ASEAN Energy Investments
Primary energy demand across the 10-nation ASEAN (Association of Southeast Asian Nations) region surged 70 percent from 2000 to 2016 alongside annual economic growth rates that have recently averaged 5.1 percent. That has spurred ASEAN governments to implement a host of policies aimed at meeting growing demand for energy, including creation of a region-wide ASEAN Power Grid (APG), the ASEAN Post highlights in a recent news report.
Europe-based International Energy Agency (IEA) estimates some $1.2 trillion in capital will be needed to upgrade, modernize and expand power utility grids across the ASEAN region between today and 2040. Foreign investors from China, the European Union, Japan and the U.S., along with multilateral development banks and agencies, such as the Asian Development Bank (ADB), are making investments.
China’s ASEAN grid investments dwarf those of others. China has invested USD66 billion in power generation in Southeast Asia since 2003, 48 percent of global foreign direct investment during the period, according to the Post’s report.
Japan has invested more than USD1.5 billion in hydroelectric, solar and wind power projects in the ASEAN region since 2009, while the Export-Import Bank of Korea has invested USD150 million in renewable energy in Southeast Asia from 2009-2016, the Post says.
Unfortunately, most of the investments from China, Japan and South Korea have gone into fossil fuel generation, which adds greenhouse gases to the atmosphere and contributes to global warming. Furthermore, these investments work contrary to achieving the U.N. climate change and Sustainable Development Goals these nations have pledged to realize.
Looking outside Asia, the U.S. Overseas Private Investment Corp. has invested more than USD400 million in ASEAN’s power sector from 2009-2016. The USAID, the U.S. Agency for International Development, aims to invest USD750 million to strengthen renewable energy capacity across ASEAN member states, according to the Post’s report.
Germany has been the primary European investor in ASEAN’s power sector.
Multilateral banks, such as ADB and the World Bank, have played a big role in terms of ASEAN power sector investment and development. The two multilateral development banks have invested more than USD2 billion and USD1 billion, respectively in Southeast Asia’s renewable energy sector since 2009.
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