Southeast asia: Southeast Asia's green economy has reached a valuation of US$290 billion this year, but a significant gap exceeding 35 percent has emerged between announced and deployed green capital expenditure (Capex) across the region's power and electric vehicles (EV) value chains.
According to BERNAMA News Agency, a recent report by Bain and Company and Standard Chartered reveals that the region must address this gap to fully realize its green economic potential.
The report, titled 'Southeast Asia's Green Economy Report 2026: The New Calculus', highlights a shift in capital deployment priorities. Investment decisions are increasingly influenced by energy security, economic growth, and delivery capabilities, alongside climate ambitions. The report outlines that capital is directed towards sectors where commercial demand, policy, and infrastructure readiness align, while it stalls where any of these elements are lacking. This new calculus poses a challenge for Southeast Asia, which has a window of 24 to 36 months to address this issue, with an additional US$80 billion in green Capex at stake.
Despite the announcement of approximately US$540 billion in green Capex across Southeast Asia's power and EV value chains by 2030, the report indicates that only around US$315 billion is on a credible path to deployment under current conditions. A critical factor in realizing the full potential of green capital deployment is the development of a robust power grid, which is currently lagging behind demand growth. Investment in transmission and distribution has decreased by three percent between 2015 and 2025, while energy demand has grown by about five percent annually.
The report also identifies new electricity demand from data centers, EVs, and green industrial clusters as potential catalysts for progress. Over the next three to four years, the region is projected to absorb over 100 terawatt-hour of new energy demand, necessitating more than US$200 billion in committed Capex. Reducing time-to-power for strategic demand will be key to capturing this new investment.
Currently, four Southeast Asian countries rank among the top 15 global EV markets by new car sales, yet 70 percent of four-wheel EV value flows outside the region. Furthermore, Southeast Asia accounts for less than two percent of global EV and battery production. Decisions regarding platform and supplier alignments between 2026 and 2028 will be crucial in determining the region's role in the EV value chain. Southeast Asia risks becoming a high-volume consumer and a low-margin assembler unless it closes the power, grid, and EV green Capex deployment gap, potentially unlocking an additional US$80 billion by 2030-a 25 percent increase on the baseline.
Mushahid Syed, Standard Chartered Malaysia's interim chief executive officer, head of coverage, and chief financial officer, emphasized the substantial opportunity for Southeast Asia's green economy. He stated that capturing this opportunity requires synchronizing policy, infrastructure, and finance rapidly. As an international bank with a strong presence across most ASEAN markets, Standard Chartered is committed to mobilizing US$300 billion in sustainable finance globally by 2030. The bank's priority is to support clients through this transition by mobilizing capital, structuring bankable solutions, and enabling cross-border opportunities that drive delivery.