UK finance institution pledges $15M for energy transition in Southeast Asia

BII, a development finance institution of the U.K. government that works under the Department for International Development, has committed to the SUSI Asia Energy Transition Fund (SAETF) managed by Swiss-based SUSI Partners.

The investment marks the start of BII’s ambitions to invest up to £500 million ($622.3 million) in climate finance in the Southeast Asia region and forms part of its overall goal to target 30% of total new commitments to climate finance, the U.K. embassy said in a statement Monday.

SAETF targets infrastructure investments across the energy transition spectrum, including renewable energy, energy efficiency, and energy storage projects, and focuses on emerging economies in Southeast Asia, including Indonesia, Vietnam, and the Philippines.

The fund will contribute to global climate mitigation goals and the Paris Agreement by financing clean energy solutions, increasing the supply of reliable and affordable electricity for businesses and consumers, and enabling access to clean energy solutions in disadvantaged areas.

Southeast Asia has been one of the fastest-growing areas in the world, with energy demand in the region increasing on average by around 3% a year over the past two decades.

Six regional countries, including Vietnam and Indonesia, have announced net zero emissions and carbon neutral targets, with Vietnam aiming to achieve it by 2030.

These sustainability ambitions require at least $200 billion of energy sector investment by 2030, of which over three-quarters needs to be channelled into clean energy.

BII’s investment is aimed at attracting further commercial investors to unleash climate finance opportunities and support green, resilient economic growth in the region.

SUSI Partners has recently announced an investment in Asia Clean Capital Vietnam, a solar developer for commercial and industrial customers in Vietnam. It reiterates the renewed approach to investing in climate finance in Vietnam as one of BII’s priority markets in the Indo-Pacific region.

Wymen Chan, head of Asia at SUSI Partners, said: “Energy demand in Southeast Asia is growing fast in line with the region’s economic development.”

“Our goal is to direct capital towards the buildout of infrastructure that allows growth to occur in a sustainable manner while proving that Southeast Asia is not just impactful but a highly attractive market for public and private investors alike.”