ASEAN Needs A Minimum Investment Of US$3 Trillion For The 2050 Energy Transition

Deputy Prime Minister of Malaysia Fadillah Yusof when visiting President Prabowo at the Jakarta Palace. (Muchlis Jr-Biro Press of the Presidential Secretariat)

JAKARTA - Malaysia is encouraging ASEAN member countries to embrace fundamental changes in financing strategies to achieve ambitious energy transition goals in the region with cumulative investments estimated at more than US$3 trillion by 2050.

Malaysia's Deputy Prime Minister (PM), Fadillah Yusof, said his country needed more than USD 143 billion to meet its renewable energy (ET) target under the National Energy Transition Roadmap.

"These numbers underscore the simple but deep truth: public finances alone is not enough," he said in a speech at the ASEAN Energy Transition Meeting: Fostering Regional Cooperation in Malaysia in the middle of the 46th ASEAN Summit series in Kuala Lumpur, Monday, May 26, quoted from The Star.

Therefore, he continued, it is very important for governments throughout the ASEAN region to create a possible and strong environment to catalyze private, both domestic and international investments, through coordinated policy reforms and innovative financial instruments.

Fadillah, who is also the Minister of Energy Transition and Air-Division of Malaysia, said the instrument includes mixed financial mechanisms and public guarantees to reduce the risk of early-stage renewable energy projects.

He added that ASEAN must also strengthen its capital market through the issuance of green bonds, Islamic financial instruments such as sukuk, and sustainability-related loans to channel capital to clean energy projects.

"The carbon pricing framework that reflects real emissions costs is very important to provide incentives for the shift to low-carbon technology," he said.

"Digitalization of the energy ecosystem, including smart networks, artificial intelligence-based forecasting tools, and demand side management systems, will play an important role in increasing the flexibility and efficiency of systems across the region," continued the Malaysian Deputy PM.