Investments in Energy Transition
Strengthening the Power Sector in South and Southeast Asia

EXECUTIVE SUMMARY

MAIN ARGUMENT

Demand for electricity is rising in South and Southeast Asia at one of the fastest rates in the world. Yet questions remain about how regional countries might individually and collectively meet the requirements of growing demand while also navigating complex economic, environmental, and energy security considerations. Success will largely depend on the ability of countries to address unmet infrastructure, human capacity, and investment needs across the region and leverage existing and new opportunities for collaboration at the national, regional, and international levels.

POLICY IMPLICATIONS

• To strengthen human capacity and resources, three challenges will need to be addressed at the individual level: reluctance to change, the inability to acquire new knowledge and skills, and poor retention of trained employees.
• To mitigate localized risks and spur inbound investment in energy infrastructure and production, countries can take numerous steps to improve their market fundamentals. These include adopting a more open trade and investment policy for energy distribution, accelerating low-carbon investments via targeted activities in Covid-19 stimulus packages, and rethinking tax structures to focus on investment in cross-border energy infrastructure.
• Extraregional stakeholders such as the U.S. and Japan and regional forums such as the East Asia Summit can promote bilateral and multilateral coordination through expanded funding for soft loans, debt-swapping initiatives, and an enhanced blended financing scheme (e.g., combining philanthropic and private funds).

Clara Gillispie is a Senior Advisor to NBR.

Ashley Johnson is Director of the Energy and Environmental Affairs group at NBR.

Thomas Lutken is a Project Manager with the Energy and Environmental Affairs group at NBR.

Micah Sindelar is a Project Associate with the Energy and Environmental Affairs group at NBR.