Highlights
- The updated APAEC 2026–2030 has set more ambitious targets of renewable energy deployment towards energy transition efforts in ASEAN. Supporting the achievement of these targets will require a substantial initial investment.
- While clean energy in ASEAN is growing, it still lags behind the required investment. ASEAN is projected to attract USD 200 billion-1.3 trillion to finance its energy transition efforts by 2030. However, an estimated USD 170 billion investment gap is projected through 2030.
- High perceived risk by the private sector is one of the key bottlenecks hindering the mobiliszation of private capital into the energy transition in ASEAN. Thus, exploring derisking instruments is crucial.
- MDBs offer a pivotal role in narrowing the investment gap in ASEAN as a catalyst to attract the private sector through providing guarantees, risk sharing, and insurance.
- However, the effectiveness of leveraging derisking instruments of MDBs in narrowing the investment gap would require enhancing a conducive investment environment and the institutional capacity building on developing bankable energy transition projects through the inclusion of derisking instruments.