High financing costs hinder Southeast Asia’s energy transition, ASEAN report finds

ASEAN recently held a series of energy ministerial meetings and business forums to build consensus on the region’s energy development. (Photo: AEBF)

ASEAN’s energy demand continues to grow, but the region faces an annual investment gap of around USD 405 billion through 2060. Renewables currently account for less than 15% of the energy mix, well below the region’s target. 

Meanwhile, geothermal development has emerged as a key topic at the ASEAN Energy Business Forum (AEBF), where industry experts highlighted exploration risks, transmission constraints, financing challenges and complex approval processes as major barriers to development.

High financing costs hinder ASEAN’s energy transition

The ASEAN Centre for Energy (ACE) released its ASEAN Energy Investment 2026 report on Oct. 6. The report shows that ASEAN accounts for around 5% of global energy demand and 9% of the world’s population. While the region attracted more than USD 100 billion in energy investment in 2025, this represented only 3% to 4% of global investment, indicating significant room for growth.

Unlock the full article to explore three key takeaways:

1. ASEAN faces an annual energy investment gap of about USD 405 billion.
2. Clean energy financing costs in Southeast Asia are about twice those in some developed economies.
3. ASEAN FDI rose nearly 9% in 2024, but cross-border renewable financing fell 64%.