Accelerating Impact Investments for Climate and Nature in Asia 2025

One significant challenge in mobilizing capital for impact investments in Asia is the region’s vast and diverse geography, within which many areas are either too small or too remote to access key resources despite being highly vulnerable to climate risks. For archipelagic nations like the Philippines and Indonesia, which have 7,641 and 17,508 islands, respectively, the vast distances between islands and the scattered, often low-density populations present unique obstacles. This fragmentation raises questions about the scale of investment needed in regions where the impact may be limited to only a small portion of the population. This challenge is particularly evident in climate-related projects such as offshore wind farms, where optimal siting is essential to maximize clean energy production. While these projects can be effectively managed and monetized to deliver financial returns, the capital flow in such fragmented geographies is more complex and may require significant upfront investment to overcome logistical barriers. Despite these challenges, several initiatives are emerging to address the region’s needs. For example, at the 2022 G20 Leaders’ Summit in Bali, Indonesia’s President, along with the International Partners Group (IPG), led by South Africa and Japan, signed an agreement to mobilize $20 billion in public and private financing to support a just energy transition in Indonesia. These initiatives, discussed further in case study 7, represent important steps towards overcoming geographical and logistical barriers to climate investment in the region. The Indonesia Just Energy Transition Partnership (JETP) is a landmark agreement aimed at mobilizing $20 billion in public and private financing to support Indonesia’s transition to a just and sustainable energy future. Signed during the 2022 G20 (Group of 20) Leaders’ Summit in Bali, the agreement was established between the Government of Indonesia (GoI) and the International Partners Group (IPG), which is co-led by the United States and Japan. The JETP aims to limit power sector emissions to 290 million tonnes of CO2 equivalent (MTCO2e) and accelerate the deployment of renewable energy, with a target of at least 34% of total power generation coming from renewables by 2030. Additionally, the partnership sets a goal for the power sector to achieve net-zero emissions by 2050.In order to implement the JETP agreement, the GoI established the JETP Secretariat, which produced the Comprehensive Investment and Policy Plan (CIPP), launched in November 2023. The development of the CIPP was supported by four independent working groups: the Technical Working Group (led by the International Energy Agency), the Policy Working Group (led by the World Bank), the Financial Working Group (led by the Asian Development Bank), and the Just Transition Working Group (led by the United Nations Development Programme). In May 2024, a new working group, the Energy Efficiency and Electrification Working Group (led by the Southeast Asia Energy Transition Partnership) was launched. As part of the CIPP , the Just Transition Working Group consisting of World Bank, ADB, GIZ, International Labour Organization (ILO), and Indonesian Center for Environmental Law (ICEL) also contributed to the development of the Just Transition Framework. Fragmentation raises questions about the scale of investment needed in regions where the impact may be limited to only a small portion of the population. CASE STUDY 7 Indonesia Just Energy Transition Partnership2.3 Geographic challenges The structural development, economic and environmental vulnerabilities due to inherent characteristics like remoteness or smallness or just fragility means these areas and regions have an increased set of vulnerabilities in terms of climate change. So, the link between climate and nature action then becomes clearer and more urgent just because the impacts that they experience are probably more real. Sector expert, July 2024 Accelerating Impact Investments for Climate and Nature in Asia 14