Capital Expenditures From State-Owned Enterprises Explained: Concepts and trends

What Is State-Owned Enterprises Capital Expenditure?  

Energy state-owned enterprises (SOEs), also known as public sector undertakings, are companies that are majority owned by national governments, with a minimum 50% share. In this context, SOE capital expenditure (CapEx) represents company spending on acquiring, constructing, or upgrading physical assets such as pipelines, LNG terminals, power plants, battery energy storage systems, transmission and distribution lines, and other assets.

These energy companies are often tasked with ensuring energy security (particularly affordability), driving economic development, and delivering social services in fossil fuel-dependent communities. Governments own and control SOEs, with clear oversight over their investment decisions. Often, they benefit from direct or indirect financial support and subsidies from the government.

SOE CapEx spending is disaggregated into two main categories:

• fossil fuels: investments in the infrastructure to extract, process, and use coal, oil, and gas, and their by-products (e.g., electricity) in the energy sector.
• renewable energy: spending on building solar, wind, geothermal, bioenergy, and hydropower capacity, as well as battery storage and grid upgrades explicitly tied to renewable energy expansion.

Spending that does not fit these two categories—for instance, on other types of energy, such as nuclear power plants and transmission and distribution—is tracked and tagged separately in our database where possible.

Why Does SOEs' CapEx matter?

Globally, energy SOEs are the dominant force in the fossil fuel industry. In 2025, national oil companies were responsible for 54% of oil and 50% of gas production; this is expected to increase to 60% as private companies retreat from new oil and gas investments and reduce exposure to risky projects. State coal companies accounted for around 60% of coal production and coal power generation globally.

SOEs’ continued investment in fossil fuels can create long-term financial, security, and environmental risks that will have to be borne by the public. As the world shifts to renewables, energy SOEs face a risk of stranded assets—investments or resources that prematurely become uneconomic to operate—turning into a financial liability for national budgets. Fossil fuel investments also exacerbate the climate crisis and other environmental impacts from fossil fuel use and can even jeopardize energy security by locking governments into volatile global fossil fuel markets, contrary to policy-makers’ best intentions.

Avoiding these risks for energy SOEs starts with evidence-based research into their investment decisions.

What Are the Current Trends in SOEs’ CapEx?

SOEs in G20 countries continue to invest close to USD 300 billion each year into fossil fuel infrastructure. Unlike fossil fuel subsidies, CapEx by energy SOEs tends to remain stable over time and is less reactive to oil price fluctuations. As a result, the 2026 fossil fuel price shock from the Strait of Hormuz blockage is not likely to produce drastic increases in SOE CapEx on fossil fuels; however, it might trigger an increase in fuel stockpiling through SOEs.

Among the tracked SOEs, most fossil fuel investments come from national oil companies, at over USD 260 billion in 2024. While there is a notable shift toward renewable energy financing among state power companies and, notably, state coal companies, national oil companies face significant transition challenges and are moving at a slower pace.

Renewable energy investments are picking up, in large part driven by China, whose SOEs accounted for 81% of G20 SOEs renewables CapEx. On average, for every US dollar spent on renewable energy CapEx by G20 SOEs in 2020–2022, USD 9 went to fossil fuels. This ratio dropped slightly to 1:8 on average in 2023–2024, indicating a slow shift toward renewable energy spending. However, this estimate of renewable energy spending might be conservative due to the lack of transparency in SOE reporting (see methodology).  

One notable trend is an increase in CapEx investments in transmission and distribution infrastructure, which almost doubled from around USD 16 billion in 2020 to over USD 30 billion in 2024, as countries rush to build out grids to accommodate increasing electricity demand and renewable capacity. The Saudi Electricity Company alone spent USD 13 billion on grids in 2024 as the country prepares to increase the uptake of renewable energy.

Mixed renewables received USD 12 billion every year on average from 2020 to 2024. Where data is available by renewable energy type, solar spending increased by 50% on average every year from 2020 to 2024. Wind investments, which declined between 2020 and 2022 largely due to inflation and increased borrowing costs, saw a slight uptick in 2024—a trend that was also observed globally.

In short, while there is a gradual increase in SOE CapEx on renewable energy, the bulk of their investments remain in fossil fuels.

How Do We Collect Data on SOEs' CapEx?

Our data collection relies on official company and government reporting, sourcing CapEx figures from companies’ annual management reports and cash flow statements.

Our team collects and categorizes data to the extent that it is disaggregated by the reporting entities, recognizing that the level of disaggregation differs from country to country. For instance, India’s Ministry of Statistics and Programme Implementation publishes monthly flash reports providing project-level details on annual investments by national SOEs, allowing for precise spending disaggregation by technology type. Where explicit breakdowns are not available, we utilize tiered methodologies to estimate spending shares as follows:  

• direct disclosure: We prioritize exact spending numbers or percentage allocations between fossil fuel and renewables investments provided by the SOE, assessed against our own standard classification by technology and fuel type.
• project-level analysis: When totals are not disaggregated, but certain projects are announced as operational, we utilize project pipelines, permitting dates, and IRENA installation costs to estimate annual spending across a project's construction timeline.
• capacity proxies: As a last resort for state power companies, we may attribute spending based on year-on-year changes in a company’s installed capacity mix.