secured in the sale. On 14 January, RWE announced it would partner with US private equity firm KKR to deliver on the wind energy projects.
In terms of the digital economy and AI, investment into the UK has boomed, matching global trends. Announced projects in communications and software have seen flows increase by 60% since 2022, while data centre investment in the past three years has grown by 115% compared to the previous period.
The report suggests that the continual growth of this industry is tied to the energy sector, as it is energy-intensive and will require more grid capacity. It also highlights some growth spots for the advanced manufacturing sector. While it makes up less than 10% of the UK’s FDI inflows, projects in the electric vehicle and defence sectors suggest areas for development.
The biggest foreign investors in the UK in the past three years were the US and Europe, accounting for 80% of announced projects. The report notes that, worldwide, the geopolitical distance between FDI partners has lowered. While the UK’s investment partners were already geopolitically similar, this has narrowed even further over the past few years. It suggests tapping into other economic partners such as advanced economies in Asia and the Middle East to diversify the country’s FDI sources. Inflows from the former have doubled since 2022.
Last summer, the Department of Business and Trade released a report revealing that FDI project numbers in the UK reached a record low between 2024 and 2025. Like the McKinsey report, it also noted that the value of individual deals had grown, largely driven by investments in the digital economy.
