Across Europe, much of 2022 was overshadowed by Russia’s invasion of Ukraine and its reverberations across the continent. The war quickly triggered a refugee crisis, an unprecedented number of sanctions against Moscow, a surge in energy prices and a general feeling of uneasiness among investors. Coupled with inflation, the end of rock-bottom interest rates and the easing off from the peak of the Covid-19 pandemic, foreign direct investment (FDI) faced a challenging backdrop.

However, data from fDi Markets paints a resilient picture. Project announcements across Europe last year totalled 6305 — marginally down from 2021 and the record highs of the pre-pandemic years, but around 5% higher than the average number of foreign direct investment (FDI) projects announcements in the 10 years to 2022.


Last year’s figures were dampened by the all-but-disappearance of Russia, which is typically one of Europe’s top 10 FDI recipients, after its expulsion from the global economic order. However, this was partially offset by a handful of countries that had exceptional FDI performances. The standout was Portugal, which posted a 76.9% increase on its 2021 project announcements, while the UK, Ireland, Poland and Italy all made smaller gains.

Europe’s slice of the global FDI pie shrank in 2022, accounting for 41.2% of project announcements, down from 49.2% the year prior. However its share is nearly twice as large as its closest competitor, Asia-Pacific, which attracted 22.1% of announced projects.

Dawn of the mega-projects era

While project announcements are down, a different picture emerges when looking at capital expenditure (capex). According to fDi Markets’ preliminary figures, 2022’s total capex hit $332.9bn and the average pledged capex of each FDI project surged to $52.8m. These are the second-highest levels on record, being outdone only by the heady pre-financial crisis days of 2008. Meanwhile, the number of investments valued at $1bn or more hit a record-high of 47. Figures like these suggest FDI in Europe is being powered by a wave of large-scale projects, creating a more concentrated market dominated by larger, well-established companies. 

Renewables is one of the key drivers. Project announcements last year were up marginally, but capex more than doubled to reach $130.5bn, which represents 39.2% of Europe’s total inbound FDI. Throughout 2022, fDi Markets tracked 23 renewable investments above $1bn, up from just five the year prior. They include Marubeni and EDP’s development of offshore wind farms in Scotland, and Finnish firm Neste’s $2bn expansion of its biomass project in Rotterdam, in the Netherlands. Renewables projects’ average capex was $494.2m, which is 65% higher than any other year on record. However, time will tell if the investors making these bold capital pledges can follow through on their plans.

The UK and Spain continue to propel renewables investment, but other countries are starting to make a mark. Last year, Italy more than doubled its inbound renewables capex, while an influx of wind and solar projects in Romania made it one of Europe’s top five recipients of renewables FDI. In January 2023, the European Commission announced plans to further support the sector via a Green Deal Industrial Plan, which promises to loosen restrictions on subsidies and increase funding for research and innovation.


Two other sectors pushing Europe’s new dawn of mega-projects are logistics and automotive. Figures from fDi Markets show that project announcements in transportation and warehousing were flat in 2022, but capex grew by 53%. Even as the pandemic recedes, e-commerce shows no signs of slowing down. Against this backdrop, the US’s GXO Logistics invested in seven European countries last year, while DHL and FedEx Express also aggressively expanded their footprint across the continent.

The automotive original equipment manufacturer (OEM) sector staged an impressive comeback last year, after being pummelled during the pandemic when lockdowns took cars off the roads. Data from fDi Markets show the sector mobilised $17.8bn in FDI across 72 project announcements. The big-ticket investments are, of course, in electric vehicles (EV) as the EU pushes ahead with plans to ban the sale of combustion engine cars by 2035. fDi Markets tracked seven EV investments valued at $1bn-plus, which were announced by a combination of traditional automakers, such as Volkswagen and Volvo, and EV specialists Tesla and Germanys Next.e.GO Mobile.

Two traditionally strong sectors that saw investment nosedive were real estate and semiconductors. In 2021, they were Europe’s second- and third-biggest recipients of FDI, respectively. However, last year property investment slumped by more than half and semiconductors by nearly one-third. The latter, however, was responsible for Europe’s biggest investment announcement of 2022: Intel’s injection of €12bn into its Irish operations.

This article first appeared in the European Cities of the Future supplement of the February/March 2023 print edition of fDi Intelligence