Regional: Southeast Asia Energy Sector Development, Investment Planning and Capacity Building Facility

Energy / Energy sector development and institutional reform

Despite rapid economic growth, out of about 640 million people in the region, an estimated 65 million people remain without electricity and 250 million rely on biomass for cooking. Access to modern energy varies significantly among the ASEAN countries, ranging from 26% in Myanmar and 65% in Cambodia and Myanmar up to 100% in the region's most advanced economies such as Singapore and Thailand. The region also just started developing the frameworks and financing sources for a cleaner and more sustainable energy transition taking advantage of new technological advancements and recent cost reduction in renewable energy and energy efficiency. While the investment and capacity building needs differ among the DMCs, they generally include generation, transmission, distribution, energy efficiency investments and increased investment planning capacity to minimize the sector's carbon footprint.

The role of the energy sector as a key enabler of inclusive growth has become more important as the DMCs of Southeast Asia face the challenge of expanding their economies. Improved access to affordable and sustainable forms of energy is critical to enhance competitiveness, to contribute to climate change mitigation, and to promote increased economic activity in remote areas and thereby to improve inclusiveness of development. Continued urbanization, rising incomes leading to increased ownership of appliances and increased demand for cooling, and rapidly growing commercial and industrial activity all collectively contribute to electricity being the largest share of total energy consumption growth in the region.

The series of loans and knowledge services supported by this TA facility will helps support economic growth, expand and enforce existing electrical grids, connect businesses and households, and enhance the quality of life in unconnected villages across the region. They will help expand the use of renewable energy resources and clean technologies, such as solar power in Cambodia, the Philippines, and Viet Nam, and geothermal power and CCS in Indonesia, and thus help reduce carbon emissions and improve access to electricity services. The loans will require similar technical, financial, economic, environment, social, governance and legal due diligence.