This issue looks at Southeast Asia’s energy outlook, with perspectives from the International Energy Agency (IEA), the International Atomic Energy Agency (IAEA), and the Asian Development Bank (ADB). With the region’s energy infrastructure already under strain – from much-needed economic growth to data centre expansion and fuel disruptions – could nuclear energy be the much-needed panacea?
And, read on for May’s round-up of climate-related deals.
“Wake-up call”
It would take several weeks before shipping traffic through the Strait of Hormuz returned to even half of what it was before the airstrikes against Iran started on February 28, which prompted Iran to close the passage as leverage for peace.
Regardless, the consequent disruptions to global oil supplies have been “a stress test of Southeast Asia’s current energy system and a catalyst to accelerate structural change,” in order to reduce exposure to future shocks, the IEA noted in its Southeast Asia Energy Outlook 2026 released this week.
The crisis has been a “major wake-up call for Southeast Asian governments for energy security and economic security,” IEA Executive Director Fatih Birol said in a briefing. And it is driving diversification and predictability in energy sources, Birol added.
Power demand in Southeast Asia is growing twice as fast as overall energy use, driven by economic and population growth. The region is set to account for 20% of the growth in the world’s energy demand over the next decade, ranking second only to India.
Electricity demand, in particular, is expected to grow fivefold by 2050, driven by demand for cooling. (Only about 30% of households in the region have air-conditioning today.)
At the same time, the share of coal in power generation dominates the electricity mix, even as renewable energy capacity has grown significantly over the past decade. Fossil fuel subsidies in the region are set to rise sharply from the $40 billion before the crisis.
Without structural change, the region’s import bill could rise sharply from over $80 billion in 2024 to around $245 billion by 2035, the IEA said. “By contrast, if the region were to reach its announced climate pledges, the fossil fuel import bill in 2035 would be around half this level.”
What’s needed is a more coordinated regional response to energy challenges, such as electricity transmission – through the ASEAN Power Grid for one – and to oil security and industrial strategies, the IEA said.
However, grid development in what is a geographically diverse region with a challenging climate will be technically demanding. And, the way such cross-border infrastructure is financed would have to change – away from the balance sheets of the utility companies involved, with greater participation from private and so-called catalytic capital.
Keiju Mitsuhashi, ADB’s director for energy, argued that “the investment case is compelling because demand is moving in only one direction: Up.”
ADB is pushing a $50-billion pan-Asia grid programme through 2035, which will build on and connect national and subregional networks, including the ASEAN Power Grid.
Speaking to GreenStreet, he cited outlier countries where the private sector can pour more capital into energy.
“In markets such as the Philippines and Singapore, where private participation in the power sector is already well established, there is especially strong potential for investors to help build cleaner, smarter, and more resilient grid systems.”
Nuclear power and data centres
The expanding data centre sector in the region – given that facilities are highly localised and energy-intensive – is putting a strain on the region’s infrastructure, as nearly all data centres are grid-connected, the IEA noted.
Johor, for one, had in 2024 rejected up to 30% of data centre applications owing to insufficient measures related to power and water usage efficiency.
To that end, large technology companies in the US have moved closer to nuclear power because of their rising electricity needs.
A similar dynamic could potentially emerge in Asia, particularly around data centres and AI. And there are potential opportunities in adjacent infrastructure, such as in cooling needs.
Indeed, there is growing interest in the region in nuclear power, with Indonesia, the Philippines, and Vietnam having already set clear nuclear development targets.
Malaysia, Myanmar, Singapore, and Thailand are considering nuclear power as an option. Key considerations for these countries are development timelines and choice of investment and financing partners. 
[Source: International Energy Agency]
At the recently held Asia Clean Energy Forum (ACEF) at the Asian Development Bank’s (ADB) headquarters in Manila, a dedicated session on nuclear energy stretched across two halls for an entire afternoon, drawing a packed audience as speakers repeatedly remarked on the turnout.
“This region has already answered decisively the question of whether nuclear has a role in its energy future,” said Rafael Mariano Grossi, IAEA Director General, at the event.
The policy momentum is now being matched by a stronger push from development finance institutions (DFIs). In November last year, ADB revised its energy investment policy to allow financing for nuclear power, lifting a decades-long restriction on investments in the sector. This followed the World Bank’s lifting of its ban on nuclear power investments.
The institutional shift could help build the financing and de-risking layer needed for nuclear power to advance in emerging markets. But for private capital, the next question is where the realistic opportunities are.
“Usually in a lot of nuclear financial models, the governments play an important role,” Henri Paillere, head of the Planning and Economic Studies Section at the IAEA, told GreenStreet.
Paillere said that is particularly true in Southeast Asia, where no big nuclear power plants are operating yet and where countries are still building regulatory, technical, and commercial frameworks.
Nevertheless, recent fundraising in more mature markets points to other segments within the nuclear sector in which capital could play.
Also in the US, nuclear startups have started attracting growth-stage and strategic capital. X-energy, backed by Amazon, raised about $1.1 billion in its US IPO in April 2026, after Amazon led a roughly $500-million financing round for the company in 2024 to support small modular reactor deployment.
Beyond reactor developers, Standard Nuclear, a US nuclear fuel startup, raised $140 million in January 2026 to boost production of fuel for advanced reactors. Deep Fission, which is developing underground small modular reactors, raised $80 million in new financing in February 2026. Nuclear fusion startup Helion raised $465 million in a Series G round earlier this month.
For IAEA’s Grossi, the message to the region is: Engage early. “The path to nuclear power is shorter than it used to be,” he said.
Still, including nuclear energy in the mix comes with its own set of challenges, as an earlier issue of GreenStreet explored.
Protests outside the ADB Headquarters in Manila, Philippines, during the Asia Clean Energy Forum. Photo by: Katrina Bianca Cuaresma
In the Philippines, the ACEF was met with protests outside the ADB headquarters. Among those present was Nuclear-Free Bataan, which has opposed efforts to revive the country’s long-defunct Bataan Nuclear Power Plant in the province north of Manila.
It was a reminder that nuclear power’s return to Asia’s energy agenda will not just be a question of demand, or even availability of private capital. Public acceptance, the availability of bankable companies, regulation, and local capacity will all have to be priced into the investment equation.
Southeast Asia’s climate deals in May
Stride, which connects solar providers with Vietnamese SMEs and household users, raised $15 million in a mix of equity and debt for its Series B round closed in May. The investment, with participation from new investors Lightrock and TRIREC, enabled a partial exit for Touchstone Partners and full divestment for one of Clime Capital’s funds.
Other deals in the space last month include funding rounds in Singapore waste management and recycling company SG Enviro and data centre solutions provider KoolLogix, as well as Indonesian energy management tool Amplicity.
