A large share of South-east Asia’s renewable energy infrastructure faces significant exposure to climate-related hazards by 2030, with about US$165 billion in assets at risk across the region, according to a report released by Zurich Insurance on Wednesday (Jun 10).
The study found that roughly 75 per cent of renewable energy generation sites in Asean, including projects under construction or in planning stages, are likely to be severely affected by climate-related events within the decade. The assessment covered around 1,380 sites across solar, wind, hydropower and geothermal assets in all Asean countries except Timor-Leste.
The report estimates that targeted upfront investment of about US$13 billion, equivalent to around 2 per cent of total asset value, could significantly reduce exposure. It projects that such spending on climate resilience measures could help avoid up to US$82 billion in losses, representing a return of approximately 6.5 times the initial investment.
Zurich Insurance said the findings highlight a growing financial vulnerability in the region’s energy transition, particularly as extreme weather risks begin to intersect with long-term infrastructure development. It noted that 39 per cent of assessed assets face a 30 per cent probability of being hit by a major climate event by 2030, while another 36 per cent carry a 20 per cent risk level.
The report also warned that assets classified as being at critical risk could face difficulties securing insurance coverage, which in turn may tighten financing conditions and undermine project economics. It added that this could have direct implications for the region’s renewable energy expansion pipeline if resilience measures are not implemented early.
Among technologies assessed, solar power assets were identified as the most exposed, with about 80 per cent of capacity facing critical risk. Wind energy followed at 56 per cent exposure, reflecting widespread vulnerability across multiple renewable categories in the region.
At a country level, the report indicated that Vietnam and the Philippines face the highest risk of economic disruption linked to climate impacts on renewable infrastructure. This is attributed to their greater reliance on renewable energy within national power systems compared with regional peers.
Singapore, while less directly exposed to large-scale renewable generation risks, remains vulnerable due to its dependence on imported low-carbon electricity from neighbouring countries. The city-state plans to import around 6 gigawatts of low-carbon power by 2035, with much of this expected to come from Malaysia, Indonesia, Laos and Thailand.
The report noted that renewable assets in these supplying countries collectively include about US$56 billion in infrastructure considered at critical climate risk. This raises potential implications for cross-border energy reliability as regional power integration expands.
Mark Fletcher, head of Asia-Pacific at Zurich Resilience Solutions, said in comments that the findings should be viewed as a call for mandatory resilience standards across the region. He compared resilience requirements in energy infrastructure to safety regulations in buildings, noting that such standards often emerge through regulatory action or industry pressure.
He said investors, insurers and financiers may increasingly push asset owners to incorporate resilience measures into project design, particularly as climate risk becomes more closely tied to insurability and financing access.
The report highlighted that renewable infrastructure projects depend heavily on stable insurance frameworks to support construction, financing and operational continuity. It added that assets with stronger resilience profiles are generally easier to insure and finance, and more likely to meet expected performance outcomes.
To reduce exposure, the report recommended earlier risk screening, stress testing of highly exposed projects and design adjustments before construction begins. It estimated that such measures could reduce financial losses from climate events by 40 to 50 per cent.
Site selection was identified as one of the most effective early-stage interventions, with the report noting that some investments are still being directed toward locations highly exposed to extreme weather risks, including rainfall, flooding and landslides.
Fletcher said the industry needs to move away from relying on historical climate patterns and instead use forward-looking data to assess project viability, arguing that this approach could eliminate a significant portion of risk before equipment installation begins.
The report also pointed to structural challenges, including limited visibility on returns from resilience investments and misaligned incentives between developers and financiers. Developers often prioritise lower upfront capital expenditure to secure project bids, while the financial consequences of climate damage typically emerge later and may be borne by other stakeholders.
However, it noted that the investment environment is shifting, with financial institutions increasingly incorporating climate risk into broader credit and investment assessments. Insurance pricing is also expected to reflect resilience scoring, with engineering evaluations playing a growing role in determining capital access.
Fletcher said higher-quality, more resilient assets are likely to secure better insurance terms and stronger financing conditions, suggesting that resilience is becoming a prerequisite for capital rather than an optional enhancement.
