Energy Efficiency in ASEAN: Trends and Financing Schemes

ASEAN’s unprecedented economic growth in recent years has required access to an uninterrupted energy supply across the region. As it plans to ensure a 20% energy intensity reduction by 2020 and 30% by 2025, ASEAN must realize and harness the benefits of energy efficiency and optimize its use for the regional and national energy sectors, which is now dubbed “first fuel” rather than “hidden fuel” or “fifth fuel” due to its viability and usability in the states. Two ASEAN countries, e.g., Malaysia and Thailand, are already initiating advanced and innovative financial instruments and specialized financial models that offer the best of public and private sector participation and investment in energy efficiency projects. Based on common findings, other countries can also adopt the mechanisms for harnessing the maximum benefits of innovative energy efficiency initiatives. We discuss and analyze sectorial practice and challenges and policy instruments used for energy efficiency management in the ASEAN countries. We also assess institutional capacity, financial mechanisms, and relevant cases of innovative financing schemes, energy investment mechanisms, and the integration modality of demand- and supply-side energy management. Based on our findings, we provide policy guidance aimed at achieving harmonized and sustainable management of energy efficiency for the ASEAN energy sector.

WORKING PAPER NO: 1196