During the week of 22 September 2025, States once again met in Vienna under Working Group III (WGIII)...
The global transition to renewable energy systems will be mineral intensive and, under the current linear economy conditions,...
Resources for countries entering into large-scale investment contracts with foreign investors
The resources on this page describe the various stages of planning and preparing for a large-scale investment, negotiating the main investment terms, and then monitoring and managing the implementation of the investment, and provide useful tools & resources to assist governments in the investment process.
From time to time, countries enter into large-scale investment contracts with foreign investors.
The most important and complex of these are related to natural resources (mining, oil and gas, and commercial agriculture) and infrastructure projects.
Such investment projects can last for decades and are, for many countries, an important means of generating funds to drive economic growth and development, or for providing an essential public service in the case of infrastructure.
Yet, despite their critical importance, many host country governments lack a strategic vision, strong regulatory frameworks, or the necessary resources to plan, prepare for, negotiate, monitor, and implement such projects, limiting their ability to maximize the benefits for their country.
In addition, from the company’s perspective, imbalanced deals can lead to adverse business outcomes, linked to reduced security of titles or concessions, increased prospects for disrupted operations from civil protests and greater risks of revisions of tax and other conditions.
The Roadmap lays out the various stages of planning and preparing for a large-scale investment (stages 1 & 2), negotiating the main investment contracts (stage 3) and monitoring and managing the implementation of the investment (stage 4).
While much emphasis is placed on the actual contract negotiation process, the success and sustainability of an investment also depends on the right policies and legal and regulatory framework being in place to govern the investment and ensure it aligns with a country’s national development strategies, and the careful monitoring of the implementation of the investment project.
Each stage of the Roadmap is described below, along with links to key tools and resources related to that stage.
As a first step, policymakers need to assess whether they have the right types of government policies, strategies, and a legal and regulatory framework in place to both attract foreign direct investment (FDI) and ensure that any such investments are sustainable and beneficial to the country.
The Pre-Negotiation Stage refers to the period during which a government identifies a particular project or investment and conducts feasibility studies and impact assessments.
It is also at this stage that a host government should prepare the necessary documentation to carry out a tender or competitive bidding process, if such an application of rights process is being used.
Where an investor is engaged on a first come, first served basis, or has made an unsolicited bid, a contract negotiation over the terms of the investment contract is usually required. It is at this stage that such important contractual terms as profit sharing, the level of taxes, and the breadth of stabilization clauses may be negotiated and the rights and obligations of each of the contracting parties agreed.
The contract essentially dictates the relationship between the host government and the foreign investor for the duration of the investment, which makes it crucial for the host government to have a negotiating team that is fully capable of engaging in the discussions on an equal footing with the contracting party. While at previous stages industry-specific information was also necessary, it is also vitally important here to assemble a negotiating team that has the knowledge, expertise, and experience to negotiate the substantive provisions of the contract.
The Australian National Audit Office offers best practice guidance on how to prepare for and conduct a contract negotiation on its website.
Once the contract has been signed and ratified, the project development and operations will begin. It is crucial to the sustainability and success of the project that governments have the capacity and resources to oversee the compliance of the contracting parties with the laws of the land and the terms of the contract, as well as to monitor the impact of the operations and related activities on the environment and affected communities.
Contracts should also be made publicly available and easily accessible. Contract transparency helps to hold both the host government and the investor to account and to facilitate the monitoring of contract obligations by government representatives and civil society alike.
