There is a $205-billion opportunity in renewable energy for Southeast Asia from which China, Japan, and South Korea could benefit as the biggest energy lenders to smaller countries in the region, Greenpeace has said in a new report.
“These three East Asian countries are top global energy investors, with established ties in Southeast Asia. But coal finance is drying up and banks are struggling to get a grip on clean energy finance. The climate crisis depends heavily on the flexibility and ingenuity of East Asian finance. And state-backed public development banks once again need to play the trailblazer role to engage new markets,” according to Insung Lee, project manager of Greenpeace Japan’s climate and energy team.
Southeast Asian countries, according to the report, will need investments of some $125.1 billion for solar energy over the next ten years, as well as $48.1 billion for wind energy, assuming they want to pursue the renewable energy path instead of sticking to fossil fuels. And China, Japan, and South Korea are in a position to convince them to choose the renewable energy path by investing in solar and wind rather than fossil fuels.
However, the report notes that the three East Asian powerhouses are also large exporters of coal infrastructure and lenders for coal power plants to their neighbors in Southeast Asia. This has to change if they are to reap the benefits of the nascent renewable energy financing market in the region, the report says.
“East Asian finance will be as important for renewable energy in Southeast Asia as it was for coal. Over the past two decades, we’ve seen East Asian banks skew the margins towards coal to keep the fossil fuel profitable despite ballooning financial risk. Over the next decade, we’ll see them apply the same ingenuity to unlock renewable energy from the restrictions of their own financial framework,” Greenpeace Japan’s Lee also said.
By Charles Kennedy for Oilprice.com
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Charles is a writer for Oilprice.com