Evaluating investment risks in overseas renewable energy projects: A WSR and D‐AHP based approach

Abstract

Investing in renewable energy is vital for reducing carbon emissions, yet it also poses significant risks and uncertainties. This study proposes a novel approach to evaluate investment risks in overseas renewable energy projects. First, we apply the Wuli–Shili–Renli (WSR) methodology to develop an evaluation index system for investment risks at three levels—Wuli, Shili, and Renli. Second, a risk assessment framework combining D‐AHP and TOPSIS method is constructed to solve the problem of uncertainty in evaluation information resulting from variations in expert experience. Then we can obtain the risk value. Finally, we apply our approach to evaluate the ADAMA Wind Power Phase I Project in Ethiopia. Our findings reveal a medium risk value for the project, with the highest risk at the Shili level. The management risk is the most significant risk factor, consistent with reality. Our proposed method can effectively address information uncertainty in assessing investment risks of renewable energy projects and is applicable to other similar projects.