At the COP26 in Glasgow, most ASEAN member states renewed their decarbonisation commitments, with nine out of ten members committing to net zero targets.
Achieving these targets will depend in large part on a successful energy transition to renewable sources – an effort that will require novel and sustainable financing to bring more renewable energy projects online.
Currently, the region is still heavily reliant on public funding to drive this transition. A recent Climateworks Centre and ASEAN Centre for Energy (ACE) study found:
‘There remains a continued dependency on public funds for the energy transition, and the funding gaps remain substantially large to support the regional climate finance needs. There is an urgent need to improve the enabling environment for leveraging the private sector investment and to develop innovative renewable energy and energy efficiency business models and financing to enable wider participation in the energy sector transition and decarbonisation.’
Sustainable investment and financing will be indispensable for the region to successfully reach its decarbonisation and sustainable development goals.
With support from the Australian Government’s Partnership for Infrastructure initiative, Climateworks and ACE are now working with officials from ASEAN member states to enhance knowledge about the range of available sustainable finance instruments, as well as the enabling policy and institutional settings to support the low-carbon energy transition.
The first of three workshops, held on 12 July, brought leaders and experts together around common goals for decarbonisation in the region and prospects for deepening Australia–ASEAN collaboration. A key focus was to explore how public finance can mobilise the scale of private investment required to shift ASEAN states’ existing energy systems toward low-carbon alternatives
Representatives from Indonesia and the Philippines shared perspectives on the decarbonisation priorities in their respective national energy sector plans, as well as investment requirements and existing financing modalities.
A representative from Australia’s Clean Energy Finance Corporation spoke about how they are harnessing finance methods such as direct investment, debt markets, asset finance and investment funds to catalyse decarbonisation and support the energy sector transition.
The head of International Programmes in the Asia-Pacific at Climate Bonds Initiative discussed the catalytic role of green bonds and other sustainability-linked debt instruments, highlighting the optimal enabling policy settings and providing an overview of the steps required to issue green bonds.
Through these workshops, Climateworks and its Australian partners are sharing world-class decarbonisation and sustainable financing expertise. And ASEAN member states are learning from each other as they embark on major energy sector transformations.
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