Southeast Asia’s green transition to get $700m investment boost

The funding will cover solar, wind, and hydropower projects.

A greenfield renewable energy platform formed by three global financial institutions is investing more than half-a-billion dollars to build plants across Southeast Asia that will generate 500 megawatts (MW) of clean power, starting with the Philippines and Vietnam.

The investment by the Sustainable Asia Renewable Assets (SARA), a venture of UK-based finance institution British International Investment (BII), Dutch development bank FMO, and Swiss-based investment company SUSI Partners AG could go as high as $700m, Rohit Anand, regional head for Southeast Asia at BII, told Asian Power.

The amount includes about $500m in debt that the parties will raise and a $150m equity capital, he said in a Zoom interview. Anand, who is also head of infrastructure equity for Asia at BII, said the project would be built over three years.

Returns are estimated at 50% depending on the projects, said Wymen Chan, managing director at SUSI.

Fossil fuels dominated Vietnam’s and the Philippines’s electricity generation in 2023, accounting for 58% and 78%, respectively, according to energy think tank Ember. Their renewable energy generation accounted for 42% and 22%.

Vietnam seeks to increase its clean energy generation to 50% by 2050, whilst the Philippine target is 50% by 2040.

Anand and Chan said the parties chose the Philippines due to its favourable regulatory environment, noting that it is the region's “most liberalised energy market.”

Vietnam is at a crossroads, Chan said. “With its macroeconomic fundamentals, it's going to need more power, but it's going to have a problem with power supply in the short run, so that makes it an attractive opportunity to build more projects.”

The 500-MW target will cover solar, wind, and hydropower projects.

SARA has started its first project — the 40-MW Dam Nai wind farm in Vietnam’s Ninh Thuan province that SUSI bought in October 2024. 

“The idea really is to build a scaled portfolio of 500 megawatts over the next three to four years to demonstrate that you can build high-quality businesses in this region,” Anand said. 

“A lot of investors are waiting on the sidelines, and there is a need for certain investors to take the early-stage risk and build high-quality enterprises which can then be ready to receive capital from others,” he added.

Southeast Asia attracts only 2% of global clean energy investments even though it accounts for 6% of global gross domestic product, the International Energy Agency said in an October 2024 report.

The investment level must increase fivefold to $190b by 2035 as eight countries in the region try to hit net zero emission goals by 2050, it said.