Global consulting, investment firms showcase green investment potential in SE Asia

Published on 26/04/2024 at 08:54 GMT+7 Reading time

Reports from global consulting, business intelligence and investment firms − Bain & Company, GenZero, Standard Chartered, and Temasek − have identified 13 most potential decarbonization investments in Southeast Asia, amounting to US$150 billion (Rp2.434 trillion).

These green investments are among the top-ranked out of 94 investment ideas, aiming to accelerate the region's green transition and unlock significant economic benefits.

The highlighted investment ideas span sectors such as nature and agriculture, electricity, transportation, and buildings. Here are the most promising investment ideas to accelerate the energy transition in Southeast Asia:

Nature and Agriculture Sector:

  1. Regenerative agriculture
  2. Seeking alternatives for land irrigation and drying
  3. Precision agriculture
  4. Forest and peatland conservation

Energy Sector:

  1. Boosting the renewable energy industry
  2. Increasing the utilization of solar and wind energy
  3. Enhancing infrastructure
  4. Captive Solar +1
  5. vPPAs and bilateral agreements

Transportation Sector:

  1. Encouraging the use of electric vehicles and improving charging facilities
  2. Utilizing agricultural waste as raw material for biofuel production

Building Sector:

  1. Improving energy efficiency for data centers
  2. Enhancing energy efficiency for all existing buildings

According to the reports, green investments in the region have shown a positive trend, growing by 20 percent year on year (YoY) to reach US$6.3 billion (Rp102 trillion). This growth is attributed to increased investments in renewable energy and green data centers.

"As one of the most climate-vulnerable regions, Southeast Asia is experiencing a significant increase in greenhouse gas emissions driven by economic development," Kimberly Tan, Head of Investment at GenZero, said.

Amidst the global competition for climate investments, countries leading in mapping their decarbonization roadmap through clear policy frameworks, supportive and concrete regulations, and financing plans are better positioned to attract private investments and accelerate their transition.

Kyung-Ah Park, Managing Director of Environmental, Social and Governance (ESG) & Sustainability Investments at Temasek, emphasized that Southeast Asia has a significant role to play in the global net-zero ambition.

"However, the Southeast Asian region faces dual challenges, often conflicting, to meet the increasing demand for affordable and reliable energy while simultaneously reducing emissions," Park said.

She stressed the need for collaboration across public and private sectors and diverse partners to seize green growth opportunities and accelerate the transition in a fair and inclusive manner.

The reports also outlined five accelerators to enhance these solutions, including:

  1. A series of more comprehensive policy incentives
  2. Innovative financial mechanisms
  3. Scaling up corporate investments
  4. Cluster/prototype development
  5. Regional collaboration.

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