IEA Ministerial: Ministers and business leaders emphasise need to boost clean energy investment, with spotlight on Asia-Pacific

The clean energy transition is accelerating at an unprecedented pace in many regions around the world, but global investment in the energy sector still needs to grow substantially over the next decade to get on track for net zero emissions by 2050.

Ministers and business leaders met this week in Paris at an event organised by the International Energy Agency and Australia to share their experiences and views on how to scale up investment in the clean energy technologies that will be instrumental in delivering international climate and energy goals. The IEA estimates that global investment in these technologies – such as wind and solar PV – needs to almost triple from USD 1.8 trillion today to 4.5 trillion by the early 2030s.

The high-level dialogue was hosted by Australian Minister for Climate and Energy Chris Bowen on the margins of the IEA’s 2024 Ministerial Meeting, which also marked the 50th Anniversary of the founding of the Agency. As part of the global investment discussion, the panel homed in on one region in particular, Asia-Pacific. Home to more than half of the world’s population with China, India and the fast-growing economies of Southeast Asia, it is a region that will play a pivotal role in shaping the global energy landscape and clean energy technology manufacturing. Speakers emphasised that higher incomes and growing populations – especially in Southeast Asia – are set to bring rapid increases in demand for energy services such as electrification and cooling. This will require the scaling up of investments in renewables, grid infrastructure, low-emissions fuels and energy efficiency to ensure that new demand is met responsibly and remains in line with the goal of limiting global temperature rise to 1.5 °C. To strengthen its engagement with countries in Southeast Asia and beyond, the IEA announced the establishment of its first Regional Cooperation Centre in Singapore.

Ministers and panellists highlighted the need for enhanced cooperation between the public and private sectors to mobilise capital for new projects, especially in emerging and developing economies, many of which suffer the worst impacts of climate change yet attract only a relatively small portion of global investments each year. This is in part due to the higher cost of capital for projects in these markets, a result of the real or perceived risks that the private sector associates with the majority of emerging and developing economies. Overall, clean energy investment in Southeast Asia was nearly USD 30 billion in 2022, a figure which is expected to double by the end of this decade.

To counter risk concerns and investment bottlenecks in the private sector, business leaders emphasised the importance of clear and stable regulatory frameworks underpinned by strong governance and institutions that will encourage private capital to flow into new and existing markets. The role of international development finance institutions to unlock investment through concessional finance was also highlighted as an important enabler for investors, particularly for newer technologies that have yet to scale up and are not yet cost competitive in many markets – such as battery storage, offshore wind, renewable-powered desalination or low-emissions hydrogen – or that are in riskier markets. According to IEA analysis, concessional finance for emerging and developing economies needs to triple by the early 2030s, while total investment requires a six fold increase in these markets, excluding China.

The IEA provides unrivalled global data, analysis and modelling on clean energy investments including in its flagship World Investment Report, which is released annually. The 2024 IEA Ministerial Meeting took place in Paris on 13 and 14 February. It is chaired by Ireland and France with Australia, Canada, the Netherlands and Poland serving as vice chairs. The IEA Ministerial takes place every two years to set the Agency’s mandate and review its achievements. It is a key opportunity for countries to assess the latest developments in global energy markets and how they can advance international cooperation on energy security and tackling climate change.