ASEAN-China Low Carbon Investment Cooperation Workshop

Date : 25 August 2023

Location : Kintamani 5
ASEAN-China Low Carbon Investment Cooperation Workshop

The Association of Southeast Asian Nations (ASEAN) includes ten Member States – Brunei Darussalam, Cambodia, Indonesia, Lao PDR, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam – that are home to about 667 million people, accounting for about 8.7% of the total global population. In 2022, the real combined GDP of the ASEAN Member States (AMS) was estimated to reach USD 8.5 trillion (2017 constant, PPP) and is expected to continue expanding as much as 3.6 times by 20501. Fuelling that growth will require a balance in energy trilemma: security, affordability, and environmental sustainability. Thus, sustainable development should be done in all aspects of energy sectors, including electricity, fossil fuels, energy efficiency, renewable, and alternative energy.

These population and economic growth trends, combined with a shift from agriculture towards greater industrialisation and service-based economies, have defined the ASEAN region's development trajectory. They also impose numerous challenges, including how to meet the fast-growing energy demand. Ensuring prosperity and resilience across the region will require careful consideration of energy equality and environmental sustainability concerns. To achieve this, AMS are focusing on four priorities: energy security, accessibility, affordability, and sustainability, as outlined in the ASEAN Plan of Action for Energy Cooperation (APAEC) 2016–20252, the regional blueprint for the energy sector in the framework of the ASEAN Economic Community (AEC). The APAEC plays a vital role in setting a sustainable future for the ASEAN energy landscape.

As reported by the 7th ASEAN Energy Outlook (AEO7), in the power sector alone, substantial investments of as much as USD 109 billion are required to reach the 35% share of renewable energy (RE) in ASEAN installed power capacity by 2025, as targeted in the APAEC 2016-2025 Phase II: 2021- 2025, and USD 726 billion until 2050. The significant investment needs are driven by the higher implementation cost of cleaner technologies. Energy investment and financing will be key strategies to scale the energy transformation towards a low-carbon future. Therefore, there is a need for ASEAN decision-makers to nurture enabling regulatory environments to attract adequate investments in the energy sector, especially from foreign investors.

The need for involvement from the private sector, international partnerships, and financial institutions to support the attempts to achieve the regional targets would be crucial. In some practices, they could offer cutting-edge technologies, systems, and best practices that have ever been implemented in other regions or countries, such as China, and give the best consideration when the roadmap, policy, and regulation are planned to be enforced.

Therefore, it is necessary to provide and facilitate a platform for AMS and private sectors, international partners, and financial institutions to continuously ensure their participation could support the AMS' targets which would benefit the regional ones. Through intensive dialogue, some bottlenecks in technology, investment, and regulation could be eased.

Against this background, ACE plans to conduct an international forum between ASEAN and Chinese energy stakeholders, in collaboration with Energy Foundation China (EFC), as well as to develop a comprehensive report on ASEAN energy investment to support low-carbon energy infrastructure in Southeast Asia.