SOUTH-EAST Asian countries need to set clear policy and regulatory frameworks for investors to want to invest in renewable energy, according to the top official of International Renewable Energy Agency (IRENA).
The costs of renewable energy investments depend on regulatory and policy frameworks, said IRENA director-general Adnan Z Amin.
"In the beginning, you have to have a mechanism to kickstart (renewable energy investments) if you think there's going to be a positive outcome at the end," he told a gathering of energy professionals on Tuesday afternoon.
While costs of renewable energy technologies have already fallen tremendously, and many countries are also keen to adopt renewables for reasons such as energy security, financing has remained a hurdle, he said, citing Vietnam as an example.
To be able to attract financing and reduce overall costs, clear and reliable long-term policies which provide security to investors will make the biggest impact, he added.
The six major South-east Asian markets - Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam - attracted some US$27 billion in investments into the renewable power sector between 2006 and 2016, according to a study by IRENA, an inter-governmental organisation founded in 2009 to promote the adoption of renewable energy.
Asean as a whole has set for itself the target of having renewable energy contribute to 23 per cent of its energy mix by 2025. To reach this target, the region would need investments of US$27 billion each year, said Mr Amin.
While 92 per cent of financing for renewables projects globally come from the private sector including institutional investors and pension funds, this is not the case for the region where renewables investments - especially those in large hydropower, geothermal and bioenergy projects - have been underpinned by public and development finance.
"Basically what we're lacking right now is a sense of government resolve and a sense of adequate, reliable policy framework that allows the private sector to come in," he told reporters. "The market opportunity has to be created by policy and regulations."
Mr Amin was speaking at the launch of the theme of "Transforming Energy: Invest, Innovate and Integrate" for the Singapore International Energy Week (SIEW) this year. The event, to be held from Oct 29 to Nov 2, will address capital market barriers and the environment needed for infrastructure investment amid the energy transition.
"One of the reasons why I think it's important we have SIEW in Singapore is because Singapore is really the innovative finance hub of Asean, where knowledge and capacity exist to start creating investment mechanisms that can be used to (finance) the energy future," said Mr Amin.
SIEW 2018 will include a meeting of Asean energy ministers as part of Singapore's chairmanship of Asean. It will also feature the second Singapore-International Energy Agency (IEA) Forum, which will focus on the digitalisation of the energy sector.
In addition, the Asia Clean Energy Summit, a regular fixture of SIEW, will newly incorporate this year the International Off-Grid Renewable Energy Conference which showcases global off-grid renewable energy.