Accelerating Clean Energy Investment in ASEAN: Policy Options

Key Messages:

• Significant investments needed for clean energy transition
  ASEAN’s growing energy demand, driven by rapid economic growth, will require substantial investments in the power sector, with a projected USD 6 trillion needed to follow the carbon neutrality pathway.
• Foreign Direct Investment flow is closely linked to incentives and regulatory support for renewable energy
  The analysis using RISE Score indicators and World Bank’s Private Participation in Infrastructure (PPI) Project Database shows that foreign direct investment is highly correlated with renewable energy (RE) incentives, regulatory support for RE and current legal frameworks for RE.
• Stable and transparent regulatory frameworks are essential for attracting investment
  Long-term Power Purchase Agreements, clear permitting guidance, and fiscal incentives play a key role in reducing risks and attracting both foreign and domestic investments in renewable energy projects across ASEAN.
• Blended finance as a catalyst for private investment
  Blended finance, combining concessional funds with commercial investment, is key to de-risking high-impact clean energy projects and filling the investment gap in lower-income ASEAN countries.