ESG Focus | May 29 2025
This story features FORTESCUE LIMITED. For more info SHARE ANALYSIS: FMG
The company is included in ASX20, ASX50, ASX100, ASX200, ASX300 and ALL-ORDS
FNArena’s dedicated ESG Focus news section zooms in on matters Environmental, Social & Governance (ESG) that are increasingly guiding investors preferences and decisions globally. For more news updates, past and future:
https://www.fnarena.com/index.php/financial-news/daily-financial-news/category/esg-focus/
Southeast Asian countries are investing in net-zero emissions and carbon neutrality targets and Australia wants a seat around the table.
By Reya Ramdev
Most governments across Southeast Asia (SEA) have set long-term net-zero emissions and carbon neutrality targets.
Recent fluctuations in fossil fuel prices have underscored the urgency for SEA countries to transition towards more stable and sustainable energy sources.
Despite the urgent need, clean energy investment in Southeast Asia remains strikingly low, accounting for just 2% of global clean energy spending in 2023.
Regardless, those SEA region’s energy transition initiatives are opening up opportunities for Australia’s businesses.
Key industries such as renewable energy technologies and sustainability are seeing keen interest from Australia’s well-capitalised businesses, and sophisticated and deep capital markets.
FNArena looks at some projects and partnership deals signed recently between Australia and the SEA region.
Australia-Singapore power deal
Cross-border electricity trade is a key area of opportunity as the SEA region seeks to increase its share of renewables in its grid. The mismatch between SEA’s resource gap and demand centres makes a strong case for Australia’s export of renewables, along with its clean energy expertise and technology.
The reportedly US$22bn (over $30bn) Australia-Australia Power Link (AAPowerLink) interconnector project based in the Northern Territory being developed by Sun Cable is one of the most ambitious projects underway.
The project will deploy between 17 gigawatts (GW) and 20GW of solar capacity and between 36.42 gigawatt hours (GWh) and 42 GWh of energy storage in Darwin. In October 2024 the project got a conditional approval from the energy regulatory authority in Singapore, giving the project the go-ahead to move to the development phase.
Sun Cable’s proposed project will roll out in three stages: a solar farm with battery storage south of Darwin, transmission lines to Darwin, and subsea HVDC cables to Singapore.
The project will supply 24/7 renewable energy to Darwin and Singapore, with 4 GW powering green industries in Darwin and 1.75 GW delivered to Singapore via a 4,300 km subsea cable via Indonesian waters.
In July 2024, the project obtained its principal environmental approval from the Northern Territory government and the NT Environment Protection Authority.
From Singapore’s perspective, this project fits well. It supports Singapore’s goal to decarbonise its power sector, which contributes 40% of national emissions.
The city-state’s target is to import around 6 gigawatts (GW) of low-carbon electricity by 2035, which is around one-third of Singapore’s energy supply then.
Singapore has already started importing 100 MW of clean power through another key multi-country project, the Lao PDR-Thailand-Malaysia-Singapore Power Integration Project (LTMS-PIP) launched in 2022, marking the first multilateral cross-border electricity trade agreement involving four SEA countries.
Extended Blended finance
As per the “Southeast Asia’s Green Economy 2025 Report” by Bain & Company and Temasek, the SEA region managed to attract US$8bn in private sector investments in 2024, 43% higher than the previous year.
Of this, nearly two-thirds went into clean power projects. While investments have been growing, the region requires US$50bn by 2030 to stay aligned with the Paris Agreement.
Australia is playing a growing role in helping bridge this gap. In December, it pledged $75m of investments in Singapore’s Financing Asia’s Transition Partnership (FAST-P) initiative to support sustainable infrastructure development and clean energy transition in Southeast Asia.
FAST-P is a blended finance initiative launched by the Monetary Authority of Singapore at COP28 in 2023 to mobilise up to US$5bn to de-risk and finance green and transition projects in Asia. Australia’s investment will be managed by Export Finance Australia (EFA) and deployed through the Green Investments Partnership (GIP).
Meanwhile, in Indonesia, the Australian Development Investments (ADI) committed US$8m as an anchor commitment to venture capital firm AC Ventures’ Climate and Sustainability Fund.
ADI provides early-stage and concessional investment to impact investment funds. The investment targets key areas including renewable energy, electric mobility, energy efficiency, waste management, the circular economy, and climate-smart agriculture.
Betting on emerging tech
SEA countries are also witnessing a wave of strategic partnerships in emerging green technologies like green hydrogen and utility-scale battery storage projects.
In Thailand, Export Finance Australia (EFA) extended a US$79m loan to support a major renewable energy initiative, part of a US$820m construction facility arranged by the Asian Development Bank (ADB).
The funding will enable Gulf Energy Development Public Company Limited (Gulf Energy) to develop 12 renewable energy projects with a total capacity of 649 MW, including eight solar projects and four integrating solar with battery energy storage systems (BESS).
Listed on the Stock Exchange of Thailand, Gulf Energy is a leading energy producer with investments spanning renewables, natural gas, infrastructure, and digital services.
The initiative is a key component of Thailand’s utility-scale renewable energy program and is expected to help double the nation’s wind and solar capacity.
It also represents one of Southeast Asia’s first large-scale applications of BESS technology. Currently, 60% of Thailand’s power generation comes from gas, 20% from coal, and 20% from renewables. Under its Power Development Plan 2024, the country aims to push renewable energy to over 50% of the national energy mix.
In Malaysia’s Sarawak region, ASX-listed Fortescue ((FMG)) is reportedly backing a green hydrogen project aimed at positioning Sarawak as a global hub for green hydrogen production and export.
Additionally, an Australian trade delegation from New South Wales has signed an agreement with Sarawak to advance large-scale renewable energy initiatives, share expertise in energy storage, and drive green technology innovation.
Recognising the risk in new and emerging technologies, Australia is also keen to conduct small-scale pilot programs to assess operational feasibility before scaling.
Recently, Australia and Singapore selected eight projects for funding as part of a $20m initiative to help reduce emissions in the maritime sector.
Projects are set for completion within two years and will focus on deploying low or zero-emission technologies for maritime and port operations, covering fuel supply chains for hydrogen, ammonia, and methanol, as well as vessel electrification and safety monitoring.
Net net, energy-hungry Southeast Asia presents a lucrative opportunity for Australian investors.
Favourable demographics, industrialisation, urbanisation and technological advances are driving growth in these economies.
As the region transitions towards a clean energy future and expands its cross-border electricity trade, partnerships with Australia’s investors and its businesses have much to offer.
FNArena’s dedicated ESG Focus news section zooms in on matters Environmental, Social & Governance (ESG) that are increasingly guiding investors preferences and decisions globally. For more news updates, past and future:
https://www.fnarena.com/index.php/financial-news/daily-financial-news/category/esg-focus/
Find out why FNArena subscribers like the service so much: “Your Feedback (Thank You)” – Warning this story contains unashamedly positive feedback on the service provided.
FNArena is proud about its track record and past achievements: Ten Years On
Click to view our Glossary of Financial Terms
CHARTS
For more info SHARE ANALYSIS: FMG - FORTESCUE LIMITED
