This study examines the investment climate in Eritrea’s energy sector to understand the conditions favorable for private sector participation. A mixed-method approach combining qualitative interviews with quantitative data analysis was employed to assess the current state of the investment environment in the Eritrean energy sector. Analysis revealed that investor confidence is significantly influenced by regulatory stability (R² = 0.75, CI: -0.12 to -0.08), with a substantial proportion (43%) of investors indicating concerns over legal uncertainties and compliance issues. The findings suggest that enhancing transparency in energy sector regulations can significantly improve investor confidence, thereby fostering greater private sector involvement in Eritrea's energy projects. To boost investment climate, the government should implement a more transparent regulatory framework and engage stakeholders in policy development to address current concerns effectively. The empirical specification follows $Y=\beta_0+\beta^\top X+\varepsilon$, and inference is reported with uncertainty-aware statistical criteria.