Southeast Asia saw a significant increase of US$2.4 billion in green investments, primarily concentrated in Malaysia and Singapore, in the year 2024.
Southeast Asia has witnessed a significant increase in green investments in 2024, with a focus on countries such as Malaysia, Singapore, the Philippines, Vietnam, and Indonesia. Here’s an overview of their roles and progress:
## Green Investments in Southeast Asia
Private green investments in the six largest Southeast Asian economies jumped by 43% to $8 billion in 2024, with solar and waste management being key areas of focus. Solar projects and renewables-powered data centers accounted for much of this growth, contributing to a 43% increase compared to 2023.
China has been the largest public funder of clean energy in Southeast Asia over the past decade, with investments totaling $2.7 billion.
## Country-Specific Progress
### Malaysia While Malaysia is not a leading investor in green energy, it is part of Japan's key trading partners in Southeast Asia, which could influence future investments. Specific green investment data for Malaysia in 2024 is not detailed in the available sources.
### Singapore Singapore is crucial in driving green-energy financing in the region. Singapore-based funds have contributed significantly to the boom in green-energy financing, affecting countries like Indonesia and the Philippines over the medium term (2-4 years).
### Philippines The Philippines received a portion of the $221 million approved by the Green Climate Fund in July 2024, which includes a $200 million Climate Technopreneurship Fund aimed at nurturing local climate startups. The Philippines is expected to benefit from net-zero targets driving gigawatt-scale auctions, which will positively impact the renewable energy sector in the medium term.
### Vietnam Vietnam dominated the Southeast Asia renewable energy market with a 59.1% share in 2024. The country is also part of the Green Climate Fund's initiative, and like the Philippines, it benefits from rapid corporate RE100 procurement efforts. Vietnam is further bolstered by international collaborations, including those with Japan.
### Indonesia Indonesia is projected to grow the fastest in the renewable energy market, with a growth rate of 16.5%. Despite challenges in fully transitioning to renewable energy due to reliance on extractive industries, Indonesia has attracted significant investments, including from China through projects like solar and hydropower. The country is also a focus for grid-connected floating solar pilots and gigawatt-scale auctions driven by net-zero targets.
## Conclusion
Malaysia's green investment progress is not detailed in the current reports, but Singapore's financial role is pivotal in supporting green energy financing across the region. The Philippines, Vietnam, and Indonesia are making significant strides in renewable energy, with Vietnam leading the market share and Indonesia projected to grow rapidly. These countries are receiving substantial investments, both public and private, to bolster their green energy sectors.
However, Southeast Asia has an annual investment gap of US$50 billion by 2030 to reach its decarbonisation goals. To bridge this gap, initiatives such as blended finance, which combines public or philanthropic capital with private, are emerging as potential solutions.
Indonesia rebounded towards the end of 2024 by attracting funds for a 5GW wind power plant and another 5GW for rooftop solar to be completed by 2030. The Philippines' solar and wind financing expanded, but the country is lagging in terms of how its national climate goals drive sustainable investment-friendly policies.
Notably, Indonesia has announced a sustainable aviation fuel (SAF) mandate for all international flights departing from the country starting from 2027, and Singapore has announced its intention to import 6GW of low carbon electricity by 2035. Vietnam has vowed to achieve net zero by 2050, through a conditional emission reduction target of 27% by 2030. These commitments underscore the region's ongoing efforts to combat climate change and transition to a greener future.
- Singapore, being crucial in driving green-energy financing, has contributed significant funds to the boom in green-energy financing, impacting countries like Indonesia and the Philippines over the medium term.
- The Philippines' progress in renewable energy is evident, as it has received funding from the Green Climate Fund and is expected to benefit from net-zero targets driving gigawatt-scale auctions, positively impacting the renewable energy sector in the medium term.
- Vietnam dominated the Southeast Asia renewable energy market with a 59.1% share in 2024, and, like the Philippines, it benefits from rapid corporate RE100 procurement efforts and is part of the Green Climate Fund's initiative.
- The environmental-science community and investors are closely watching Indonesia's growth in the renewable energy market, as it is projected to grow the fastest with a growth rate of 16.5%, despite challenges in fully transitioning to renewable energy due to reliance on extractive industries.
- As Southeast Asia strives to reach its decarbonization goals, initiatives such as blended finance, which combines public or philanthropic capital with private, are emerging as potential solutions, such as the case in Indonesia, where funds were attracted for a 5GW wind power plant and another 5GW for rooftop solar to be completed by 2030.
