Investors focus 85% capital on clean energy projects

Asia’s growth and grid challenges drive demand for clean energy investments.

Capital allocation in the energy sector is increasingly prioritising clean energy, with 75-85% of funds raised in 2022-2023 directed toward clean energy or energy transition, according to Kelvin Wong, Managing Director and Global Head of Energy, Renewables, and Infrastructure at DBS Bank.

“This clearly shows the importance of this agenda on all the investment managers' minds,” Wong stated, underscoring the sector’s shift toward sustainable energy.

Asia’s energy sector, particularly in South and Southeast Asia, is seeing significant growth in demand driven by population and GDP increases alongside a global shift toward electrification. “The opportunities are abundant…particularly in the clean energy space, to actually deploy capital as well as to develop new projects,” Wong noted.

However, grid infrastructure challenges are a significant hurdle in Southeast Asia’s clean energy transition. As low-hanging fruit projects are largely complete, further progress requires robust grid upgrades, including smart metres and energy storage solutions. “Last year at DBS, we…assisted a client in Indonesia to win a tender of 10,000 smart metres,” said Wong, describing smart grid solutions as essential for the region’s energy stability.

An ASEAN power grid for sharing renewable resources across the region presents another opportunity, particularly for resource-rich countries like Laos and Cambodia to support nations like Singapore. Battery storage and grid-smart technology are identified as critical components to enable the ASEAN region’s clean energy ambitions, setting the stage for a sustainable energy future.