Unlocking Finance for ASEAN’s NetZero Transition : Progress and Challenges

Overview & Synopsis

Southeast Asia is at the climate crossroads, facing growing emissions and threats from global warming. East Asia Pacific main destination of climate finance, but this is almost entirely driven by China, primarily focused on mitigation and limited diversification in technologies. The current gap in climate finance calls for a significant scaling-up of climate finance for Malaysia is greater than five percent of cumulative GDP for next 25 years. Sustainable finance has grown in the region, particularly through debt markets, but remains small, targeting a mix of green and social. In Malaysia private equity trails in financing volumes, but leads in diversity of funding for innovation in clean and climate technologies. Tackling the climate finance challenge and supporting a pipeline of bankable projects, relies on a broad set of economic, fiscal, financial and sectoral climate policies, supported by a range of instruments. There is a critical need to further develop financial sector policies to enable private capital mobilization.