“As the world navigates shifting geopolitics,” Asia’s burgeoning economies and vulnerable communities are driving both growth and significant greenhouse emissions. It is a difficult balancing act: the region’s booming economies, surging energy demands, and rapid industrial growth are both fueling the climate crisis, positioning the region as one of its most significant casualties of modern human history.

Asia is at the forefront of climate change, facing heatwaves, floods, extreme weather as well as the spread of infectious diseases. With rising risks, urgent climate action is essential.

The Global Climate Finance Landscape: Challenges and Opportunities

Global climate finance surpassed the trillion-dollar mark in 2021-2022, doubling from USD674 billion in 2018. However, slow progress in reducing global greenhouse gas emissions may result in exceeding the critical 1.5°C warming threshold. Rapid investments in climate resilience are essential, particularly for densely populated and vulnerable Asian nations.

The 29th session of the Conference of the Parties to the United Nations Framework Convention on Climate Change (COP29) held in November 2024 in Azerbaijan highlighted the persistent and contentious gap between the climate funding needs of developing countries and the commitments made by developed nations.

The agreement to provide USD300 billion annually by 2035, while a step forward, represents only a fraction of the estimated USD1.3 trillion annual requirement articulated by vulnerable nations and climate advocates. This leaves an annual shortfall of approximately USD1 trillion, a deficit that severely hampers the ability of frontline countries to implement effective mitigation, adaptation, and loss and damage strategies.

Understanding Asia’s Climate Investment Challenges

Addressing Asia’s climate investment challenges – policy inconsistencies, infrastructure and technology gaps, and financing constraints – is increasingly urgent.

Consistent and predictable policy is essential for sustaining climate investments. Sudden changes in measures can create financial uncertainty. Stable and transparent policy environments – supported by robust regulatory structures and independent oversight – can help mitigate fluctuations and build long-term investment confidence.

Global renewable energy expansion – especially wind and solar – has outpaced essential transmission systems, impacting energy distribution. Aging grids need modernisation with smart technologies, storage, and stabilisation measures. Moreover, the geographic dispersion of renewables calls for long-distance transmission and advanced grid management for distributed resources. Increased investments in storage and carbon capture, utilisation, and storage are also vital for seamless integration and decarbonisation.

Financial constraints remain a key barrier to realising Asia’s full climate resilience. Nationally Determined Contributions (NDCs) reveal that Southeast Asia alone requires USD422.16 billion in climate funds by 2030. Of this, USD293.01 billion is for mitigation efforts, including the crucial transformation to renewable energy, enhancement of energy efficiency, and reduction of emissions across industries. The remaining USD129.15 billion is for adaptation, enabling communities to adapt to the changes already underway and build resilience against future impacts.

Furthermore, emerging markets and developing economies across Asia need approximately USD1.1 trillion annually for climate-related investments, yet currently receive only USD333 billion, leaving a funding gap of over USD815 billion. This disparity underscores the critical need for cohesive policies, robust infrastructure and technological advancements, and scalable financing solutions to drive sustainable climate investments across Asia.

These challenges represent both risk and a tremendous opportunity for global investors seeking growth for their portfolios.

Looking Ahead: Energy Asia 2025

Asia’s future depends on the ability of its nations to mobilise resources, innovate new financing solutions, and implement effective climate policies. Energy Asia 2025 will serve as a crucial platform to continually address the massive climate funding gap and in the effort to deliver sustainable outcomes for millions of people across the region. Bringing together governments, industry leaders and financial institutions from across the region, the topics of discussion at Energy Asia 2025 will focus on creating bankable energy projects, decarbonising hard-to-abate sectors, and enhancing multilateral climate financing.

The conference is a call to action for all stakeholders to converge, invest in innovative solutions, and ensure that financial flows are aligned with the urgent needs of one of the world’s most dynamic and vulnerable regions.

Beyond dialogue, Energy Asia 2025 features its Energy Park, which will actively drive innovation by showcasing cutting-edge climate solutions, directly addressing policy gaps that impede funding flow, and fostering collaboration among key stakeholders to unlock the vital resources to build a resilient, low-carbon future.

Join global leaders and be part of the movement to drive Asia’s climate finance solutions at Energy Asia 2025 in Kuala Lumpur from 16-18 June 2025.

Register today at officialenergyasia.com.