ASEAN must act boldly and collectively to bridge the massive financing gap hindering the region’s clean energy transition, or risk derailing both climate targets and sustainable development, Malaysia warned on Friday.
Speaking at a regional energy forum co-organised with the ASEAN Centre for Energy (ACE), Malaysia’s Permanent Representative to ASEAN, Datin Sarah Al Bakri Devadason, delivered a clear message: the urgency to phase out fossil fuels must be matched by decisive financial commitments and inclusive policymaking.
“Access to clean, affordable, and reliable energy is not just a utility issue — it’s a generational responsibility,” she said. “We must ensure that our transition to renewables is environmentally sound and socially inclusive.”
Citing projections by ACE, she noted that regional energy demand could surge by over 60% by 2040. Without a radical shift away from conventional energy sources, ASEAN risks missing its climate targets and undermining regional resilience.
Currently, ASEAN is targeting a 23% share of renewable energy in its total primary energy supply by 2025. But the scale of investment needed goes far beyond short-term benchmarks. A study by the International Renewable Energy Agency (IRENA) estimates that a full energy transition in ASEAN would require approximately USD 29.4 trillion by 2050 — a gap that remains largely unfunded.
Datin Sarah highlighted the ASEAN Taxonomy for Sustainable Finance (ATSF) — updated in March 2024 — as a foundational tool to catalyse investment. Notably, the taxonomy is the first globally to adopt a dual-tier classification system, recognising both green and transitional (amber) categories of energy financing, aimed at drawing a wider pool of capital.
As Chair of ASEAN, Malaysia reaffirmed its commitment to spearhead collaborative, cross-sector approaches to finance a just energy transition across the region.
“Together, we can forge an ASEAN that is not only economically resilient but also environmentally accountable and socially just,” she concluded.
The event brought together representatives from ASEAN member states, the diplomatic community, financial institutions, civil society, and industry leaders — all focused on one pressing question: how to fund the region’s clean energy future before it’s too late.
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