Sustainable development in South East Asia (SEA)
Sustainable development in South East Asia (SEA) is hindered by dependence on conventional energy sources such as fossil fuel –oil, coal, and natural gas – all of which contribute to greenhouse gas emissions and climate change. Unsustainable energy sources are quickly being made obsolete by market-driven demands for climate-friendly and clean solutions. Thus, renewable energy (RE) usage– particularly solar, biomass, hydro, wind, and geothermal – is projected to increase exponentially, creating a significant opportunity for the private sector to meet growing demands.
Local small and medium-sized enterprises (SMEs) and social enterprises are uniquely positioned to pioneer low-carbon development. By supplying communities with sustainable and affordable clean energy solutions, SME’s and social enterprises can simultaneously address the key drivers of poverty while reducing carbon emissions. Unfortunately, RE projects and SME’s often face significant political, regulatory, or technological barriers during implementation. Particularly for those enterprises in the start-up, scale-up, or growth stages, access to finance is the primary obstacle they must overcome on the path to scaling and implementing solutions in SEA.
Desk research and key observations from the “Financing Renewable Energy in South East Asia” workshop
SMEs and the entrepreneurs that run them are often unsuccessful in identifying advantageous financing tools that can maximize their business models. The following report builds upon desk research as well as key observations from the workshop, “Financing Renewable Energy in South East Asia” workshop held in Phnom Penh in December 2017. The event was an opportunity to address the current challenges entrepreneurs face when trying to access finance in SEA (with a geographic focus on Cambodia and Myanmar). We hope that this work will educate entrepreneurs on the type of financing available to them as well as serve as a reference for donors on why certain financing schemes are relevant and more successful in the RE sector and in the SEA region.
- Renewable energy entrepreneur access to finance
In section one, Nexus summarizes research conducted with RE entrepreneurs who were asked to describe their experience financing their business and perceptions of the barriers to accessing finance in SEA. Entrepreneur testimonies are exemplified by a brief case study which examines finance accessed by four social enterprises in the clean energy and clean water sectors. Section two provides a mapping of the financial landscape by defining five innovative schemes designed to finance RE projects, SMEs, and social enterprises in the region. Nexus then provides an analysis of financial and non-financial tools and presents an overview of the benefits, challenges, and opportunities for improvement to facilitate the replicability of these solutions.
- Mapping the financial landscape
Key findings from the workshop including qualitative data, panel discussions, and breakout group discussions are also integrated and highlighted throughout this report. Additional data and research can be found in the Annexes.