Leveraging global capital towards clean energy as ASEAN races to the Summit

ASEAN requires an estimated US$281 billion annually by 2035 for its energy transition, necessitating a strategic blend of bilateral financing from China, Japan, and the US. While China provides scale and speed through asset-led infrastructure, Japan focuses on system-level upgrades and concessionality, and the US employs blended finance to mobilise private capital. The report argues that ASEAN countries are transitioning from being mere deployment markets to becoming manufacturing hubs for EVs, solar PV, and critical minerals. It recommends that the 2026 ASEAN Summit be used to align these national industrial strategies into coordinated regional value chains to avoid duplication and attract diverse global capital.

• ASEAN's energy transition requires a massive increase in annual investment, estimated at US$281 billion by 2035 for clean energy generation, grids, and enabling infrastructure. This represents at least a fourfold increase over the roughly US$60 billion in total energy-related financing disbursed between 2015 and 2023.
• China provides the largest volume of energy-related finance to ASEAN, focusing on large-scale, asset-led infrastructure such as coal plants, hydropower, and transmission lines. However, approximately 95% of this official development finance is provided at market-based rates, which may increase debt sustainability risks for recipient nations.
• Japan's financing approach is characterized by a focus on system integration, electrification, and concessionality. It prioritizes hydropower rehabilitation, geothermal development, and rural electricity access, often utilizing Official Development Assistance (ODA) and loans with lower interest rates and longer tenors than market alternatives.
• The United States utilizes blended finance to catalyze private sector investment rather than directly funding large assets. This model focuses on technical assistance, improving utility governance, and de-risking projects to mobilize private capital, though its scale is modest at US$20.7 billion compared to other bilateral infrastructure financing.
• ASEAN countries are increasingly adopting industrial strategies to capture value from the clean energy supply chain: Indonesia is pursuing nickel mineral downstreaming for EV batteries, Viet Nam has become a leading solar manufacturing hub (accounting for roughly 5% of global PV supply), and Thailand is developing an EV manufacturing ecosystem through incentives like the EV 3.5 Package.
• The 2026 ASEAN Summit, under the Philippines' chairmanship, is identified as a critical opportunity to move from fragmented national efforts to coordinated regional value chains. This could involve harmonizing technical standards for batteries and solar components and creating a framework for countries to specialize in complementary roles.

APA

Demoral, A., & Setyawati, D. (2026). Leveraging global capital towards clean energy as ASEAN races to the Summit. Ember. https://ember-energy.org/app/uploads/2026/01/Policy-Paper-Leveraging-global-capital-towards-clean-energy-as-ASEAN-races-to-the-Summit.pdf

Chicago

Demoral, Alnie, and Dinita Setyawati. Leveraging global capital towards clean energy as ASEAN races to the Summit. Ember, 2026. https://ember-energy.org/app/uploads/2026/01/Policy-Paper-Leveraging-global-capital-towards-clean-energy-as-ASEAN-races-to-the-Summit.pdf.

Wikipedia

{{cite report |last1=Demoral |first1=Alnie |last2=Setyawati |first2=Dinita |title=Leveraging global capital towards clean energy as ASEAN races to the Summit |publisher=Ember |date=28 January 2026 |url=https://ember-energy.org/app/uploads/2026/01/Policy-Paper-Leveraging-global-capital-towards-clean-energy-as-ASEAN-races-to-the-Summit.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{demoral2026leveraging, author = {Demoral, Alnie and Setyawati, Dinita}, title = {{Leveraging global capital towards clean energy as ASEAN races to the Summit}}, institution = {Ember}, year = {2026}, month = jan, url = {https://ember-energy.org/app/uploads/2026/01/Policy-Paper-Leveraging-global-capital-towards-clean-energy-as-ASEAN-races-to-the-Summit.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }