ASEAN Energy Investment 2024

Key points:

• The ASEAN economy experienced a rebound in 2021, achieving a 4.1% economic growth in 2023 and is projected to increase up to 4.7% by 2025. This positions the ASEAN region among the world’s fastest-growing economies.
• With rapid industrialisation and urbanisation, ASEAN’s energy demand is expected to continue increasing until 2050. The Total Final Energy Consumption (TFEC) in ASEAN is projected to reach 746.2 Mtoe by 2050, while the Total Primary Energy Supply (TPES) is expected to reach 1,219 Mtoe by the same year.
• The ASEAN energy sector faces investment challenges that have delayed financing towards a low-carbon economy. Currently, the region consists of approximately 60% commercial debt, with underutilized capital market access for financing clean energy projects.
• This trend is also evident in the Indonesian energy investment landscape, where 49% of financing comes from commercial banks and only 12% from equity. In contrast, whilst commercial banks still show the highest contribution, energy investment in Lao PDR also includes a notable share of equity, of approximately 28%.
• Using the World Bank’s Regulatory Indicators for Sustainable Energy (RISE) score, the total investment value is plotted. The analysis reveals that both overall investment and foreign direct investment (FDI) decisions are heavily correlated with incentives and regulatory support for renewable energy (RE). Another supporting factor for overall investment is network connectivity and usage, while for FDI, the legal framework for RE shows the second highest correlation with investment decisions.

The development of this report is supported by the Energy Foundation China through the project “Accelerating Low Carbon Energy Development in ASEAN Through Investment and Best Practices from China”