ASEAN represents strong clean energy investment opportunities for U.S. companies, but concerns grow about waning influence in the region
China, Japan, South Korea, and Australia are creating significant collaboration opportunities in clean energy technologies throughout the ASEAN region, prompting fears that the U.S. is losing both influence and investment opportunities.
A recent report shows how China is leading public investment in clean energy technologies in the key Association of Southeast Asian Nations (ASEAN) markets of Indonesia, Philippines, Thailand, Malaysia, and Vietnam, investing over $2.7 billion between 2013 and 2023[1]. International investment in the region has increased 15% on average each year since 2020, according to the joint report from Oil Change International (OCI), the World Resources Institute (WRI), and the Lowy Institute.
ASEAN represents a fast-growing market for the clean energy transition
ASEAN is home to some of the fastest-growing economies in the world, according to HSBC and the IMF’s Global Economic Outlook, which predict that the region’s economy will grow by an average of 4.7% over the next five years[2]. Indonesia, Malaysia, Thailand, the Philippines, and Vietnam saw average economic growth of 5.3% per year between 2022 and 2024.
Indonesia received the most public investment of the ASEAN countries, at $3.54 billion between 2013 and 2023, followed by Thailand ($1.3 billion) and Vietnam ($694 million).
The ASEAN region is a hotbed for clean energy technology investment. Since 2020, the number of investments in renewable energy projects has grown by 15% annually – compared to 11% globally – reaching $43 billion in 2022. The region has burgeoning energy demands and is aligned with the -1.5°C global climate change targets, making it an ideal locus for foreign investment.
However, the region’s aim of meeting its 23% target of primary renewable sources required investments of $27 billion, but it only received $8 billion foreign investment between 2016 and 2021, which again makes it a strategic focal point for U.S. companies’ investment.[3]
The concern is that the U.S. is ceding influence in this sector, and in this region, to China. For example, China was the biggest investor in wind energy in the ASEAN region between 2013 and 2023, investing $1.28 billion, and the largest hydropower investor at $1.1 billion.
China rules hydropower in ASEAN’s Mekong River and delta
China is considered to be ‘king’ of the vast Mekong River and delta, in which it has financed and constructed multiple hydropower and dam projects – mainly in Thailand and Vietnam – as part of its Belt and Road Initiative (BRI). Japan and South Korea have also invested $641 million and $514 million, respectively, in hydropower in the region.
China is also the largest cross-border trading partner in the region – $4.3 billion – driven by strong demand for EV batteries, solar modules and wind components.
Most countries in the region have reciprocal policies with China in place. In addition to the BRI, China has multiple cooperative mechanisms, including the ASEAN +3 coalition, the ASEAN-China Strategic Partnership Vision 2030, the ASEAN-China Environmental Cooperation Strategy, and the China-ASEAN Investment Cooperation Fund. All of them are helping China to build influence locally, while consolidating regional supply chains.
Japan, meanwhile, is ASEAN’s largest foreign investor in geothermal and solar at $1.3 billion and $142 million, respectively, over the same period. Japan is also considered to be one of the leading energy transition protagonists in the region[4]. In particular, the Asia Zero Emissions Community (AZEC) is a flagship project for ASEAN-Japan collaboration on clean energy. Japan also plays a leading role in the Just Energy Transition Partnerships (JETP) – which is part of the ASEAN +3 coalition.
AZEC is part of Japan’s Green Transformation policy, which also supports the Asia Energy Transition Initiative (AETI), and the Cleaner Energy Future Initiative for ASEAN (CEFIA).
Cross-border clean energy investments in ASEAN continue to grow
South Korea has also been an active investor in the ASEAN region for many years and is part of ASEAN +3, the ASEAN Catalytic Green Finance Facility, and the ASEAN-Korean Cooperation Foundation, among others.
Similarly, Australia is also a highly active investor and player in the region. Thailand and Vietnam are proving to be particularly attractive countries for investment (see blog ‘Vietnam and other ASEAN countries offer increasingly attractive investment opportunities for U.S. companies’).
Unfortunately, there are very few figures broken out for U.S. investment in the region in clean technologies, but there are evident concerns about the foreign investment policies of the Trump administration, which could lead to the U.S. losing not just influence in the region in this sector, but also significant investment and growth opportunities.
Pamir has decades of experience of helping U.S. companies to explore market opportunities in the China and the broader ASEAN and Asia Pacific region.
We use a unique blend of quantitative and qualitative research, as well as local experts and knowledge of the region’s compliance requirements, which can help to minimize risk and optimize opportunity.
Contact us today to find out how we can help your business.
[1] https://www.fpri.org/article/2025/04/green-energy-in-southeast-asia-why-the-us-should-invest-more/
[2] https://www.gbm.hsbc.com/en-gb/insights/global-research/asean-perspectives-bigger-and-better
[3] https://zerocarbon-analytics.org/archives/economics/the-race-to-invest-in-southeast-asias-green-economy
[4] https://www.iseas.edu.sg/wp-content/uploads/2024/08/SEACO24-Report-final.pdf#page=45
