Developing Blended Finance Pathways for Renewable Energy in Southeast Asia

Commercial investment in renewable energy needs to accelerate across Southeast Asia to advance energy security, development and climate goals. Some projects have sufficiently robust economic and policy foundations to attract commercial capital. Others struggle to move from early-stage development to financial close and implementation because project-level and system-level risks weaken their bankability.

Blended finance structures mobilise private capital by using concessional finance to absorb, share or mitigate risks that commercial investors are unwilling or unable to bear alone. Its value is greatest where commercial investment is constrained by clearly defined risks that can be mitigated at the project level while more limited where investment barriers are primarily structural or regulatory.

This report, a collaboration between the International Energy Agency and Convergence Blended Finance, examines how blended finance can support renewable energy investment in Southeast Asia. It reviews regional energy investment and blended finance trends, before assessing rooftop solar, decentralised solutions (including mini-grids and standalone systems), offshore wind and battery energy storage systems in Indonesia, the Philippines and Viet Nam. Together, these sectors cover a range of risks, market conditions and levels of maturity. The report estimates their international public finance needs, recommends how blended finance can be targeted and structured, and draws practical lessons from case studies on additionality, transaction design and scalability.