$281b annual investment projected as Southeast Asia scales energy transition

Funding is primarily for clean energy and grid infrastructure.

Southeast Asia will require $281b annually by 2035 to fund its energy transition, primarily for clean energy and grid infrastructure, according to a report by Ember.

Funding is increasingly coming from external capital, complementing long-standing support from multilateral development banks and growing private investment.

External bilateral financing brings both promise and challenges. In China, funding has enabled rapid expansion of energy infrastructure in several ASEAN countries, but experts warned that large-scale, debt-financed projects could increase debt exposure if project planning, revenue certainty, and institutional capacity are not properly aligned.

In contrast, Japan emphasises strategic, system-focused development, whilst the United States promotes blended finance models that mobilize private capital.

Analysts suggested ASEAN can maximise benefits by strategically combining these approaches, balancing speed, scale, and sustainability.

ASEAN’s clean energy future is also shaped by emerging industrial strategies, including solar manufacturing, resource downstreaming, and electric vehicle development, which require regional coordination to leverage strengths and avoid duplication.

The Philippines’ 2026 ASEAN Chairmanship presents a critical opportunity to align national policies, accelerate energy transition goals, and maximise the region’s resources through collective action.

“Available capital must be used not only to build infrastructure and projects, but to strengthen internal capacity and domestic manufacturing,” said Alnie Demoral, energy analyst at Ember. “This will help the region avoid being locked into the low-value end of clean energy supply chains.”