Green data centers, boosted by energy efficiency regulations in Malaysia and Singapore, helped drive the largest investment dollars in Southeast Asia, according to a new report. Still, the region remains “woefully off-track,” with only 1.5% of the green financing needed for countries to meet 2030 emission targets having been dolled out.
Southeast Asia saw a significant uptick in green investments in 2023, with a boost from green data center projects, though funding remains insufficient, according to a report released Monday.
The analysis, conducted by Bain & Company, GenZero, Standard Chartered and Temasek, found that $6.3 billion of green investments flowed into the region, representing a 21% year-on-year increase.
While renewable energy remained the region’s primary green investment theme in 2023, green data center projects — aided by efficiency policies in countries like Malaysia and Singapore — drove the largest gains from the previous year, according to the report.
The International Energy Agency predicts the AI industry’s energy consumption will grow tenfold by 2026. This projection is based on a January report.
Moreover, the rise of eco-friendly data centers in Southeast Asia signifies a broader shift towards green technologies. Investors are increasingly recognizing the importance of environmentally sustainable initiatives, reflecting a growing awareness of climate change issues. The $6.3 billion green investment demonstrates confidence in the region’s potential to lead the way in sustainable development. To fully harness this momentum, policymakers and industry leaders need to collaborate on robust environmental policies. Innovation in renewable energy is also crucial.
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