By Jake Levine
Last month, I traveled to Hanoi, Ho Chi Minh City, and Singapore to advance DFC’s — the U.S. International Development Finance Corporation — support for clean energy development in Asia and to represent DFC at the ASEAN Clean Energy Dialogue.
As DFC works to identify clean energy investments that will help mitigate the impacts of climate change and promote energy security across the developing world, there are several reasons we see strong potential across the vast Asia region.
1. Massive demand. Asia — a vast region that extends from India to Southeast Asia and the South Pacific and which is home to more than half the world’s population — is expected to consume 44 percent of the world’s energy by 2050.
2. Ambitious targets. During last year’s United Nations Climate Change Conference (COP26), Vietnam Prime Minister Pham Minh Chinh announced a commitment to reach net zero emissions by 2050, and the Vietnamese government began drafting a strategy to achieve this ambitious target. Vietnam joined several other countries in the region, such as Indonesia and the Philippines, that have also established ambitious targets for transitioning to clean energy.
3. Viable offshore wind opportunities. Vietnam is advancing toward net zero in part by committing to deploy more than seven gigawatts of offshore wind. This has already created a race among private sector developers to purchase offshore wind tracts and commenced the shift of conventional energy companies, including PetroVietnam, the Vietnamese national offshore oil and gas exploration company, toward offshore wind development. Vietnam’s commitment has also attracted regional attention for offshore wind development in the Philippines, Indonesia, and other countries across Asia.
4. Vibrant private sector. We have spent time learning from the private sector clean energy and transportation leaders building the projects and the companies accelerating the energy transition across Asia. And because so many net zero-aligned multinational corporations have sought to house their manufacturing in Asia, we are seeing clear pressure from the market to accelerate policy reforms that can unlock zero-emission electricity, transportation, and building.
We met with a solar developer in Vietnam, for example, who has more demand than she can service to supply what the major clean energy manufacturers are demanding to power their operations. This represents hundreds of megawatts’ worth of reliable rooftop solar and storage for businesses.
We also met with major offshore wind developers, including American and local leaders making headway in the political and regulatory arena as they begin mapping out nearshore and offshore opportunities.
Leadership across Asia understands the imperative — and the opportunity. We were thrilled to meet with ministers from across ASEAN participating in a Clean Energy Dialogue convened by the U.S. Secretary of Energy and the Singaporean Ministry for Trade.
Southeast Asia’s clear alignment with the same energy and climate security goals outlined by the United States in its newly launched Partnership for Global Infrastructure Investment (PGII) and Indo-Pacific Economic Framework (IPEF) bodes well for heightened success in attracting sustainable finance for durable economic growth.
And DFC is excited to build off some of its recent work in these areas — including our support for Indonesia’s first utility-scale wind power plant in Sulawesi, which will generate 75 megawatts of affordable and reliable energy; and our largest-ever loan for a solar panel manufacturing facility in India, which will churn out 3.3 gigawatts of solar panels every year as well as create supply chains with high standards.
When I returned home from Asia a few weeks ago, I had the opportunity to co-chair the 4th U.S.-Vietnam Energy Security Dialogue and host Vietnamese leaders in Washington. We barely missed a beat and continued sharing best practices designed to support Vietnam’s concerted efforts to draft an ambitious new power development plan. It was fitting that just a week later, our Indian solar panel manufacturing project broke ground. And in the next week, energy leaders in business and government will convene in Indonesia to discuss the details of the energy transition Indonesia is driving through its G20 presidency.
Climate is uniformly on the agenda in Asia — and that is where investors should go to find climate upside.
Jake Levine is the Chief Climate Officer at the U.S. International Development Finance Corporation.