A new report by Bain & Company and Standard Chartered Bank suggests that Southeast Asia could boost green capex deployment for power, grids and the electric vehicle (EV) value chain by US$80 ($102) billion to US$395 billion between 2026 and 2030, provided the region resolves systemic issues.
According to the Southeast Asia's Green Economy Report 2026: The New Calculus report that was published on May 18 (coinciding with Ecosperity Week), announced and deployed green capex has diverged by 35% in the region. While Southeast Asia’s green economy does not lack investment, it struggles to convert capital into actual projects.
For context, Southeast Asia's green economy is currently worth US$290 billion and forecasted to rise to $430 billion by 2030, supported by annual growth of 8% to 9%.
Out of US$540 billion in green capex announced across SEA's power and EV value chains between now and 2030 (or an average of US$108 billion per year), only around US$315 billion is on a credible path to deployment under current conditions, states the report.
However, should system constraints be mitigated, this could increase deployment by 25%. "The transition is sorting leaders and laggards in ways that climate ambition alone can no longer bridge,” says Bain & Company partner Dale Hardcastle. “Southeast Asia has 24 to 36 months to get the answer right, with an additional $80 billion in green capex in the balance”
Hardcastle adds that investments which demonstrate tangible demand and clear returns are attracting capital, adding, “Capital is flowing where commercial demand, energy security and policy that delivers infrastructure come together, and stalling where any of the three is missing, even where targets remain ambitious.”
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Tracking the deployment of green capex from 2021 to 2025, the report points out that 80% of private investment from 2021 to 2025 went into power, grids and EV value chains, demonstrating that capital converges into commercially-viable areas, including mobility and green industrial zones. EV adoption in particular has run 1.5 to 2 times ahead of earlier forecasts, states the report.
In contrast, project cancellation rates illustrate where alignment breaks down. These include the abandonment of about 50-60% of renewable energy projects in Vietnam, Thailand, and Indonesia due to system constraints including unclear PPA structures, permitting, and grid connection rules.
Securing investment needs modern robust power grid
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To realise the full potential of green capital deployment in Southeast Asia, a robust power grid is necessary, according to the report which highlights that the current grid is not built to handle new demand, in particular from data centres, EVs and green industrial parks which represent approximately 100 terawatt-hour of high-quality demand to 2030 .
“I think what's important is as we look at all three of these sources, they're highly bankable and significant investments,” says Hardcastle at a media briefing. “One of the big constraints is more of the ability to transmit and distribute power to new data centres, and I think here we see a shortfall in terms of investments into the grid.”
With grid connection delays cited by data centre operators as a top constraint, it is key for the region to decrease time-to-power as grid connection according to Hardcastle. “Many of these projects are contingent on being able to hook up to new power, and they would be prepared to pay more if it can be guaranteed and done faster or if green power can be provided,” he adds.
US$220 bil opportunity in EV value chain
EV adoption in particular has run 1.5 to 2 times ahead of earlier forecasts in ASEAN, with four out of the top 15 markets for EV penetration location in Southeast Asia. However, the report suggests that the region risks becoming a large and growing market that primarily benefits manufacturers headquartered elsewhere.
“The key question now is really whether this demand momentum of EV adoption is able to translate into some of the full regional benefit when we are able to capture some of the value chain, which includes the EV manufacturing as well the EV supply chain,” says Chow Wan Thonh who is Standard Chartered’s head of coverage for Singapore and Asean.
The report points out that no single ASEAN country can capture the entire EV value chain and proposes that interregional competition and collaboration or “contested integration”, may offer the best way to capture additional market value of US$130-160 billion for a total of up to US$220 billion.
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A phased approach
To capture opportunities in these high demand growth areas, the report suggests a “phased approach” could support the capturing of these new economic investments. This requires Southeast Asia to move from securing demand within current system limits today, to building shared infrastructure over the next five years, to finally becoming a regionally integrated green economy by the middle of the next decade.
“The opportunity for Southeast Asia’s green economy is substantial, but capturing it requires synchronising policy, infrastructure and finance at speed,” says Chow. “As an international bank with a strong presence across most ASEAN markets, we are committed to mobilising US$300 billion in sustainable finance globally by 2030 [and] our priority is to support clients through this transition by mobilising capital, structuring bankable solutions, and enabling cross-border opportunities that drive delivery.”
