Australia has announced a $2 billion green energy fund for southeast Asia.

The government says the investment financing facility is aimed at propelling green energy and infrastructure development across Southeast Asia. 

Announced by Prime Minister Anthony Albanese during the CEO summit at the ASEAN meeting in Melbourne, the initiative seeks to harness the burgeoning demand for renewable energy within the region, which is expected to see a dramatic increase by 2050.

Based on the recommendations of Nicholas Moore, a prominent figure in business and special envoy to Southeast Asia, the facility is designed to offer loans, guarantees, equity, and insurance solutions. 

This strategic intervention aims to revitalise trade and investment ties between Australia and the ASEAN bloc, which have been described as “underweight” and “stagnant”. 

Moore suggests an estimated requirement for 454 gigawatts of additional generation capacity in Southeast Asia from 2021 to 2050, and says renewable energy will help meet this surging demand.

Prime Minister Albanese has emphasised the dual benefits of the initiative, saying; “Acting on climate change is an environmental necessity for our region – it is also a transformative economic opportunity”. 

The investment is anticipated not only to address climate challenges but also to unlock significant economic prospects, with the green project services market expected to surpass $10 billion annually by 2030.

The South-East Asia Investment Financing Facility, managed by Export Finance Australia, aligns with Mr Moore’s broader vision of fostering robust economic ties and sustainable development within the region. 

It addresses vital infrastructure needs including energy transition, rail, water, airports, and roads. 

This initiative is part of a suite of measures aimed at deepening Australia's economic engagement with Southeast Asia, as outlined in the Invested: Australia's Southeast Asia Economic Strategy to 2040.