Southeast Asia stands at a climate inflection point. As one of the world’s most vulnerable regions, with some 640 million people living in low-lying and densely populated areas, the urgency of climate action cannot be overstated. At the same time, the region is poised to play a crucial role in the global clean energy transition.
According to the International Energy Agency (IEA), Southeast Asia will account for 25% of the projected rise in global energy demand over the next decade, driven by population growth and rapid urbanisation.
This presents both a challenge and an opportunity. The challenge: how to meet rising energy needs without increasing emissions. The opportunity: to deploy capital at scale to accelerate renewable energy deployment and build climate-resilient infrastructure.
The scale of investment is immense. According to a study from Kearney, Indonesia requires approximately US$62 billion annually to meet its net-zero goal. Vietnam faces a similar funding requirement of US$2.4 trillion by 2050.
These figures may seem daunting, but they highlight a powerful truth: Southeast Asia is one of the biggest untapped markets for climate finance.
Teaming up for climate action
Singapore is emerging as a regional leader in unlocking this opportunity. Through the Financing Asia’s Transition Partnership (Fast-P), Singapore-based investment company Temasek, along with the Asian Development Bank (ADB) and the Global Energy Alliance for People and Planet (GEAPP), has pledged US$500 million to catalyse clean energy investment across Asia.
This collaborative action aims to bridge the financing gap by de-risking projects and crowding in private capital. Moreover, additional instruments such as Singapore’s issuance of up to $35 billion in green bonds by 2030 and the Sustainable Bond Grant Scheme (SBGS), further reinforce its commitment.
However, unlocking capital alone is not enough. The flow of finance remains fragmented, and many high-impact projects struggle to reach bankability due to regulatory uncertainty, perceived risks or insufficient early-stage funding. This is where innovation and multi-stakeholder collaboration come in.
Blended finance — a strategic mix of public, private and philanthropic capital — offers a viable pathway. Philanthropic institutions, with their ability to provide flexible, risk-tolerant funding, play a vital role in reducing perceived risks and supporting project development.
By combining grants or concessional finance with private investment, blended finance structures can de-risk markets and unlock significantly larger capital flows.
Public-private-philanthropic partnerships (4Ps) are already showing promise. For instance, GEAPP’s collaboration in Vietnam led to the country’s first battery energy storage system (BESS) pilot, co-developed with Vietnam Electricity (EVN), ADB, Rocky Mountain Institute (RMI) and the Vietnam Energy Institute.
The pilot demonstrates how storage can enhance grid stability, reduce intermittency and enable greater renewable integration.
Beyond carbon
The benefits of climate finance extend beyond emissions. In rural and marginalised communities, distributed renewable energy (DRE) and storage solutions are empowering clinics, schools and small businesses, which unlock new opportunities for livelihoods, education and digital inclusion. These technologies are also helping families escape energy poverty and enabling broader economic participation
In Indonesia, GEAPP and PT Sarana Multi Infrastruktur (PT SMI) co-developed the 60 MW Tembesi Floating Solar Power Plant across Batam, Galang and Rempang islands.
GEAPP’s catalytic US$715,000 grant supported PT SMI to mobilise US$26.67 million, showcasing the impact of public-private-philanthropic collaboration in advancing the energy transition.
A recent report by Bain & Temasek shows promising momentum: green investment in six Southeast Asian countries — Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam — rose by 43% to US$8 billion in 2024.
Yet this is still far below the level needed. The transition will only succeed if we scale capital flows and align them with inclusive, localised impact.
To do this, we move beyond ambition to execution. Climate finance should be seen not just as a tool for decarbonisation, but as an enabler of economic resilience, equity and innovation. Strategic finance can empower countries to leapfrog to cleaner energy models, bypassing the carbon-intensive pathways of the past.
As global leaders prepare for COP30 in November, Southeast Asia has the opportunity to demonstrate how bold leadership, innovative financing tools and cross-sector collaboration can translate climate ambition into tangible impact.
It’s time to double down on financing, on innovation and the partnerships that will define Asia’s green future.
Kitty Bu is vice president, Southeast Asia at GEAPP
Read more about the Financing Asia’s Transition Partnership (Fast-P):
- S’pore’s blended finance initiative Fast-P to set up office, management team (May)
- Australia approves US$50 mil investment into Singapore’s Fast-P blended finance initiative (December 2024)
- Temasek-backed Pentagreen to manage Fast-P’s Green Investments partnership, seeking to deploy US$1 bil (November 2024)
- BlackRock, MAS spearhead collaboration on blended finance debt initiative (November 2024)
- Singapore announces Asia-focused blended finance initiative Fast-P with US$5 bil target fund size (December 2023)
