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Asia’s investment in energy

1 October, 2016

Asia Pacific will require an investment of about $11.7 trillion between 2010 and 2035 into energy sector.  Resource-rich members such as Australia, Azerbaijan and Mongolia have a relatively large ratio of investments per GDP, exceeding 5%. Besides meeting domestic energy demand, these members require investments for upstream extraction and midstream transportation for exports.

However, high income Asian countries such as Singapore have a relatively low ratio of investments per GDP at around 2% as their infrastructure is already developed.
 

The emerging countries undergoing industrialization such as China, India, Malaysia, Pakistan, the Philippines, Thailand and Vietnam show relatively high level of energy investments per GDP at above 2%. The economies of these countries require large investments relative to the size of their GDP, according to the Energy Outlook for Asia and the Pacific of Asian Development Bank.

Overall 85% of $11.7 trillion investment in energy sector is estimated to be made in developing countries and 14% in developed countries in Asia, according to the report.

China, followed by India and Japan will attract highest investments in energy as per the estimates of ADB’s Energy Outlook for Asia and the Pacific energy investment for Asia Pacific over the period to 2035. Australia, Indonesia, South Korea, Malaysia, Taiwan, Thailand and Vietnam are other Asian countries to attract the highest investment in energy sector. Lao, Hong Kong, Papua New Guinea and Singapore will attract least investment.

In renewable, China remains the largest destination of renewables-based power capacity investment.  China invested $3 billion in 2004, then multiplied this 13-fold by 2010 and another two and half times by 2015, to a record $102.9 billion. Today its share in global new investment in renewable energy is massive 35%.

 

For the first time, Chinese investment in wind overtook hydropower. China is also the world’s largest investor in solar thermal heating installations (USD 15 billion). Renewables spending also remained robust in Japan and India in 2015.

 

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