Asia is projected to account for nearly half of the world’s energy demand by 2040, according to a report by consultancy firm McKinsey. With rapid economic growth, Southeast Asian nations represent a growing share of that demand. Currently, fossil fuels make up 85 percent of the region’s energy production, but ASEAN (Association of Southeast Asian Nations) countries have committed to becoming climate-neutral by 2050.

Achieving that goal will require fresh investments of USD 190 billion, according to the International Energy Agency (IEA). Today, Southeast Asia accounts for just two percent of global renewable energy investments, despite representing six percent of the world’s GDP.

At the same time, the region is among the most vulnerable to climate change. Countries are facing increasingly severe and unpredictable weather events, including heatwaves, flooding, and droughts, along with rising sea levels. 

Strong potential for Swedish companies

The growing demand for sustainable energy solutions that combat climate change is opening up business opportunities for Swedish companies.

“There’s an urgent need for transition in Southeast Asia, and SEK wants to support more deals in the region. We know there’s a strong need for investment, which creates clear potential for Swedish exports,” says Jens Hedar, Head of Global Trade & Export Finance at SEK.

He points out that many Swedish companies and their suppliers are currently experiencing a “supercycle” driven by ongoing electrification:

“From storage and transmission of renewable energy to electrifying transport, mining, and industrial processes – Swedish companies offer the expertise and the products needed for the transition.”

Producing and storing energy from renewable sources like solar, wind, and geothermal requires new technologies to manage power from intermittent sources.

“It’s not enough to focus on production—smart grids are also essential, and this is where Sweden excels, offering everything from transformers and high-voltage cables to software,” says Jens Hedar.
Sweden has been a frontrunner in electrification since the heyday of Asea, and many Swedish firms were early movers in greening their own production.

“They understood early on that market forces would drive future demand and that there’s a solid business case in the energy transition,” says Jens Hedar. 

Green loans can offer better terms

Swedish companies that support Southeast Asia’s shift toward sustainable energy can apply for green loans from SEK.

“Offering green loans is a way for us to steer financing toward activities that help reduce carbon emissions. It can also give companies better pricing, as we’re able to raise funds at lower rates by issuing green bonds. It’s a win-win, especially for the climate,” says Jens Hedar.

Projects tied to the energy transition are more likely to secure financing when Sweden’s export credit system is involved. SEK can provide loans at either floating interest rates or at the favorable CIRR* rate, while guarantees from the Swedish Export Credit Agency (EKN) reduce the risk for exporters and financiers like SEK or commercial banks. 

So how can companies with limited experience in Southeast Asia tap into the region’s energy transition?

“Get into the value chains of large corporations—speak to your partners or our partner Business Sweden. They’re on the ground in Southeast Asia and have insight into major infrastructure projects and where to pitch your solutions.” 

*) CIRR (Commercial Interest Reference Rate) allows the buyer to receive financing at a fixed interest rate for the full credit term.