Category: Finance

Financing the ASEAN Power Grid

ASEAN has achieved significant political momentum around energy connectivity, but translating ambition into implementation requires addressing gaps in policy, institutional capacity and financing structures rather than economics, as modelling shows interconnectors can deliver competitive, bankable returns. Critical enablers include tariff certainty, availability-based payments, harmonised commercial frameworks, access to affordable long-tenor debt and credible investor exit pathways. Achieving the investment challenge will demand sustained, coordinated action by governments, regulators, utilities, development finance institutions and the private sector.

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Climate finance in China – can adaptation investment mirror the successes of mitigation finance? 

Adaptation finance is becoming a defining priority for global climate and development agendas. China is already demonstrating its ability to leverage ambitious policies to accelerate mitigation finance. The country now has an opportunity to translate its adaptation frameworks into finance at scale. Achieving this could help to safeguard its own development and that of international partners. It can also demonstrate a context-specific path to success that may generate lessons for other climate-vulnerable countries seeking to integrate resilience into national growth strategies.

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Data Centre Boom and Ireland’s Energy Bills

One of Ireland’s key electricity supply mechanisms – the capacity market – is coming up for its 10-year renewal with the European Commission, in May 2028. Without necessary interventions, there is a risk that it could add billions of euros to household energy bills to support data centre electricity consumption; which could run in contradiction to EU state aid rules. The Irish capacity market is already set to add over €7 billion to energy bills between 2018 and 2037,  via contracts to companies paid through levies on energy bills.

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Redefining Rooftop Solar Through Community Action: Case Study From Dominican Republic

Currently, rooftop solar systems in the Dominican Republic are primarily concentrated in wealthier households that can afford to purchase solar and battery storage systems outright. For this reason, a tiny share of high-income customers control nearly all rooftop solar capacity, with roughly 4.5% of the population accounting for nearly 97% of the installed rooftop solar capacity. This has created an unequal energy transition. The challenge, then, is how to make solar affordable and accessible to the LMI households. The answer lies in community-led solar.

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Southeast Asia’s Energy Investment Transition: From fossil-fuelled growth to a clean energy imperative

Southeast Asia stands at a pivotal moment in its energy investment trajectory. Long characterised by rapid economic growth underpinned by fossil fuels, the region is now entering a decisive phase of transition as clean energy investment rises to meet expanding demand, climate commitments and energy security concerns. According to the World Energy Investment 2025 report, Southeast Asia’s energy sector reflects both the opportunities and structural challenges facing emerging economies attempting to balance development priorities with decarbonisation goals.

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Scaling adaptation finance in Southeast Asia

The impacts of climate-related disasters are particularly severe in Asia. Between 2000 and 2023, Asia recorded average annual direct economic losses of USD75.7 billion from climate events or 40% of the global average, reflecting both the region’s physical vulnerability and the scale of assets at risk. Southeast Asia faces recurring floods and storms that impose significant fiscal burdens, strain public infrastructure, and disrupt livelihoods. Asia is warming at twice the global average due to its extensive landmass. Despite mounting climate risks, adaptation investment in the region remains far below what is needed.

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Shifting Investment Currents: Europe’s waning capital flow in SEA’s renewables sector

SEA’s renewable transition is moving at speed, but Europe’s role is steadily diminishing. To regain relevance, Europe must act on several fronts. It should expand its financial commitments, positioning itself as a dependable capital provider by strengthening initiatives like Global Gateway and scaling the JETP in Vietnam and Indonesia. Europe needs to boost its industrial competitiveness, ensuring its companies remain leaders in areas such as battery energy storage, offshore wind and grid integration.

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European Green Bonds: Mobilising investment to steer green transition

Future growth in the issuance of green bonds across the EU faces several challenges, including fragmented capital markets, an insufficient pipeline of standardised green projects ready for funding, and a lack of domestic investors. The issuance of the EU GBS represents a significant step in addressing these challenges while taking the green bond market towards a more consistent and robust sustainable finance ecosystem. Although the EU GBS aims to improve the share of green bonds in domestic markets, its voluntary nature limits its ability to fully overcome systemic barriers to green bond market growth, such as fragmentation.

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Red Eléctrica will need to accelerate investment to meet increasing system needs: IEEFA

REE stands at the centre of Spain’s energy transition, balancing the urgent need for accelerated grid investment with the imperative to preserve financial stability and governance discipline. The company’s role as the sole TSO gives it a unique responsibility to ensure Spain’s renewable energy targets are achieved. Despite REE’s solid investment-grade profile and strategic execution under the 2021-2025 plan, a material investment gap remains. The forthcoming 2026-2030 strategic plan must therefore deliver a structural scale-up in capex, especially in interconnections, digitalisation and energy storage.

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Global Clean Energy Investment Landscape

In 2024, global investments in energy transition technologies reached a record high of USD 2.4 trillion, up 20% compared with the average annual levels of 2022/2023. Growth in relatively mature technologies – renewable energy, energy efficiency, grids and electrified transport – continued in 2024, albeit at a slower pace than in previous years. Investment in nascent technologies – green hydrogen and CCS – declined in 2024. Battery storage remains a notable exception, sustaining robust growth through 2024.

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Carbon Markets and Pricing in Asia

Asia accounts for over 50% of global GHG emissions. Emissions are expected to keep rising, driven by rapid economic growth and growing energy demand. The region is warming at nearly twice the global average and experienced its hottest year in 2024. Carbon pricing plays a vital role in supporting sustainable economic growth in Asia. If appropriately priced, it can be a powerful tool to drive innovation and clean technology adoption, generate revenue that can be reinvested in climate projects.

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Financing the fast wins: Indonesia’s opportunity to lead on methane through its Sustainable Finance Taxonomy

Methane abatement is one of the most cost-effective, high-impact and underfinanced climate actions available today. Indonesia stands at the cusp of a taxonomy design upgrade that could unlock the resources to cap landfills, deploy biodigesters, and transform rice paddies, turning methane from a problem into an opportunity. By embedding robust and granular criteria for methane significant sectors, Indonesia can unlock capital and finance the “fast wins” on methane and chart a course for others to follow.

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From Bottlenecks to Breaking Ground: Why COP30 Must Prioritize Early-Stage Project Preparation

Every year at COP and other international venues, financiers and investors underscore a persistent struggle to find well-prepared, “bankable” projects that match their risk appetite and investment criteria. Yet the true challenge often lies in chronic underinvestment at the critical early stages of project preparation, when concepts are validated, feasibility assessed, and investor readiness established. Only by prioritizing early-stage project finance and technical support can COP30 effectively turn global climate commitments and country ambitions into tangible outcomes.

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Windfall Profits Taxes in Europe, 2025

As energy prices have declined, European countries have switched the focus of their windfall profits taxes-a one-time tax levied on a company or industry when economic conditions result in large, unexpected profit, from energy providers to the banking and financial sector. The European Commission recommended that Member States temporarily impose windfall profits taxes on all energy providers in its REPowerEU communication. In October 2022, the Council of the European Union agreed to impose an EU-wide windfall profits tax, or “solidarity contribution,” on fossil fuel companies, though with a different design than the Commission’s recommendations.

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Role of Safe Harbor for Energy Tax Credits in US

Existing IRS safe harbors are designed to honor good-faith, diligent investments in domestic energy projects while allowing for foreseeable risks during development and construction. Under the current rules, taxpayers must document their actions in comprehensive detail and absorb responsibility for the penalties of noncompliance. Energy projects seeking to claim federal tax credits are subject to substantial private market oversight and discipline under IRS rules and guidance that have been in place for more than a decade.

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Investment Trends in APAC’s Energy Transition

In 2023, the Asia-Pacific region accounted for over 90 per cent of global investment in coal, representing 13 per cent of energy investment globally. Demand for coal in ASEAN economies is projected to grow by five per cent annually, from 491 million metric tons (Mt) in 2024 to 567 million Mt by 2027. Without urgent steps to phase out coal and scale up diversified clean energy infrastructure, the region risks locking-in carbon-intensive pathways, undermining both climate goals and long-term energy security, and missing out on the opportunity to reduce air pollution. 

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Implications of European Union’s Carbon Border Adjustment Mechanism

The European Union’s Carbon Border Adjustment Mechanism (EU CBAM) was formally adopted in April 2023 as part of the EU’s broader Fit for 55 climate package and was designed to complement the EU Emissions Trading Scheme (ETS), which was established in 2005. The price in the EU ETS is currently around €70 per tCO2 ($80 per tCO2 46) – a price high enough to incentivise decarbonisation of many industrial processes – and is expected to rise further over time.

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Europe’s Role in Renewable Energy Investments in Southeast Asia

This extract delves into the past long-term involvement of European OEMs and renewable energy financing in major economies of Southeast Asia. Historically, most nations have been net energy importers given their advancing industrialisation as manufacturing hubs, with energy demand outpacing its energy production capacities. This is set to change with state-led directives laid out in diversifying from conventional energy sources expediting the energy transition agenda in the region. 

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Financing Offshore Wind in APAC

As the Asia-Pacific (APAC) region ramps up its shift towards renewable energy, countries are committing to carbon neutrality by 2050 and aiming to triple renewables by 2030. Offshore wind energy is becoming a key component of this transition, helping the region move closer to the 1.5°C pathway. While APAC represents the new wave of offshore wind markets, the global offshore wind industry in 2023 saw remarkable growth, connecting 11 GW of new capacity to the grid, representing a 24% increase from the previous year and bringing the worldwide total of offshore wind capacity to 75 GW. Despite this success, the sector has faced significant economic challenges due to the macroeconomic environment over recent years. 2024 has seen a declining inflation and interest rate environment, although inflation and costs of lending remain elevated compared to pre-2022.

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Climate Finance Landscape in Nigeria

In 2021/22, USD 2.5 billion of public and private capital—from both domestic and international sources—was invested in climate action in Nigeria. This makes for an annual climate finance gap of USD 27.2 billion. While Nigerian climate finance grew by 32% in 2021/22, up from USD 1.9 billion in 2019/20, USD 2.5 billion represents just 8% of the estimated USD 29.7 billion needed annually for mitigation15 and adaptation until 2030. Nigeria’s climate finance gap is likely even larger given that the existing needs estimates do not cover prospective loss and damage costs,16 while climate impacts only promise to compound over time, leading to spiraling costs of inaction. Nigeria was the third-largest recipient of tracked climate finance in Africa and accounted for almost a quarter of Western Africa’s regional climate finance in 2021/22

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