Taking Asia’s renewable energy sector to the next level

Asia’s renewable energy industry is growing at an impressive pace. The region added 328 gigawatts (GW) of renewable energy capacity in 2023, according to the International Renewable Energy Agency (IRENA), expanding total generation by 20% – well ahead of the global rate of 14%.¹

China is leading the way, currently building twice as much wind and solar power capacity as the rest of the world combined.²

Despite this progress, Asia still has much to do in the transition to a low-carbon future. Renewable energy capacity in 2023 equalled 43.4% of Asia’s electricity needs, according to IRENA: the majority comes from fossil fuels.³

As demand for power increases, Asia will need to continue to accelerate its renewable energy investments to meet its climate commitments. According to PwC, Asia must decarbonise at a rate of 17.2% per year to meet the 1.5ºC target of the Paris Agreement. That is six times the pace of decarbonisation in the region in 2022.⁴

Across Asia, governments are redoubling their efforts to promote investments in the renewable energy sector to meet their climate commitments and power sustainable economic growth.

That creates opportunities for international businesses across the region. In India, for example, Spanish solar developer Zelestra is building a 435MW plant in Rajasthan.⁵ Philippines-based ACEN has also built a sizeable portfolio beyond its home market, with a growing pipeline of renewable projects in Australia.⁶

Offshore wind also holds significant growth potential, as highlighted by the rapid expansion of the sector in Taiwan. In one of the most recent examples, HSBC in 2023 led a group of commercial banks and export credit agencies for the 1,022MW Hai Long offshore wind project, one of the largest in Taiwan.⁷

Other countries are looking to follow suit. In South Korea, for example, the government’s target of installing 14.3GW of offshore wind capacity by 2030 could contribute KRW87 trillion (USD49 billion) to the economy, according to the Global Wind Energy Council, an industry body.⁸ Australia is also embracing offshore wind technology, with commercial feasibility studies now underway in designated areas. If all six zones are developed to their assessed potential, offshore wind could add as much as 75.4 GW of capacity to Australia’s electricity networks.⁹

Businesses looking to invest in renewables, however, need to choose their targets carefully. In particular, they need to consider whether energy policies and frameworks will support long-term contracts and predictable pricing – and whether new infrastructure can be easily connected to the grid.

Today’s grid infrastructure is ill equipped to handle intermittent power from solar and wind energy, and trillions of dollars of investment will be needed globally in new electricity cables, batteries and energy storage systems.¹⁰

All of this will require financing.

For businesses who are investing in this area, green financing and sustainable finance is available to support clean energy initiatives. HSBC has supported a number of clients on their sustainable investments in their pivot to renewable energy, including REE Corp, which turned to HSBC for a green loan to help finance an ambitious plan to build rooftop solar power facilities above Vietnamese factories.¹¹

We have designed a range of green financing products to support businesses at different stages of the renewables ecosystem. For companies involved in renewable energy projects, our sustainable finance solutions include green guarantees to support contractors like Century Iron & Steel Industrial on the delivery of underwater foundations for offshore wind farms in Taiwan.¹²

We can also help established renewables businesses, like India-based ReNew , access long-term green financing to develop new power plants and optimise their portfolio. HSBC has been a trusted partner on numerous financings for ReNew, including acting as structuring bank on the refinancing of a 300MW operational solar project in Rajasthan¹³ and helping the company raise USD400m in the bond markets in 2023.¹⁴

Renewable energy in Asia Pacific is a rapidly growing industry, and continued investment is underpinned by a strong policy commitment to decarbonisation.

With careful risk management and the right financing framework, businesses in Asia can capture this exciting opportunity, and renewables adoption should continue to grow in the markets. Moreover, with Asia leading the way in renewables manufacturing, there is ample opportunity for businesses to bring their expertise to new markets – in the region and beyond.

At HSBC, we are ready to support you with the financing solutions and capital you need to invest in the renewables sector. Get in touch with us today to find out more about how we can partner with your business.

Today we finance a number of industries that significantly contribute to greenhouse gas emissions. We have a strategy to help our customers to reduce their emissions and to reduce our own. For more information visit www.hsbc.com/sustainability.