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Exploring the Role of Foreign Direct Investment in Optimal Fuel Mix for a Sustainable Energy Transition in ASEAN

In: GREEN FINANCE AND ENERGY TRANSITION IN ASEAN

Author

Listed:
  • Sakib Bin Amin
  • Fardin Anwod Ayshi
  • Farhad Taghizadeh-Hesary
  • Farhan Khan
  • Adiba Nawaz

Abstract

The purpose of this chapter is to critically discuss the role of foreign direct investment (FDI) in achieving an optimal fuel mix for a sustainable energy transition in the Association of Southeast Asian Nations (ASEAN). Globally, fossil fuel use has increased to meet the rising demand for energy brought on by economic growth. This has elevated concern for environmental sustainability as fossil fuels emit greenhouse gases, which are responsible for climate change. In this context, ASEAN Member States are making an effort to switch to renewable energy (RE) sources. The region requires huge investments to support this transition; however, present investment levels are below expectations, impeding the region’s progress toward its energy targets. FDI could play a significant role in reducing the investment gap and accelerating the RE development in ASEAN. The region does, however, confront a number of challenges that could impede the integration of FDI in RE projects. In order to reduce the challenges and make efficient use of FDI for ASEAN’s energy transition, this chapter suggests a few policy recommendations.

Suggested Citation

  • Sakib Bin Amin & Fardin Anwod Ayshi & Farhad Taghizadeh-Hesary & Farhan Khan & Adiba Nawaz, 2026. "Exploring the Role of Foreign Direct Investment in Optimal Fuel Mix for a Sustainable Energy Transition in ASEAN," World Scientific Book Chapters, in: Phoumin Han & Farhad Taghizadeh-Hesary & Fukunari Kimura & Rabindra Nepal (ed.), GREEN FINANCE AND ENERGY TRANSITION IN ASEAN, chapter 6, pages 171-202, World Scientific Publishing Co. Pte. Ltd..
    • Handle: RePEc:wsi:wschap:9789819815708_0006
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    JEL classification:

    • Q01 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General - - - Sustainable Development
    • Q50 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - General
    • Q40 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - General
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors

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