‘Forest conservation a growing investible space’
KUALA LUMPUR: Forest conservation is a growing investible space towards emission reduction in Southeast Asia, particularly in Indonesia and Malaysia, according to a report by global consultancy Bain & Company and Singapore’s state investment firm, Temasek Holdings Ltd.
The segment is the largest carbon abatement lever in the region and will represent a US$20 billion investment opportunity by 2030, said the companies in a joint statement yesterday.
This is based on their report “Southeast Asia’s green economy 2022: Investing behind new realities”, which also saw contributions from Microsoft Corp.
Besides forest conservation, the report identifies four other priority levers that offer concrete investible opportunities that will drive 60 per cent of the region’s renewables (solar and wind), electric mobility, sustainable farming and built environment.
“Renewables (solar and wind) represent a US$30 billion opportunity by 2030, of which solar represents US$20 billion,” said the statement.
It noted that corporate investment in renewable energy solutions was accelerating in the region and accounted for at least US$6.6 billion in corporate green investment since 2020.
On sustainable farming, it said precision agriculture and farmer service platforms presented a large potential opportunity to drive yield improvements and reduce emissions.
“Malaysia, Thailand and Vietnam are most attractive due to infrastructure readiness and strong regulatory support.”
Meanwhile, e-mobility looks poised to take off in Indonesia, Thailand and Vietnam.
The statement said this was especially for two-wheeler electric vehicle manufacturing and sales.
On the built environment segment, it said the most attractive opportunity could be found in efficient cooling solutions, with a large potential for green building materials and products.
According to the statement, more than US$15 billion in cumulative sustainability investments have flowed into the region since 2020.
“Of all investor types, corporate investors have been the main engine driving 70 per cent (US$11 billion) of total investment.
“The strong uptick in capital flow signifies that regional investors remain optimistic about the investment potential in Southeast Asia green economy, although the investment scale of sustainable projects remains a key concern,” it said.