New research exposes fossil fuel financing in Southeast Asia, Japan named top foreign funder

By A Representative 

A new report launched ahead of the 46th ASEAN Summit reveals a staggering USD 45.167 billion in fossil fuel financing flowed into Southeast Asia from 2016 to 2024, with 65% of that funding coming from international banks and 71.9% directed towards coal projects. The Japan Bank for International Cooperation (JBIC) has been identified as the "dirtiest" foreign financier, responsible for 30% of total funding, primarily for coal and gas power projects.

Published by the Center for Energy, Ecology and Development (CEED), along with CELIOS, Energy Shift Southeast Asia, KRuHA, RimbaWatch, and WALHI, the report is the first comprehensive fossil fuel divestment scorecard in the region. It evaluates the climate policies and financial activities of 35 major banks, exposing a disconnect between banks’ public climate commitments and their continued investments in fossil fuels.

Japanese financial institutions, particularly JBIC, along with major banks like SMBC, Mizuho, and MUFG, have been instrumental in expanding fossil fuel infrastructure in Southeast Asia. Despite pledging to phase out coal, these banks have recently exited the Net-Zero Banking Alliance, raising questions about their sincerity in supporting the energy transition.

“Japanese banks, especially JBIC, are enabling the continued buildout of coal and gas infrastructure in Southeast Asia, putting climate goals and local communities at risk,” said Gerry Arances, Executive Director of CEED and Convenor of Energy Shift Southeast Asia. “It’s time for these institutions to match their promises with real actions.”

The report also criticizes domestic banks in Southeast Asia, particularly those from Indonesia, Vietnam, the Philippines, and Malaysia, for backing downstream coal development, with Malaysian and Thai banks singled out for their role in expanding gas power capacity. Malayan Banking and CIMB are named among the top domestic financiers of gas projects, including in Thailand.

Bhima Yudhistira, Executive Director of CELIOS, warned that such investments undermine the region’s renewable energy goals and exacerbate energy insecurity. “This increase has become a way for banks to continue to reap profits without realizing that coal and gas financing lock-in complicates the development of renewable energy,” he said.

With Malaysia hosting the ASEAN Summit, civil society organizations are urging both domestic and international banks to end fossil fuel financing. They argue that ASEAN’s aspirations for sustainability, food security, and inclusive growth under its 2025 Vision are incompatible with continued fossil fuel dependence.

“Financial institutions must halt new fossil fuel investments and redirect finance toward renewable energy at the scale demanded by the climate crisis,” Arances emphasized. “ASEAN ambitions must now be matched by absolute action, and the time to act is now.”