Both South and Southeast Asia offer significant opportunities for global climate action, with many governments setting ambitious net-zero targets. Solar, wind and hydro development potential abounds.
If domestic public banks see renewable projects as high risk, so too do private investors, so renewable projects seek the support of actors that can ameliorate the risk, quite often the government. But in Myanmar, renewable energy developers face hurdles in obtaining government support, such as sovereign guarantees or risk-sharing agreements, essential for securing their investments. Furthermore, underdeveloped domestic capital markets limit opportunities for local businesses to raise funds through bonds. Across ASEAN countries, government bonds exceed corporate bonds in scale, exacerbating funding challenges.
Another way to expand the market for renewables is to allow large commercial and industrial customers to buy directly from the power plants, bypassing state intermediaries. The Philippines and Malaysia have adopted this approach, incentivising the development of renewable plants for private industry. However, Vietnam currently lacks such incentives.
As demand for renewable energy continues to drive innovation in the region, such examples will become more common. However, enough success stories already exist for countries to learn from and act to fund their renewable futures without delay.
How to unlock clean energy in South and Southeast Asia | IEEFA
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