The power sector in Southeast Asia (SEA) is central to the region’s economic development and decarbonization pathway. Accounting for 65 percent of the emissions reductions needed to meet national commitments, the sector presents both substantial transition risks and major investment opportunities. Yet, clean-energy investment in SEA remains insufficient to align with national and global climate goals.

This report provides a technical reference to support financial institutions (FIs) in conducting robust transition assessments of power sector companies in SEA. Moving beyond headline climate targets and capital allocation figures, transition assessments need to integrate operational and contextual realities through three core analytical pillars:

• Transition footprint mapping — Identifying a company’s current emissions-intensive activities and assets to locate areas of risk and opportunity
• Investment alignment — Evaluating whether the company’s investment pipeline aligns with its stated targets as well as sector and regional pathways
• Dependency mapping — Assessing how market dynamics, technology developments, and policy environments influence what is possible and on what timeline

By offering analytical methods, regional data, and regional benchmarks, this guide reduces the burden on FIs to perform this asset-level analysis from scratch. Building on this analysis, FIs can apply similar approaches to individual companies, empowering them to answer questions such as:

• What is this company’s current asset base? Does it have coal-powered assets that could conflict with national coal-phaseout objectives? From there, an FI can work with the company on early coal retirement strategies.
• What does the company’s project pipeline look like? Is the company on track to meet its climate targets and align with local policy objectives? Assessing alignment-to-policy pathways can inform risk management and determine if the company will be well positioned to take advantage of changing policy environments.
• What barriers to transitioning does the company face? Is it dependent on new grid infrastructure (e.g., transmission or storage), favorable policies, or other enabling factors? Identifying mitigating measures for these dependencies can reduce risk and present new investment opportunities.

This report aggregates asset-level data from Global Energy Monitor, an open-source data provider, to address these questions at the regional and national level, but this and other data sources can likewise be used for asset-level analysis of individual companies.

The SEA power sector is an example of the significant financial opportunity presented by the energy transition. The analyses in this report are intended to support FIs to take advantage of that opportunity through decision-useful transition assessments of SEA power companies.