Tara Climate Foundation Report Shows Asia’s Energy Transition Becoming a Business of Markets, Capital and Industrial Strategy

SINGAPORE, August 25, 2026 : Asia’s clean energy transition is becoming increasingly tied to economic competitiveness, industrial policy, corporate procurement and sustainable finance, according to Tara Climate Foundation’s Annual Report 2025.

The report, “Sustaining Progress in Asia’s Energy Transition”, shows that despite a difficult global climate backdrop, Asia’s energy transition continued to advance in 2025. Tara’s focus geographies added 35 GW of renewable energy capacity, while solar capacity grew 16% and wind capacity grew 11%. Across the region, four national power development plans were updated, raising renewable ambitions in Japan, Malaysia, Pakistan and Indonesia.

For business readers, the report’s central message is that Asia’s clean energy transition is moving from ambition to execution. Markets are being redesigned, power procurement systems are becoming more bankable, sustainable finance frameworks are gaining traction, and industrial decarbonisation is becoming part of national competitiveness strategies.

Tara Climate Foundation works with partners across Asia to support a just energy transition, with focus areas spanning clean energy solutions, just transition, clean industrialisation, sustainable finance, climate goals and corporate engagement. Its approach combines grants, convening and regional knowledge to support local communities, donors, corporates and governments.

In 2025, Tara provided US$69.4 million in grants through 424 contracts, worked with close to 400 partners across 12 geographies, and welcomed 95 new partners into its ecosystem.

Renewables Move Into Economic Strategy

The report says clean energy across Asia entered a defining phase in 2025, with governments increasingly placing it at the heart of economic competitiveness and growth. The conversation shifted from whether renewable energy should lead the transition to how fast and how well that transition can be built.

This has major business implications.

In Indonesia, the updated Electricity Supply Business Plan for 2025 to 2034 targeted 24 GW of solar and wind by 2034, roughly five times the previous plan, alongside more than 10 GW of storage. The plan gave developers, utilities and financiers clearer signals on sequencing, grid requirements and investment priorities.

The government also committed to deploying 100 GW of solar by 2035, while Tara partners highlighted the country’s 333 GW of financially viable renewable energy potential. Analysis cited in the report found that community-led decentralised solar could contribute up to IDR112.4 trillion to regional GDP and create around 118,000 green jobs within the first five years of the programme.

For businesses and investors, Indonesia’s example shows how clean energy is being positioned as industrial and regional development infrastructure, not merely power-sector reform.

Market Design Becomes a Competitive Advantage

The Philippines stood out as a case of how competitive procurement can unlock renewable energy at scale.

Through its Green Energy Auction programme, the country held two auctions targeting 15.1 GW of additional renewable energy capacity and awarded 16.9 GW across solar, onshore wind and other energy sources. A further GEA-5 round targeted 3.3 GW of offshore wind, with awards expected in 2027.

The report says the auctions demonstrated that credible tariffs, financeable terms and clear rules are essential to making clean energy projects bankable. Tara partners, including the Global Wind Energy Council and the Institute for Climate and Sustainable Cities, contributed technical input on auction and tariff design.

This is an important lesson for Asia’s energy markets. Renewable energy targets attract attention, but market design determines whether developers and lenders can actually commit capital.

Indonesia also improved bankability by extending renewable power purchase agreements to 30 years, strengthening the investment case for new projects.

Sustainable Finance Gives Investors a Common Language

Sustainable finance is another major business theme in the report.

Version 4 of the ASEAN Taxonomy was published in 2025 and is now reflected in national taxonomies across Cambodia, Indonesia, Malaysia, the Philippines, Singapore and Thailand. The report says this establishes a common regional reference for sustainable finance development.

The ASEAN Taxonomy provides a common reference to align how member states classify green, transition and non-aligned activities, helping capital move across borders with greater clarity and confidence. The report says common definitions reduce fragmentation, lower greenwashing risk and make it easier for cross-border capital to identify credible green and transition investments.

Market-facing tools also progressed. The Philippines introduced Green Equity Guidelines for companies with more than 50% of revenue and investment in green activities, Singapore began mandatory climate disclosures for listed companies, and Malaysia’s Bank Negara Malaysia will require financial institutions to manage and disclose climate-related risks from 2026.

For corporates and investors, these developments point to a maturing regional capital market architecture for the transition.

Corporate Demand Strengthens Clean Power Markets

Corporate energy demand is also becoming a key driver. Across Asia, corporates accounted for half of all new RE100 signatories globally in 2025, with 43 new corporate actors making renewable energy commitments. Corporate procurement of renewables reached 2.1 GW across the region.

The report says Tara partners supported this momentum by helping align buyer demand with workable local procurement mechanisms, addressing technical barriers and improving the integrity of corporate clean energy claims.

In Malaysia, the 0.8 GW Corporate Green Power Programme reached financial close and sold out, reflecting strong corporate appetite for renewables. In Pakistan, the launch of the Competitive Trading Bilateral Contracts Market enabled direct power purchase agreements and corporate procurement.

This is relevant for multinational manufacturers, technology companies, industrial firms and exporters seeking clean power access in Asian markets. As supply chains decarbonise, clean electricity availability will increasingly shape investment decisions.

Clean Industrialisation Enters the Mainstream

The report also shows that industrial decarbonisation is moving into national development strategy. In Indonesia, the National Development Planning Agency launched the country’s first Nickel Industry Decarbonisation Roadmap, targeting an 81% emissions reduction by 2045 through energy efficiency, fuel switching and renewable power. The Ministry of Industry also launched an interim Industrial Decarbonisation Roadmap spanning nine energy-intensive sectors, including cement, steel, textiles, and food and beverages, to guide industry towards net zero by 2050.

With technical support from Tara partners, Indonesia also identified four Net-Zero Industrial Precinct pilot sites, where heavy industry can be clustered around shared renewable power, clean heat and low-carbon technologies.

For businesses, this is one of the strongest signals in the report. Industrial decarbonisation is no longer a niche sustainability exercise. It is becoming part of export competitiveness, supply chain resilience and investment strategy.

Community Acceptance Remains a Business Risk

The report also makes clear that clean energy projects must be people-centred to be durable. It notes that projects that move ahead without local trust risk delays, disputes and resistance, while projects grounded in genuine consultation are more likely to deliver shared benefits and stay on track.

This has direct relevance for developers, investors and corporates. Community engagement is not only a social obligation. It is increasingly a project execution issue.

In Malaysia, the Sabah RE2 Roadmap is working towards clean energy access through more than 200 community-based renewable energy mini-grids. In Pitas Laut, a 30 kWp solar PV mini-grid now provides reliable 24/7 electricity to all 20 households and community buildings, replacing diesel generators and supporting local enterprises.

Asia’s Transition Is Becoming Investable

Tara’s 2025 report shows that Asia’s energy transition is increasingly being built through the tools businesses understand: procurement, finance, regulation, infrastructure, industrial zones, power purchase agreements, corporate demand and investable policy signals.

The business opportunity is substantial, but so are the execution risks. Markets need credible rules, clean power buyers need access, industry needs transition roadmaps, and projects need community consent.

For Asia’s businesses, the direction is clear. Clean energy is becoming a competitiveness issue. Sustainable finance is becoming a market access issue. Industrial decarbonisation is becoming a supply-chain issue. And community-centred delivery is becoming a risk-management issue.

The next phase of Asia’s energy transition will be won not by ambition alone, but by those who can turn policy, finance and local trust into projects that are actually built.