Mobilising Finance to Support ASEAN’s Low Carbon Energy Transition: Challenges and Policy Options
26 June 2023
Key Messages
ASEAN requires a total investment of USD 159 billion for the power sector between 2021 and 2030. Around 75% of this should go towards renewable energy (RE). To date, most of the investment in RE, from both public and private sources, has gone into hydropower, geothermal and solar energy, with small amounts channelled to other forms of power generation.
ASEAN should focus on increasing the leverage ratio of public finance and improving the fiscal space to increase the amount of private finance. However, several major challenges are identified: 1) lack of institutions and regulatory frameworks; 2) lack of fiscal support for clean energy; and 3) limited project pipelines.
There are policy options to solve these challenges, namely: 1) regulatory and institutional reforms related to planning and execution; 2) public budget realignment and leveraging; and 3) blended finance for early-stage project development and unfamiliar technology.
