The Asia and Pacific region is expected to play a crucial role in tackling climate change as it is responsible for about half of the current global carbon emissions. Many countries have already announced contributions toward implementing greenhouse gas mitigation under the Paris Climate Agreement.

Major economies like Japan, the People’s Republic of China, and the Republic of Korea have recently announced that they aim to achieve net zero emissions around the middle of this century, while several other countries in the region are considering similar targets.

Reducing emissions means transitioning to clean energy, a move that is also crucial for energy security and sustainable development. Fossil fuels meet 85% of energy needs in the region, with several countries heavily dependent on imports, rendering them economically vulnerable. One-tenth of the region’s population, meanwhile, still lacks access to electricity, with many more people depending on traditional biomass for cooking and heating; many urban areas endure serious air pollution.

Huge additional investments and the mobilization of private finance are required to fund the required rapid shift to clean energy. The global and regional landscape for energy financing has evolved in recent years, with emerging new sources of finance, such as climate finance and carbon markets, alongside new instruments, like green bonds and new innovative risk mitigation measures. These developments offer opportunities for energy entrepreneurs, project developers, investors, and financing institutions. However, investment in clean energy, such as solar, wind, bioenergy, hydropower, and geothermal, along with energy efficiency projects, requires an adequate understanding of the risks, uncertainties, and challenges involved in financing both on the supply and demand sides. These projects are very different from conventional energy projects. Risks and challenges can vary not only by type of project but also by country. It therefore becomes crucially important to select an appropriate combination of financing instruments, risk mitigation measures, funding sources, and business models for the effective financing of each clean energy project. In many cases, innovative financing approaches may be required to address project-specific barriers and risks.

While countries in Asia and the Pacific are at varying levels of maturity in terms of clean energy development and financing, several examples of successful clean energy financing can be found in developing countries of the region. Multilateral development institutions like the Asian Development Bank (ADB) have also been actively engaged in clean energy development, and lessons learned can be valuable in helping identify appropriate financing mechanisms and business models for new project developments.

No publication currently provides such information in the context of the developing countries in Asia and the Pacific.

This book aims to provide an up-to-date account of the financing approaches, policies, and business models available for the development of clean energy resources. These are complemented by appropriate examples of clean energy projects and programs from developing countries in the region. A variety of clean energy projects are covered, including distributed renewable energy systems, hydropower, and those focusing on demand-side energy efficiency. The book also discusses key barriers to financing clean energy development and innovative policies and measures adopted to overcome them in different country and project contexts.