Global renewable energy investors eyeing Asia

Karachi: Global renewable energy investors are increasingly looking to Southeast and South Asia, lured by investment incentives rolled out by governments in the region amid a bleak outlook for clean energy investment in Europe and United States. China and India remain major destinations in Asia for renewable energy investors, but there are signs of emerging investment interest in smaller Asian countries, from Thailand to Pakistan and Malaysia to Vietnam.

In Pakistan, Turkish power utility Zorlu Energy Group is building a $144 million, 56.4 megawatt wind power project, with Asian Development Bank, World Bank and Pakistan’s Habib Bank Ltd helping to fund the venture.

Nordex SE announced that it has signed supply and service contracts for wind farms in Pakistan with a combined capacity of 250 megawatts. China Three Gorges Corp signed separate wind power deals with Pakistan last year. China Xinjiang Goldwind Science & Technology Co. Ltd is supplying the turbines.

A range of funds, including pension funds, foundations, and endowments, are also investing in the region. While investment opportunities in South and Southeast Asia may be new, accompanying problems are not unfamiliar. Investors complain of confusing regulatory frameworks and complicated tax and labour laws.

Weak infrastructure drives up costs for project developers, and inefficient power grids discourage deployment of renewable energy in areas requiring power supply.

Competition is also toughening up, with local companies willing to slug it out with international players. A combination of investment incentives and a dire outlook for clean energy in Europe is moving investors to increasingly look at South and Southeast Asia.

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